Gerald Celente’s 2014 Predictions War, Financial Crisis in Q2 & Gold Prices Going Up

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This Strategy Has Worked Since 1801 and Is a Good Bet for 2014

Individual investors often point to the long-term success of Warren Buffett as proof that value investing works. They are correct, and Buffett is just one example of the many long-term investors who have found success with value investing. While value investing works, many investors fail to succeed with this strategy.

I believe the reason value investing is so difficult to implement is because it is challenging to define exactly what "value" means. Some investors use the price-to-earnings (P/E) ratio and buy when the P/E ratio is low. Others search for stocks with low price-to-sales (P/S) ratio in their hunt for value. In addition to these two tools, there are dozens of other ways to measure value. In the right hands, and with enough time, any disciplined approach to value investing should work in the long term.  (more)

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The Top 2 Tech Sectors For 2014 And Beyond: iShares NASDAQ Biotechnology Index (NASDAQ: IBB), TriQuint Semiconductor Inc. (NASDAQ: TQNT)

There's been a lot of talk about a tech bubble.
Forget about it.
The fact is, there are always parts of every sector that are overvalued and pockets that are undervalued.
The easy story for the talking heads in the financial media is to generalize, inflame and move on. The analysis is usually about as deep as your fingernail.
What I'm here to tell you, is that after huge amounts of research and days of elite conferences and hours of interviews, I know there are two tech sectors that have many glorious days ahead of them, regardless of the silly chatter that you hear from the pundits.
Both of these sectors are just hitting their stride in the "New Economy." This isn't the "old" stuff that you've seen for the past decade or so. These sectors have upgraded their technologies and are taking them to places that no one could anticipate a decade ago. (more)

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Computer Sciences Corporation (NYSE: CSC)

Computer Sciences Corporation provides information technology (IT) and professional services and solutions in North America, Europe, Asia, and Australia. The company’s Managed Services Sector segment offers IT outsourcing services that involve customer’s technology infrastructure, including systems analysis, applications development, network operations, end-user computing, and data center management. Its North American Public Sector segment provides systems integration and outsourcing, and complex project management and technical services, such as enterprise modernization, telecommunications and networking, managed services, base and range operations, and training and simulation services for government agencies, as well as the department of homeland security and NASA. The company’s Business Solutions and Services segment offers consulting and professional services that include advising clients on the strategic acquisition and utilization of IT and on business strategy, security, modelling, simulation, engineering, operations, change management, and business process re-engineering.
To review Sciences’ stock, please take a look at the 1-year chart of CSC (Computer Sciences Corp.) below with my added notations:

After a nice push higher in July, CSC had been bouncing back and forth since August. As the stock found support in the general $50 area, it had also created a strong level of resistance at $54 (blue), which constitutes a 52-week high resistance. A break through that level most likely means higher prices for the stock. As you can see from the chart, CSC finally broke higher last week.

The Tale of the Tape: CSC broke out to a new 52-week high. A long trade could be made at $54 with a stop placed below that level. A break below $54 would negate the forecast for a continued move higher.
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Little-Known Indicator Signals 'Buy' While Investors Are Running Scared

In the 1930s, a financial editor at Forbes magazine pieced together chart patterns. Richard Schabacker, who is considered to be the "father of technical analysis," went beyond identifying how patterns looked on charts. He also looked broadly at investor psychology and noticed that it could explain why some chart patterns form.
Psychology can be a valuable tool for traders to understand. We have made some notes on the chart below that describe the feelings of some investors at various times during the past few years.

Investor psychology does help explain resistance on a chart, for example. After a bear market, there will be some investors who will be thankful to recover their losses. They might sell when the market gets back to its old highs. This appears as resistance on the charts. After resistance is broken and prices start moving higher, we often see a "market melt up" as investors rush in since they are worried about missing out on the upside. (more)
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Time to buy out of favor ETF’s for 2014?‏: GDXJ, EWZ, TUR

The best time to buy cheap is when you are afraid to bring up your ideas around the water cooler at work for fear of the peer laughter. Our work centers on looking for oversold conditions and crowd behavioral anomalies that can give us better low risk entries with good upside potential. A combination of fundamentals and technical, combined with Elliott Wave Theory patterns can lead to nice profits with low risk.
For just a few quick ideas that would make sense in this area, we point out 3 ETF's that you could look at entering now as they are way out of favor and very oversold.

Gold Stocks: GDXJ
The Junior Miners index is high risk, high reward. However, if you time the entry right at the opportune moment the upside is very high with low downside risk. With GOLD out of favor, we have been pounding the table the last 10 days or so that there are only 4-5 weeks left to buy quality miner names. Instead of picking through them one at a time, you can pick up the high beta play GDJX ETF.

How about Brazil?
Everyone hates Brazil stocks now, but they have some of the most valuable natural resources in the world, and Brazil almost always bounces back strong off bear cycle lows. Here is a way to play the commodity rebound we see in 2014: EWZ ETF

 It's not too late to eat some Turkey: 

The country TURKEY also often is a very volatile play to invest, but going in during very oversold conditions often plays out to the upside for gains later on. ETF TUR is beat up, it's time to buy.

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Is Twitter :TWTR A Sell?

