Monday, January 10, 2011

Bullish on AT&T (NYSE: T)

AT&T Inc. (T-N28.85-0.30-1.03%) declined from $40.70 (U.S.) to $20.90 in 2008 (A-B) rallied and then settled into a trading range between $23.50 and $28 (dashed lines). The recent rise to $29.43 (C) signalled the breakout and the start of a new major up-leg. The stock has traded between $27.50 and $29.50 for the past three months (dotted lines); a move above $30 would confirm the resumption of the up-trend. Only a decline below about $27 would be negative.

Point & Figure measurements provide initial targets of $39 and $43. The large area of accumulation (dashed lines) supports higher targets.

Ron Meisels is a contributor to the website. Monica Rizk is the senior Technical Analyst for Phases & Cycles Inc. They may hold shares in companies profiled. Please see the site for a glossary.

New York owes $200 billion in retiree health care costs - but there's no money

New York State, along with its cities and counties, have promised $200 billion worth of retirement health care benefits to their employees, and no one knows where that money is going to come from, according to a study conducted by the Empire Center for New York State Policy.

Unless the governments in question figure out a way to raise that money, they will soon be forced to decide between paying the promised health care bills and paying other expenses, such as the $264 billion in bonds that they also owe. With rising health care costs, a faltering economy, and steady public opposition to higher taxes and bailouts, the problem is only likely to worsen in the coming years.

"In fact, the cost of our 'health' is spiraling so far out of control that the Health Care Financing Administration predicted that our system would cost 16 trillion dollars by 2030," write T. Colin Campbell and Thomas M. Campbell II in their book The China Study. (more)

Six top silver stock picks for 2011: SLW, PAAS, SSRI, MFN, CDE

The consensus of market experts with regards to silver in 2011 goes something like this: silver prices are generally expected to stay hot in 2011 – though not without troughs – after dramatically outpacing gold prices in 2010.

According to Jefferies analyst Michael Dudas, silver prices should “achieve higher highs and greater lows in the next 12 to 18 months” driven by monetary, supply-demand and technical drivers. The prediction comes as BullionVault announces that its online gold and silver trading business grew nearly 29 per cent by volume to $1.33-billion (U.S.) in 2010, while customer numbers increased to 21,000 given the increased appetite for safe-haven and alternative investments.

In light of this, TheStreet sat down with numerous silver stock analysts and market watchers to arrive at six stocks the experts say they would buy during the expected silver price dips – in hopes of later benefiting from anticipated silver-price spikes in 2011.

Silver Wheaton (SLW-T33.19-0.92-2.70%) is considered to be one of the most stable silver stocks due to its unique and stable business model. (more)

Here are 5 Stocks Trending This Weekend

Although most businesses are closed over the weekend, money never sleeps.

Here are the 5 Stocks Trending This Weekend:

1) Progress Energy (NYSE:PGN) and Duke Energy (NYSE:DUK): North Carolina based power company Duke Energy is in talks to acquire key competitor Progress Energy for $13.1 billion. Although the companies are allegedly announcing the news Monday morning, investors should be very concerned that this deal will receive major scrutiny from the NC Utilities Commission.

2) Verizon (NYSE:VZ) and Apple (NASDAQ:AAPL): Investors are heavily focusing on what the WSJ confirmed will be Verizon’s announcement about selling Apple’s iPhone. The announcement this Tuesday will end years of rumors and add very solid revenue streams for both companies.

3) Mitsui & Co., Ltd. (NASDAQ:MITSY): According to Japanese press, Japanese firm Mitsui & Co. is teaming up with Mitsubishi Corp. to consider “joining a massive liquefied natural gas project on Russia’s Yamal Peninsula on the Arctic Ocean.” This would be Russia’s biggest liquid natural gas project.

My Favorite Trade for a Bullish Market: RIMM

It is not uncommon for stock market gurus to forecast the year ahead each January. Some are more lucky than good, which, in my opinion, is always better. That's not to say that a good forecast is not important. In fact, I am going to show you my time-cycle chart for the upcoming year, but with the following caveat: It is virtually certain that this forecast will change dramatically as the weeks unfold in 2011.

This is why it is so important to see these charts on a daily basis. Exogenous events can and will occur with more frequency than we would like to admit. One-off events are virtually impossible to predict and one-off (exogenous) events are certain to occur.

You may believe it is impossible to predict the future. I have no argument with that position, but if you do not have a plan that is capable of handling virtually any possible outcome, then your investment strategy could have far too much risk exposure.

