S&P 500 Snapshot: Flat Finish, Waiting on Tomorrow's Unemployment Report

Before the market opened, the weekly unemployment claims came in a bit better than expectations, but the S&P 500 oscillated around the flatline and closed with a fractional gain of 0.11%. The general view is that investors are awaiting Friday's monthly unemployment report for a directional catalyst. The index is up 5.40% year-to-date but 2.79% below its interim high at the end of April 2011.

From an intermediate perspective, the S&P 500 is 95.9% above the March 2009 closing low and 15.3% below the nominal all-time high of October 2007.

Below are two charts of the index, with and without the 50 and 200-day moving averages.

Click for a larger image

Click for a larger image

For a better sense of how these declines figure into a larger historical context, here's a long-term view of secular bull and bear markets in the S&P Composite since 1871.

For a bit of international flavor, here's a chart series that includes an overlay of the S&P 500, the Dow Crash of 1929 and Great Depression, and the so-called L-shaped "recovery" of the Nikkei 225. I update these weekly.

These charts are not intended as a forecast but rather as a way to study the current market in relation to historic market cycles.

Rob Arnott: The Coming Inflation is Going to Destroy Fortunes

from King World News:

Today 5 time Graham & Dodd Award Winner, Rob Arnott, told King World News the policies of central planners are literally destroying the poor and the middle class and he described the situation as “horrifying” and “tragic.” Arnott oversees more than $80 billion as Founder & Chairman of Research Affiliates. Here is what Arnott had to say about the situation: “We have a concerted effort in Japan, in the US and in the eurozone to micromanage the economy and to replace the powerful discipline of the invisible hand of the private market system with central command and control and that’s very, very dangerous.”

Rob Arnott continues: Read More @ KingWorldNews.com

Bullish Chart And High Dividend Yield : APL, ARLP, DPM, TOO

With the U.S. stock market breaking out into multi-month highs, it is common to look for charts that show bullish momentum. At the same time, I would like to find stocks that pay above-average dividend yields to protect against a flat or down market.

It was surprising to find out that a high number of big dividend-paying stocks also have bullish charts to back them up. Of the list that was compiled, there were four stocks that rose to the top.

Oil & Gas
Atlas Pipeline Partners LP (NYSE:APL) provides gathering, processing and treating services for the natural gas industry, mainly in the Anadarko and Permian Basins. The stock pays a 5.9% dividend and trades with a PEG ratio of 0.33. The combination of yield and attractive valuation make APL fundamentally sound for potential investment.

The chart shows a stock that rallied to a new three-year high earlier this month, before pulling back to support at the $36 area. As long as APL can hold above $36, it looks like the stock should continue the current trend higher.

DCP Midstream Partners LP (NYSE:DPM) provides nearly identical services as APL, with heavy concentration in the middle of the U.S. The company operates in three segments: natural gas services, wholesale propane logistics and logistics. The stock has a dividend yield of 5.4% and a PEG ratio of 5.5. The yield is great, but the PEG leaves a lot to be desired. Technically, the stock is trading just below an all-time high set in 2007, and if it can break out to new highs, it would be the next buy signal to flash.

Coal
Alliance Resource Partners LP (Nasdaq:ARLP) is involved in the production and marketing of coal through its operation of nine underground mines located in the U.S. The company also leases land and offers related services to the coal mining industry. The 4.9% dividend yield and PEG of 0.9 make the stock attractive for investors looking to gain exposure to the coal sector.

What really differentiates ARLP from its competitors is the technical analysis. Overall, coal stocks have struggled, but ARLP is not far from an all-time high. Being a leader in a sector that is poised to turn around at some point is a good place to be for ARLP.

Shipping
Teekay Offshore Partners LP (NYSE:TOO) supplies the offshore oil industry with transportation and storage services. The company provides its customers with theses services with their over 50 tankers and vessels. A dividend yield of 6.9% has attracted investors to the stock and the recent breakout to a new multi-month high should add to that attraction. The PEG ratio could be considered high at 2.29, however the other factors make TOO a stock that must be watched.

The Bottom Line
All four stocks mentioned above are commodity-related and all are limited partnerships. It is not a coincidence that they all come from the same general industry. With the price of oil rising and the fact that LP's typically pay big dividends, it makes sense that the scan generated large stocks. The only warning I will give is that you do not want to overexpose yourself to the commodity sector in the event the global market slows.