Back in early December, I was bullish on Twitter (TWTR) for three reasons when it was $50. It has since rallied more than 40%. But nothing lasts forever and in early trading today the stock was down 5% thanks to word that analysts slapped it with an underperform rating.
So why did it rocket so high so fast and why is it now coming back to Earth?

First, the fundamental story is still an exciting one and Twitter will have an opportunity to create all kinds of value few yet foresee. For instance, with a constantly improving ability to crunch its massive real time data set, Twitter may have an opportunity to monetize search, which would be huge. I can imagine Twitter placing relevant geolocated ads next to its users’ searches for auctioned keywords similar to Google’s approach to traditional search.  (more)

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Micron Technology (NASDAQ: MU) Should be a Big Winner in 2014

If you've been in the market this year, you are likely pretty happy with your results. Indeed, the bias this year has been all about the bulls, and until we see the price action reflect otherwise, the big winners are likely to keep on giving in 2014.
For traders like me who love to ride strong momentum stocks during bull markets, I think the best place to put new capital to work is in those big winners trading at or near new highs.
One tech stock that fits this description perfectly is Micron Technology (NASDAQ: MU).
The company is one of the largest makers of computing memory chips in the world, but you don't have to have a very long memory to know that the stock has been a trader's dream of late. Year to date, MU has delivered a gain of nearly 245%, an incredible run for a large-cap tech stock that's been around for some time.
And though shares are more than 50% above their long-term, 200-day moving average, there have been scant episodes this year where traders got scared and sold the stock off because it was perceived as being overbought.

From a fundamental perspective, the shares do not seem overvalued. With a current price-to-earnings (P/E) ratio of just under 20, the stock is neither super cheap nor prohibitively expensive.  (more)
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Art Cashin Warns About West’s Disappearing Gold Hoard

from King World News
Today 50-year veteran Art Cashin warned King World News about the West’s disappearing gold hoard. Cashin, who is Director of Floor Operations at UBS ($650 billion under management), also discussed what surprises him the most regarding the West’s loss of gold.
Eric King: “Art, I wanted to discuss a Bloomberg story where they talked about gold literally disappearing from the vaults in London. An individual interviewed in that piece said the vaults were full two years ago, and now they are virtually empty. This transfer of gold from the West to the East, does it worry you, Art?”
Cashin: “It is concerning … China has stepped up to be a pretty big buyer of gold. So we will keep an eye on where these transfers go. These people (in the East) are concerned about their own currencies and the ability of their own governments to control things. They look for the safety of gold, something hard that has stood them well (in terms of wealth preservation) over the decades.”
Continue Reading at KingWorldNews.com…

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World Braces for Retirement Crisis

A global retirement crisis is bearing down on workers of all ages.

Spawned years before the Great Recession and the 2008 financial meltdown, the crisis was significantly worsened by those twin traumas. It will play out for decades, and its consequences will be far-reaching.

Many people will be forced to work well past the traditional retirement age of 65. Living standards will fall and poverty rates will rise for the elderly in wealthy countries that built safety nets for seniors after World War II. In developing countries, people's rising expectations will be frustrated if governments can't afford retirement systems to replace the tradition of children caring for aging parents.

The problems are emerging as the generation born after World War II moves into retirement.

"The first wave of under-prepared workers is going to try to go into retirement and will find they can't afford to do so," says Norman Dreger, a retirement specialist with the consulting firm Mercer in Frankfurt, Germany. (more)

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Chart of the Day - Autodesk (ADSK)

The Chart of the Day is Autodesk (ADSK).  I found the stock by sorting the New High List for frequency in the last month, then skipped over the stocks that did not have positive gains in the last week and month.  I always use the Flipchart feature to review for the best charts.  Since the Trend Spotter signaled another buy on 11/1 the stock gained 18.24%.

The company designs software and digital content for architectural design and land development, manufacturing, utilities, telecommunications, and media and entertainment sectors. Autodesk provides design software, Internet portal services, wireless development platforms, and point-of-location applications that empower customers in numerous countries to drive business and remain competitive. 

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US Weekly Economic Calendar

time (et)	report	period	Actual	CONSENSUS forecast	previous
MONDAY, DEC. 30
10 am	Pending home sales	Nov.		--	-0.6%
TUESDAY, DEC. 31
9 am	Case-Shiller home prices	Oct.		--	13.3% y-o-y
9:45 am	Chicago PMI	Dec.		61.0	63.0
10 am	Consumer confidence	Dec.		76.2	70.4
WEDNESDAY, JAN. 1
	New Year's Day None scheduled
THURSDAY, JAN. 2
8:30 am	Weekly jobless claims	12/28		342,000	338,000
9 am	Market PMI	Dec.		--	54.4
10 am	ISM	Dec.		56.6%	57.3%
10 am	Construction spending	Nov.		0.8%	0.8%
FRIDAY, JAN. 3
TBA	Motor vehicle sales	Dec.		16.0 mln	16.3 mln

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The Probability Of A Stock Market Crash Is Soaring

While some individual stocks (cough TWTR cough) may have reached irrational bubble territory, the US equity market is undergoing a seemingly 'rational' bubble. However, as John Hussman illustrates in the following chart, the probability of a stock market crash is growing extremely rapidly.