I have found that the best way to plan for any contingency is to have a clear set of rules to use for your trades. Always know what your plan will be for the downside and for the upside. As I have often said in this venue: "Buying is easy... Selling is hard!" The successful result of selling the right stock at the right time is what separates winning trades from losing trades. If you haven't developed a solid set of investment/trading rules, I recommend my book "10: The Essential Rules for Beating the Market." (more)

HUMOR: Pelosi Passes Gavel to Boehner

Lock In Rates Now

Reader Walter has asked an important question on the recent actions of Goldman Sachs and Warren Buffett. Link here.
These investing behemoths are locking in long term debt at low, low rates and retiring variable rate loans.
Goldman's strategic 50 year move in the bond market at a hair over 6% is fascinating.

Who can possibly predict yields 50 years on the future?

In my view, yields on the 10 year rate will soon skyrocket.

The timing will depend on several factors, including the rollover of debt in Europe (Spain, Ireland and Italy are on my radar), and the cooperation in Congress on controlling Federal spending.

In my estimate, we will see the 10 year rate at close to 5% or higher by year end with steady increases into 2012.

I suspect that GS and WB have analysts that have also reached this conclusion which explains their actions. (more)

Amid Facebook frenzy, fears of Bubble 2.0

Remember Webvan? The online grocer, whose initial public offering in March 2000 was among the most hotly anticipated during the dot-com boom, is now viewed as one of the greatest disasters of the era.

Fast forward 11 years and the feeding frenzy around Facebook and its exponentially expanding valuations are conjuring fears of a Bubble 2.0.

Goldman Sachs bankers have offered their private wealth clients less than a week to decide whether they want to hand over $2-million (U.S.) apiece for a sliver of the Web darling du jour: Facebook at a $50-billion valuation.

For one Goldman client, who was expecting a 100-page financial document on Facebook to be hand-delivered on Thursday, hours before the deadline to invest in the company - the whole thing “felt a bit like 1999.”

Thanks to Goldman Sachs’ latest cash infusion of about $450-million with a commitment to raise another $1.5-billion, Facebook has become the lightning rod for debate over whether these new Internet hotshots possess the profit-generating muscles to justify Wall Street’s unforgiving expectations. (more)

S&P Stocks With the Highest Short Interest: ADS, BYD, CIEN, GMCR, RAX

Here’s 5 S&P mid-cap stocks with extraordinarily high short interest:

Alliance Data Systems Corp (NYSE:ADS): The Plano, TX-based company provides data-driven and transaction-based marketing solutions and customer loyalty solutions. The company has 50.39 million shares float. 36.8% of the shares float are short, or 18.458 million are shares short. (more)


“This quarter there were few surprises in the list of the top ten most risky sovereigns, with Greece at the top of the table, followed by Venezuela, Ireland and Portugal, and there were no changes to the top eight least risky, although The Netherlands dropped out of the top ten.

However, the top five worst performers for the quarter are from Western Europe, confirmation that 2010 was one of the most difficult years for the region since the introduction of the euro in 1999. The report found that UK CDS widened 13% in the quarter following the bail out of Ireland.”

The most risky

The least risky

US Economic Calendar for the Week

DateTime (ET)StatisticForActualBriefing ForecastMarket ExpectsPriorRevised From
Jan 1110:00 AMWholesale InventoriesNov-1.0%1.31.9%-
Jan 127:00 AMMBA Mortgage Purchase Index01/07-NANA+2.3%-
Jan 128:30 AMExport Prices ex-ag.Dec-NANA0.8%-
Jan 128:30 AMImport Prices ex-oilDec-NANA0.8%-
Jan 1210:30 AMCrude Inventories01/08-NANA-4.16M-
Jan 122:00 PMTreasury BudgetDec-NANA-$91.4B-
Jan 122:00 PMFed's Beige BookJan-----
Jan 138:30 AMInitial Claims01/08-415K420K409K-
Jan 138:30 AMContinuing Claims01/01-4000K4070K4103K-
Jan 138:30 AMPPIDec-0.8%0.7%0.8%-
Jan 138:30 AMCore PPIDec-0.1%0.2%0.3%-
Jan 138:30 AMTrade BalanceNov--$39.5B-$40.6B-$38.7B-
Jan 148:30 AMCPIDec-0.3%0.4%0.1%-
Jan 148:30 AMCore CPIDec-0.1%0.1%0.1%-
Jan 148:30 AMRetail SalesDec-1.0%0.7%0.8%-
Jan 148:30 AMRetail Sales ex-autoDec-0.8%0.6%1.2%-
Jan 149:15 AMIndustrial ProductionDec-0.4%0.4%0.4%-
Jan 149:15 AMCapacity UtilizationDec-75.3%75.5%75.2%-
Jan 149:55 AMMich SentimentJan-75.575.074.5-
Jan 1410:00 AMBusiness InventoriesNov-0.9%0.7%0.7%-