Jim Rogers – More Predictions for 2012

3 Coffee Stocks to Buy : GMCR, PEET, JVA, CBOU

Shares of Green Mountain Coffee (GMCR) blew out estimates today - here are 3 Coffee Stocks that are not too late to get into.

It's official, Coffee is unstoppable. Even during a recession, the public has shown that they will not give up their Java. Now let's get to the stocks: Peet's Coffee (PEET), Coffee Holding (JVA) and Caribou Coffee (CBOU).

Peet's Coffee (PEET) has had a 7.20% increase in sales over the last twelve months and earnings per share of $1.3. EPS has increased at an annual compound growth rate of 18.64% over the last five years, making the growth rate of the stock very attractive. And who knows, maybe a company looking to expand, like Dunkin Brands, could buyout the company. For a high priced stock, Peet's market cap is pretty low at just under $1b.

Looking at the chart, Peet's has hit multiple tops right around the $65.00 range. In spite of that, the channel that it's trading in is getting narrower, so this should act as compression which we think will eventually break out to the upside. If it does break out, there's a lot of open air up there for it to run, think $75 - $80.

Coffee Holding (JVA) reported a horrible quarter last week, missing consensus estimates of $.23 with a surprise loss of $-.30, due to some mishaps in their coffee hedging program. A sure way to tell if a stock has hit bottom is if bad news comes out and investors barely bat an eye. There simply aren't any sellers of the stock left. I think JVA hit the bottom last week and it will go up from here - after that much of a surprise in earnings, you'd think shares would plummet to around $5, but the fact is shares went from $9.35 down to $8.69 after earnings. This week it's already back to $9.10.

The chart shows a nice base forming for the past 3 months. I'm looking for a breakout to $12 - $15 range, but keep a tight leash on this one due to volatility.

And lastly, Caribou Coffee (CBOU) has already had a major breakout in January, moving from $14 to $17. But just because it's trading near a 52 week high doesn't mean you should overlook it. Caribou Coffee is the second largest company-owned coffee house franchise in the U.S. behind Starbucks.

4 ETFs For A Market Pullback : BIV, DNO, DRR, SH

The S&P 500 has rallied approximately 5% in the first four weeks of the New Year and is sitting near a multi-month high. The index is up roughly 20% from the recent low set on Oct. 1, 2011. This is a sign that stocks are back into an official bull market. Everything seems to be pointing to a trend that will probably continue for a few months.

However, the major indices are overbought and there is a high probability of a pullback heading into February. It would not be unhealthy if the S&P 500 were to incur a 5% sell-off that would bring the index back to its breakout area and at the same time, keep the uptrend intact.

Whether you are a bull and believe in higher prices in a few months or a bear that believes the current rally is over and a new downtrend is around the corner, there are a few ETFs that should benefit from weakness in the overall market.

Short ETFs
An ETF that will simply give investors the inverse of the S&P 500 on a daily basis is not a bad way to protect a portfolio or profit from selling. The ProShares Short S&P 500 (ARCA:SH) does just that for an expense ratio of 0.9% annually. Keep in mind that due to compounding the returns for SH over time, they may not match the exact return of the inverse of the S&P 500 over the same time frame. Most inverse or leveraged ETFs are better used for short-term trades or hedging.

The Market Vectors Double Short Euro (ARCA:DRR) is a two-times leveraged inverse ETN that will rise 2% in value on a day that the euro falls by 1% and vice versa. Over the last few months, whenever the stock market has fallen, it has been related to issues in Europe that also bring down the currency. For example, when the S&P 500 fell close to 20% from early May through late September last year, DRR was up almost 20%. The ETN creates a hedge against trouble in Europe.

The United States Short Oil Fund (ARCA:DNO) seeks to offer its investors in percentage terms the inverse return on the spot price of light sweet crude. If a pullback occurs, it will likely be brought on by news of a global economic slowdown and therefore it will lower the price of oil and push DNO higher. During the near 20% sell-off in the S&P 500 last year (as mentioned above), DNO gained approximately 40% and was a great hedge.

Fixed Income
The Vanguard Intermediate Term Bond (ARCA:BIV) is a mix of government-issued and investment grade corporate bonds. The average maturity is 7.3 years and it has a 30-day SEC yield of roughly 2.29%. The yield is not overly attractive, but as money flows out of equities the ETF should attract money and at the very least hold steady and preserve capital during a sell-off. During the near 20% market sell-off last year, the ETF was up more than 5%, not including the monthly dividends.