Based on the this paper, Hussman simplifies the rational bubble as:

You only hold one long one more period if expected return is positive - requiring EXTRAGAIN x (1-p) + CRASHLOSS x (p) to be greater than 0.

As John goes on to explain, The diva is already singing, the only question is how long they hold the note...

Regardless of last week’s slight tapering of the Federal Reserve’s policy of quantitative easing, speculators appear intent on completing the same bubble pattern that has attended a score of previous financial bubbles in equity markets, commodities, and other assets throughout history and across the globe.  (more)

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Three Cycles To Watch in 2014

We hear about stock market cycles all the time.

We can look at short-term stuff like the annual seasonal cycle for U.S. stocks. For example, we are currently in the best three-month period of the year: November – January. We are also towards the beginning of the best six-month period of the year: November – May.

We can break it down even further and talk about the Santa Claus rally that typically comes late in December. But today, I want to focus on some of the longer term trends that seem to be coming together in a nice way.

The first one is the Presidential Cycle that represents the standard four-year presidential term. The second one is the Decennial Cycle that tracks stock market behavior for the 10 years of each decade. And the third one is the longer-term Secular Bull and Bear Market cycles.  (more)

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We Haven’t Seen Shocking Numbers Like This In Years

kingworldnews.com
There is reason to be concerned even with global stock markets trading near all-time highs.  There is a stunning chart featured below which all KWN readers around the world need to see.
If you look at the chart below it reveals there are some serious warning signals even as many major indexes have been trading near all-time new highs.  You will see figures in here that are breaking records not seen since 1987!
Here is the latest Investors Intelligence report along with the all-important sentiment chart:  “Stocks surged after last Wednesday’s Fed surprise with nearly all indexes ending the week at record highs.  Short term indicators were poised for rallies and they strengthened to end with universal bull confirmed status.  More important were numerous confirming medium term oscillating chart reversals up.  They suggested the move was more than a year-end rally.  A week ago we noted hints of developing skepticism but they quickly ended with an even higher bullish reading….
READ MORE

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BEAR GRIP: 9 ways 2013 changed gold for good

The price of gold is down 28% in 2013 and is set to break the 12-year bull run that took it from around $270 an ounce at the end of 2000 to a record high above $1,900 in September 2011.
Gold's $480 an ounce fall in 2013 is the worst performance since 1980, when the yellow metal hit $850 an ounce, in inflation adjusted terms still the all-time high.
Here are nine ways 2013 changed the nature of the gold market and pulled it into bear territory:

1. A collective loss of confidence

Gold bugs used to be able to roll with the punches and absorb price shocks. This year they had no fight left  (more)
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How to Trade Breakouts for Bigger Gains and Less Risk

Stock charts are used by traders to forecast price action. These patterns are useful, but they are certainly not infallible. Rather than using them for market forecasts, I prefer to use patterns to develop complete trading strategies. Each pattern offers a forecast of the potential gain and a point where that forecast is proven wrong by the market action.

There are many investors who don't use chart patterns. In A Random Walk Down Wall Street, author Dr. Burton Malkiel showed that investors could not tell the difference between charts generated by actual market movements and a random number generator. Of course, Dr. Malkiel is correct that the patterns show up in random data. But that has nothing to do with whether or not the patterns are useful.  (more)

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Top 30 Stocks 2013 Ranked by % Return with Charts

2013 has been a big year for stocks as the S&P 500 has moved up over 28% YTD and only three trading days remain.
To find the top performers for 2013, I ran a stock screen at FINVIZ. ETFs were excluded and volume had to average atleast 300,000 shares per day.
Looking back is an extremely effective form of post trade analysis, especially as most big gainers share common traits like strong fundamentals.

Top Stocks 2013

1. ZHNE, YTD Return +936.17%
Zhone Technologies, Telecom-Fiber Optics

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Long Term Interest Rates Headed Higher and Economy is Too Broke to Afford It

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How Doug Casey Would Invest for Profit in 2014

by Doug Casey, Chairman
Casey Research

What’s likely to pay off the most in 2014? That’s the question Kitco News has been asking notable investors, including legendary contrarian speculator Doug Casey. Discover how Doug would allocate $10,000 in the markets for 2014, and compare it to how other experts have answered the question for this highly interesting interview series.
With increasing political interference in the financial sphere and ramped-up money printing worldwide, all investors have become speculators today… whether they want to be or not. That’s why it’s even more important today than ever to recognize that trend, and to “make the trend your friend,” as Doug is fond of saying. Get started on that course today… with the next best thing to having Doug Casey at your side.
Continue Reading at CaseyResearch.com…
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Be prepared: Wall Street advisor recommends guns, ammo for protection in collapse

A top financial advisor, worried that Obamacare, the NSA spying scandal and spiraling national debt is increasing the chances for a fiscal and social disaster, is recommending that Americans prepare a “bug-out bag” that includes food, a gun and ammo to help them stay alive.
David John Marotta, a Wall Street expert and financial advisor and Forbes contributor, said in a note to investors, “Firearms are the last item on the list, but they are on the list. There are some terrible people in this world. And you are safer when your trusted neighbors have firearms.”
His memo is part of a series addressing the potential for a “financial apocalypse.” His view, however, is that the problems plaguing the country won't result in armageddon. “There is the possibility of a precipitous decline, although a long and drawn out malaise is much more likely,” said the Charlottesville, Va.-based president of Marotta Wealth Management.  (more)

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5 Moves to Make Before 2014

While it’s tempting to slip into an eggnog stupor from Christmas Eve to New Year’s Day, there are five items we should all check off of our to-do lists before the ball drops on 2014…

Review your loss carry forward numbers. If you have any capital loss carry forward from previous years, now is a good time to take some profits. You can take your gains and offset them against your carry forward, plus $3,000. Who knows when our desperate government will still demand its share of our gains via taxes but leave us alone to cover our losses? Offset those carry forward losses and take some profits where it makes sense to do so.
Maximize your 401(k) and IRA contributions. If you’re over 50, don’t forget the catch-up contribution. You can contribute $17,500 per year to a 401(k), plus an additional catch-up contribution of $5,500. If you have an IRA, you can contribute $5,500, plus a catch-up contribution of $1,000. Check with your CPA for the details specific to you. (more)
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'Blood in the Streets' Gold Miner Play Could Pay Off Big

Haters gonna hate, politicians gonna lie, and gold bashers gonna bash. The third of these homespun truisms has never been more prevalent then of late, as nearly every pundit I've heard these days is ready to toss the metal, and miners, out like a red-headed stepchild.
Year to date, gold prices have admittedly been dismal. So far in 2013, SPDR Gold Trust (NYSE: GLD) is down more than 28%. Mining stocks have fared even worse.
Year to date, Market Vectors Gold Miners (NYSE: GDX) is down 54%. That's the worst performance in the sector since the widespread equity meltdown of 2008.
The chart below shows the fund trading well below both the short-term, 50-day moving average and the long-term, 200-day moving average. In fact, GDX now trades just slightly above multi-year lows.

So, what's made gold and gold miners such an unappealing trade this year?  (more)
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Hormel Foods Corporation (NYSE: HRL)

Hormel Foods Corporation processes, markets, and sells consumer-branded meat and food products. The Grocery Products segment offers shelf-stable food products, including canned luncheon meats, shelf-stable microwaveable meals, stews, chilies, hash, meat spreads, flour and corn tortillas, salsas, and tortilla chips in the retail market. The Refrigerated Foods segment provides branded and unbranded pork and beef products for retail, foodservice, and fresh product customers. The Jennie-O Turkey Store segment offers branded and unbranded turkey products for retail, foodservice, and fresh product customers. The Specialty Foods segment is involved in the packaging and sale of various sugar and sugar substitute products, salt and pepper products, liquid portion products, dessert mixes, ready-to-drink products, sports nutrition products, gelatin products, and private label canned meats to retail and foodservice customers. The International and Other segment manufactures, markets, and sells its products internationally.
To review Hormel’s stock, please take a look at the 10-month chart of HRL (Hormel Foods Corporation) below with my added notations:

The $44 level (blue) was clearly a key point of resistance for HRL from August through mid-November. In addition, the stock formed a trendline of support (red) starting back at the end of August. These two levels combined had HRL stuck within a common chart pattern known as an ascending triangle. The stock broke through the $44 level to a new 52-week high towards the end of November and has now pulled back to that level.

The Tale of the Tape: HRL broke the resistance of its ascending triangle. A long trade could be made on a pull back to $44. A break back below the $44 level would possibly negate the forecast for a move higher.
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Dow on track for best year since 1996

The Dow Jones Industrial Average (Dow Jones Global Indexes: .DJI) is on track to end the year with its biggest percentage gain since 1996 and is almost certain to have its best year in a decade. 

If it closes on Dec. 31 above 16,422.11, the Dow will beat its 25.32 percent surge in 2003. 

That would make it the best year since 1996, when the Dow gained 26.01 percent. 

If the Dow ends above 16,512.53, it would beat even that year's surge, but it would only add one year to the bragging rights because it was up 33.45 percent in 1995.

The Dow is also heading for its fifth straight annual gain, its longest winning streak since nine consecutive gains ending in 1999.

The index is up 87 percent since it closed at 8,776.39 on Dec. 31, 2008.

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3 Trends to Watch in 2014

Last December, few people would have expected market returns of 30% in 2013.

I entered 2013 modestly bullish and have consistently recommended staying invested throughout the year.

But this time last year, I was steadfast in my belief that dividend-paying stocks would outperform in 2013 and that “the best values in the world” were in Europe.

Well, so much for that. U.S. stocks have trounced all their peers, and non-dividend-paying stocks have beaten the pants off of their dividend-paying brethren.

As they say, “It’s hard to make predictions, especially about the future.”  (more)

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Home Builders Poised to Ride Jobs Wave

Mortgage rates have been the crucial variable for home builders this year. Next year it may be jobs instead.

This has, on balance, been a good year for home builders. But rising interest rates in the summer put a dent in sales that spooked investors, sending the S&P home-building index down 29% from its peak this year in May to its September trough.