The Bottom Line
As I mentioned above, if you are a bull on this current market, the pullback will likely be short and sweet if you are right. On the flipside, if the bears are right, the selling will likely last a few months and have a much bigger downside. The bears could buy the ETFs mentioned, then hold and wait for the pullback. The bulls that consider the ETFs must be nimble and time the market, which can be very difficult for the average investor.

Dreman: Best Values in 30 Years

Contrarian guru David Dreman says he’s finding stocks as cheap as they’ve been at any time since 1982. Dreman tells Forbes’Steve Forbes that he’s bullish because valuations are low and companies have good cash flows and financial positions that are as strong as they’ve been in years. (A tip of the cap to Zack Miller of Tradestreaming.com for drawing our attention to the interview.) He says investors have been running from stocks because they fear volatility and they fear the economy will be in a depression-like malaise forever. He doesn’t see that happening, and thinks all the fear has created numerous opportunities.

Dreman also talks a bit about portfolio management, saying he keeps a diversified portfolio of 50 to 60 stocks, with all the stocks weighted similarly. He adds that he buys stocks below the market valuation multiple, and always sells when it reaches the market average multiple, though he may sell sooner on “very bad news”. One change he’s made since the financial crisis: He’ll sell stocks of companies that post losses, even a short-term loss, and won’t buy them again until they are turning a profit.

McAlvany Weekly Commentary

An Interview with Bert Dohmen

Posted on 01 February 2012.

About this Week’s Show:
- China the Dubai of 2012
- Decoupling Denied
- Far Eastern Buying of Gold Trumps the West

About the Guest: Dohmen Capital Research Institute Inc. was founded in 1977 by Bert Dohmen as an economic and investment research firm. Over the past two decades, the firm’s services have achieved the highest acclaim. They are the most highly respected and sought-after advisory services for investors world-wide. The firm currently offers 10 services. These include a long-term advisory service for the mutual fund investor, which helps investors avoid the need for a money manager or financial planner.

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Peter Grandich: “People Threw In The Towel On Mining Shares, and That’s When They Finally Move Higher”

from Tekoa Da Silva’s Bull Market Thinking:

I had the chance once again to speak with Peter Grandich yesterday, publisher of The Grandich Letter, and “Confessions of a Wall Street Whiz Kid.”

It was an exciting interview, as Peter understands the economy, gold, and the junior mining sector in a way that few other commentators do. The items we discussed were the DJIA continuing its move higher, gold breaking out technically, and the junior mining sector as being an incredibly cheap place to invest.

In regards the U.S. stock market, Peter said, “I work under the premise that there is a ‘don’t worry be happy’ crowd on wall street, and that the market is always tilted to the biased long side…the bulk of the financial institutions deal in stocks and bonds, and most times they always have a biased to be long…I like to joke that if you tossed one of them off the empire state building, all the way down they would say the same thing–’so far so good’...Most of the people that work in the financial service industry have a natural tendancy bias to be bullish, or to look at the cup half full rather than half empty.”

Read More (and Listen to the Interview) @ BullMarketThinking.com

Jim Sinclair Interview presented by Metallwoche.de

Today on Metallwoche.de we present to you an interview with Jim Sinclair in two parts. In the first part Lars Schall spoke to Jim about some interesting remarks Chris Powell from GATA had to say about gold in front of the Fed building in Washington D.C. Furthermore Lars asked for Jims opinion concerning the gold storage of different countries, including Germany, with the New York Fed and the Treasury department and if these countries shall demand their gold back home.

In the second part of this interview for Metallwoche.de, Michael asked for Jim Sinclairs view on the gold market after the Fed-statement last week and the possible implications near and longer term.

click here for audio

Chart of the Day - Oceaneering International (OII)

The "Chart of the Day" is Oceaneering International (OII), which showed up on Wednesday's Barchart "All Time High" list. Oceaneering on Wednesday posted a new all-time high of $50.71 and closed up 3.70%. TrendSpotter has been Long since Jan 19 at $48.38. In recent news on the stock, Oceaneering on Dec 20 completed its acquisition of AGR Field Operations for about $230 million in cash. Goldman Sachs on Dec 8 initiated coverage on OII with a Neutral and a target of $57. Jefferies on Nov 29 initiated coverage on OII with a Hold and a target of $48. Oceaneering International, with a market cap of $5.2 billion, is one of the world's largest underwater services contractors.