Business bounced back in October, with new homes selling at an annual rate of 444,000, up from September's 354,000. Economists expect the November figures, due Tuesday, will show the recovery remained intact, with an annualized 450,000 homes sold. But investors remain warier than they were in the spring: The home-building index is still 15% below its May high.  (more)

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Chicago Bridge & Iron Company N.V. (NYSE: CBI)

Chicago Bridge & Iron Company N.V. provides conceptual design, technology, engineering, procurement, fabrication, construction, and commissioning services to customers in the energy, petrochemical, and natural resource industries worldwide. The Steel Plate Structures segment offers engineering, procurement, fabrication, and construction services, including mechanical erection services for the hydrocarbon, water, and nuclear industries. The Project Engineering and Construction segment provides engineering, procurement, fabrication, and construction services for upstream and downstream energy infrastructure facilities. The Lummus Technology segment offers licenses, services, catalysts, and proprietary equipment for the hydrocarbon refining, petrochemical, and gas processing industries.
To review Chicago’s stock, please take a look at the 9-month chart of CBI (Chicago Bridge & Iron Company N.V.) below with my added notations:

CBI has been trading sideways for the last month or so. Over that period of time, the stock has formed a clear resistance level at $80 (blue). In addition, the stock has also created a strong level of support at $75 (green) that has held since the 2nd week of November. At some point the stock will have to break one of those two levels.

The Tale of the Tape: CBI has clear levels of support ($75) and resistance ($80). The possible long positions on the stock would be either on a pullback to $75, or on a breakout above $80. The ideal short opportunity would be on a break below $75.
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Will USA Default Or Inflate? Mike Maloney

In the short video below, Mike Maloney from Hidden Secrets of Money explains the two options, Default or Inflate and he gives a very educated guess as to which the US government will decide on and hint, it isn’t the right answer and will only drag the US economy further down the debt hole.

Maloney makes another very good point about freedom being more important than wealth because if you do not have the freedom to keep your wealth from the governments grubby paws, then wealth means nothing.

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This Chart Shows Where the Bull Market Will End

While prices are rising, investors need to maximize their gains. When prices turn down, investors need to minimize their losses. The problem many investors face is worrying about a bear market during the bull market. Worries can be stopped by switching to cash, but then investors miss gains, and failing to take advantage of market gains destroys potential wealth.

We do believe that it is OK to worry about the state of the market. However, we don't believe it is OK to act on those worries without a plan. Investment actions should be based on plans that react to the market, and the 10-month moving average (MA) is the simplest way we know to do this.

Before we explain why, this chart of SPDR S&P 500 (NYSE: SPY) can help highlight the importance of this indicator.  (more)

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JPMorgan: Time Is Ripe For Bottom-Feeding on Gold, Silver Miners

Just when gold and silver miners look the bleakest is when they are the most attractive, according to metals analysts at JPMorgan.

24/7 Wall Street said that while 2014 may appear to be shaping up as a rotten year for miners, JPMorgan believes there is some overlooked value to be found among the waste.

“Central banks around the world are printing money at a furious pace, debasing the value of their local currency,” 24/7 Wall Street reported. “So whether it is a question of gold and silver as a hedge, an industrial commodity or simply a straight contrarian stock trade, the JPMorgan team thinks now is the time to look hard at the top names.”

All of the miner names recommended by JPMorgan trade on the New York Stock Exchange.  (more)

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Triple-Digit Profits Possible With This Dogs of the Dow Strategy

The Dogs of the Dow is a well-known trading strategy. There are a number of variations, but last year I explained how to use call options to capture triple-digit gains from the Dogs. The results are now in for 2013, and a $1,089 investment grew to over $3,000 with my approach. Before looking at what to do now, let's review how I recommend trading the Dogs of the Dow and what happened in 2013.
The basic idea behind the Dogs of the Dow is to buy the 10 highest yielding stocks in the Dow Jones Industrial Average and rebalance the portfolio once a year. The Dow Jones Industrial Average contains 30 of the biggest companies in the world. There is little risk that a company can go into bankruptcy while it is a member of the Dow, and that reduces the risk of buying the stocks. The Dogs are the stocks that offer the best value, using the dividend yield as a measure of value. Over time, the strategy is expected to outperform the index.
Most studies agree that the Dogs of the Dow is an effective stock-picking strategy with the results at least matching the buy-and-hold returns available from the index over the long term.
One of the variations of the strategy is to buy only the five lowest priced stocks from the list of the 10 highest yielding stocks. Most studies find this approach does better than a buy-and-hold strategy.
My recommended variation is to buy long-term call options on the five lowest priced, high-yielding stocks. Last year, I recommended calls expiring in January 2014 that would give us exposure to the stocks for one year. To minimize trading costs, I recommended calls with strike prices as close as possible to the stock's price at the time. The exact options are shown in the table below.

*As of Dec. 19 open

This strategy significantly outperformed buying these five stocks. The gain in the stocks would have been 22.5%. Dividends could have added another 4% or so to the strategy. The Dogs of the Dow had a great year, but my call option strategy did more than six times better.
This year, the five lowest priced, high-yielding stocks and my recommended January 2015 call options are:

Buying these five call options would cost about $1,306. Because these five options would cost much less than 100 shares of each stock, traders are committing a smaller amount of funds to this strategy than they would if they bought each stock. The trading capital saved by using call options could be invested in another strategy, providing diversification and the opportunity for additional gains.
The risk is limited to the price paid for the options. In the unlikely event that all five stocks fall to zero, the trader would lose less than $1,306. If we see a new bear market in 2014, or a significant sell-off in stocks, investors following a buy-and-hold strategy with the Dogs of the Dow stocks could lose much more than that in dollar terms.
Recommended Trade Setup:
-- Buy the five call options identified above to duplicate the Dogs of the Dow strategy
-- Do not use stop-losses
-- Close all trades at the end of 2014
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Responsys Inc (NASDAQ: MKTG)

Responsys, Inc. provides email and cross-channel marketing solutions that enable companies to engage in relationship-based marketing across various interactive channels. The company offers Responsys Interact suite, a software-as-a-service platform that provides marketers with a set of integrated applications to create, execute, optimize, and automate marketing campaigns across various channels, including email, mobile, social, the Web, and display. Its platform also leverages third-party applications and data from real-time sources allowing customers to deliver targeted content to its customers and known prospects as part of their interactive marketing campaigns. In addition, the company provides professional services, such as strategic, creative, deliverability, campaign, education, and technical services.
Please take a look at the 1-year chart of MKTG (Responsys, Inc.) below with my added notations:

After rallying from beneath $6 to $18 in September, MKTG formed a solid resistance at that $18 (blue). Earlier this month, the stock pushed through that resistance on a large increase in volume. Now, MKTG is clearly resisting $20 (red).

The Tale of the Tape: MKTG has a level of resistance at $20 and support at $18. A long trade could be made on a break through $20, or on a pullback to $18, with a stop placed under the level of entry. Traders could also enter a short trade on a break below $18.
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China Interest Rate Crisis Continues: 7-Day Interest Rate Doubles to 10% in One Week; China Bans Words “Cash Crunch”

globaleconomicanalysis.blogspot.com / Mike “Mish” Shedlock / Monday, December 23, 2013 3:21 AM
A “cash crunch” is on in China. But don’t call it that, because China banned use of the term last week.
The New York Times reports China Rates Approach Crisis Levels Despite Central Bank Measures.

 An exceptional bid by China’s central bank to curb soaring interest rates and relieve pressure on the financial system appeared to have come up short on Monday, as Chinese money market rates shrugged off the measure and continued to approach the crisis levels seen in June.
The central bank, the People’s Bank of China, said late Friday that it had provided more than 300 billion renminbi, or about $50 billion, in short-term funds to selected banks over a three-day period that week.
Rates continued to surge on Monday, however, in China’s money markets — a key source of short-term funding for commercial banks and also for financial institutions engaged in risky, off-balance-sheet shadow lending.

READ MORE

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Former Goldman Banker To Head CMHC: “Canada’s Mortgage Monster”

Back in 2011 and 2012 we profiled the one organization that was among the key support pillars not only under Canada’s housing market (and according to many, bubble), but also the entity that by providing tens of billions in cash and loan support to Canada’s banks, served to rescue the financial sector from rather unpleasant consequences: the Canadian mortgage insurer Canada Mortgage & Housing Corporation (CMHC) also known as “Canada’s Mortgage Monster.”
Recall from a 2012 report by the Canadian Center for Policy Alternatives:

 The official story of the 2008 financial crisis goes like this: American and international banks got caught placing bad bets on U.S. mortgages and had to be bailed out. But not in Canada. Through the financial crisis, Canadian banks were touted by the federal government and the banks themselves as being much more stable than other countries’ big banks. Canadian banks, we were assured, needed no such bailout.

However, in contrast to the official story Canada’s banks received $114 billion in cash and loan support between September 2008 and August 2010. They were double-dipping in not only two but three separate support programs, one of them American. They continued receiving this support for a protracted period while at the same time reaping considerable profits and providing raises to their CEOs, who were already among Canada’s highest paid. In fact, several banks drew government support whose value exceeded the bank’s actual value. Canadian banks were in hot water during the crisis and the Canadian government has remained resolutely secretive about the details.

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First Trust NASDAQ Global Auto Index (NYSE: CARZ): This ETF Could Be the Biggest Winner in 2014

ETFs are designed to decrease risks by offering investors access to a group of stocks. However, the use of highly specialized indexes by ETFs can increase exposure to the riskiest sectors and lead to large losses when trends reverse. To find the right balance, we look for ETFs that have diversified holdings and can benefit from several investment trends.

Heading into 2014, we see several important economic themes developing that should have a large impact on stocks. In the U.S., robust retail spending in November and an upward revision to October's data has led to hopes that consumer spending will pick up in 2014. Since consumer spending accounts for about two-thirds of GDP, it is unlikely we'll experience a recession if this trend continues.

Recent data also indicates that Europe will finally be joining the U.S. economy in an expansion. And with Asian economies expected to expand too, this could be the first synchronized global expansion since at least 2008, when the credit market crisis sparked deep economic declines around the world.  (more)

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ISIS Pharmaceuticals, Inc. (NASDAQ: ISIS)

Isis Pharmaceuticals, Inc. engages in the discovery and development of antisense drugs using novel drug discovery platform. The company’s flagship product, KYNAMRO injection, is an apo-B synthesis inhibitor for patients with homozygous familial hypercholesterolemia for the reduction of low-density lipoprotein cholesterol. It also has a pipeline of 28 drugs in development for the treatment of cardiovascular, severe and rare, neurologic, and metabolic diseases, as well as cancer. The company has collaboration agreements with AstraZeneca to discover and develop antisense drugs against five cancer targets; Biogen Idec to develop and commercialize ISIS-SMNRx for the treatment of spinal muscular atrophy; and Bristol-Myers Squibb to discover, develop, and commercialize antisense drugs targeting proprotein convertase subtilisin/kexin type 9.
Please take a look at the 1-year chart of ISIS (Isis Pharmaceuticals, Inc.) below with my added notations:

ISIS has rallied quite nicely for most of the year. Over the last 3 months, the stock seems to have hit a wall at $40 (red). A move through that level would be a 52-week high breakout and should mean much higher prices for the stock. ISIS has currently been holding at $36 (green), so a break below that probably means a fall back down to the previous $30 support (blue).

The Tale of the Tape: ISIS has a key level of resistance at $40. A long trade could be made on a break through that level, with a stop placed under $40. Traders could also enter a long at $36, or a short on a break below $36.

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This is the Key to Gold’s Comeback

For investors having a rooting interest in the price of gold, the catalyst for a recovery may be in sight.

“Buy gold if you believe in math,” Brent Johnson, CEO of Santiago Capital, recently told CNBC viewers.

Johnson says central banks are printing money faster than gold is being pulled from the ground, so the gold price must go up.

And Johnson is on the right track, but central banks have partners in the money creation business — commercial banks.

And while the Fed has been huffing and puffing and blowing up its balance sheet, banks have been licking their wounds and laying low. Money has been cheap on Wall Street the last five years, but hard to find on Main Street.  (more)

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AECOM Technology Corp (NYSE: ACM)

AECOM Technology Corporation, together with its subsidiaries, provides professional technical and management support services for public and private clients in worldwide. The company operates through two segments, Professional Technical Services (PTS) and Management Support Services (MSS). The PTS segment offers planning, consulting, architectural and engineering design, and program and construction management services for a range of projects, including highways, airports, bridges, mass transit systems, government and commercial buildings, water and wastewater facilities, and power transmission and distribution. The MSS segment provides program and facilities management and maintenance, training, logistics, consulting, technical assistance, systems support and integration, technical personnel placement, and field services primarily for agencies of the United States government.
ACM has confirmed a head and shoulders (H&S) pattern. Please take a look at the 1-year chart of ACM (AECOM Technology Corporation) below with my added notations:

After going almost nowhere this past year, ACM created a key level of support at $28 (blue). That $28 level was also the “neckline” support for ACM’s H&S reversal pattern. Above the neckline you will notice the H&S pattern itself (red).
Remember, patterns such as an H&S need to confirm to have the meaning that they imply. Confirmation of the H&S would occur if the stock were to break below its $28 support, and as you can see, ACM did exactly that last week.

The Tale of the Tape: ACM has confirmed a head & shoulders pattern and should be moving lower. A short trade could be entered on any rallies up to or near the previous $28 level. A break back above $28 would negate the forecast for a move lower and create an opportunity for a long trade.
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US Weekly Economic Calendar

time (et)	report	period	Actual	CONSENSUS forecast	previous
MONDAY, DEC. 23
8:30 am	Personal income	Nov.	0.2%	0.4%	-0.1%
8:30 am	Consumer spending	Nov.	0.5%	0.5%	0.4%
8:30 am	Core PCE price index	Nov.	0.1%	0.1%	0.1%
8:30 am	Chicago Fed national activity index	Dec.	0.25 (3-mo)	--	0.12 (3-mo)
9:55 am	UMich consumer sentiment index	Dec.		82.9	82.5
TUESDAY, DEC. 24
8:30 am	Durable goods orders	Nov.		2.0	-1.6%
9 am	FHFA home price index	Oct.		--	8.5% y-o-y
10 am	New home sales	Nov.		440,000	444,000
WEDNESDAY, DEC. 25
	Christmas Day None scheduled
THURSDAY, DEC. 26
8:30 am	Weekly jobless claims	12/21		N/A	379,000
FRIDAY, DEC. 27
	None scheduled

 
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Ten Predictions for 2014

Some have dreamt of it, others have only imagined it. Now Saxo Bank, the online multi-asset trading specialist and investment advisor has released its ‘Outrageous Predictions’ for 2014. They fully admit that the probability of any of them coming to fruition is rather low. But, that hasn’t stopped them making them. Be outrageously provocative and it can be predicted that as sure as eggs are eggs the crystal ball will go cloudy on you. But, it makes for light-hearted reading along the rocky road of fortune-telling. The saving grace is that if any one of them does actually hit the truth on the nose, Saxo Bank will be saying ‘I told you so’. If they don’t come true, Saxo’s drivel will be forgotten in the mass of pages on the internet.
Continue Reading at ToTheTick.com…
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London’s Gold Vaults are Empty – This is Why

Today gold slid under $1200 per ounce, dropping to a level not seen in three years. Judging by the price action one would think that gold is not only overflowing from precious metal vaults everywhere, but can be found thrown away on the street, where nobody even bothers to pick it up. One would be wrong. In fact, as Bloomberg’s Ken Goldman reports, “you could walk into a vault in London and they were packed to the rafter with gold, and the gold would trade from me to you to somebody else. You could walk into these vaults today and they are virtually empty. All that gold has been transferred out of London, 26 million ounces….” To find out where it has gone and why it is never coming back, watch the clip below (spoiler alert: listen for the line: “the Chinese don’t want US dollars anymore, they want gold“).



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Saxo Bank's 10 Outrageous Predictions For 2014

Although the probability of any one of the predictions coming true is low, they are deduced strategically by Saxo Bank analysts based on a feasible - if unlikely - series of market and political events. As Saxo's chief economist notes, "This isn't meant to be a pessimistic outlook. This is about critical events that could lead to change - hopefully for the better. After all, looking back through history, all changes, good or bad, are made after moments of crisis after a comprehensive failure of the old way of doing things. As things are now, global wealth and income distribution remain hugely lopsided which also has to mean that significant change is more likely than ever due to unsustainable imbalances. 2014 could and should be the year in which a mandate for change not only becomes necessary, but is also implemented."

These Outrageous Predictions are not Saxo Bank's official calls for 2014, but rather an exercise in feeling out the major risks to capital preservation, and intended to encourage investors to prepare for the worst case scenario before trading or investing...
Saxo Bank's Outrageous Predictions 2014
1. EU wealth tax heralds return of Soviet-style economy
Panicking at deflation and lack of growth, the EU Commission will impose wealth taxes for anyone with savings in excess of USD or EUR 100,000 in the name of removing inequality and to secure sufficient funds to create a "crisis buffer". It will be the final move towards a totalitarian European state and the low point for individual and property rights. The obvious trade is to buy hard assets and sell inflated intangible assets. (more)

   TF OutrageousPredictions 2014

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If you have children, you need to see these numbers

sovereignman.com / Simon Black
According to a recent survey by the Pew Research Center, just 33% of Americans think their children will have a better life than they did. On the other hand, 62% believe their children will be worse off.
They’re likely to be right.  The typical American family has seen its real income (adjusted for inflation) fall for 5 consecutive years now, and it earns less in real terms that it did in 1989.
According to the Census Bureau, median household income fell in 2012, and it languishes 8.3% below the pre-crisis peak in 2007.
The Brookings Institution, meanwhile, calculates that real incomes for working-age men in the US have fallen by 19 per cent since 1970.
(Of course, if you’re fortunate enough to be a member of the super-rich who, thanks in large part to central bankers driving up asset prices, saw their real incomes rocket by 20% in 2012.)
In Europe things look even more dire.  Just 28% of Germans think their children will be better off than they were.  In the UK it’s 17%, in Italy 14%, and in France just 9%.
In Britain, research by the Financial Times shows that those born in 1985 are the first cohort to suffer a living standard worse than those born 10 years before them.
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The Next Great Bubble Bursts in 2014

The greatest confluence of down-cycles since the 1930s is just ahead.

Harry Dent of HS Dent Investment Management explains why he predicts a market crash in the third quarter of the year and that the U.S. is headed towards bankruptcy. Stock Market.. an aging Bull Market? Real Estate Party Over? Invest In Gold? Europe Crash Impact? The Government Has To Fail... Survive and Prosper in 2013 with Harry Dent.
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LBMA Chairman Tells Producers Gold To Plunge $400 In 2014

kingworldnews.com 

On the heels of some wild trading action this week, today London metals trader Andrew Maguire shocked King World News when he told KWN that in a private closed-door meeting with producers, ScotiaMocatta’s Simon Weeks, who is Chairman of the LBMA, tried to frighten producers into forward selling by telling them gold was going to plunge ‘another $400 in 2014.’  Below is what Maguire had to say in the fascinating interview.
Magurie:  “This tapering announcement this week will only accelerate China’s move to internationalize their currency with a gold-backed yuan — something they are aggressively doing now (by purchasing gold)….
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Junior Mining Stocks that Will Let You Sleep at Night: Ralph Aldis

The Gold Report

The best time to buy gold is when the market hates it, especially when it comes to junior explorers with market caps under $1 billion, asserts Ralph Aldis, senior mining analyst with U.S. Global Investors. In this interview with The Gold Report, Aldis shares his main modeling themes and companies that fit the bill. He also explains the win-win-win advantages of flow-through stock issuance, a technique allowed by some noteworthy Canadian provinces.

The Gold Report: At the New Orleans investment conference, U.S. Global Investors CEO Frank Holmes reminded investors that gold is not a means to get rich quick, but should act as a diversifier in a portfolio, a form of insurance. Do you have to remind investors of that?
Ralph Aldis: We do. We always stress that no more than 10% of a portfolio should be exposed to precious metals. Given gold’s poor performance in the last two or more years, the trend has been to chase the market and the S&P 500. This is exactly when investors should be using gold plays to diversify and provide a bit of insurance. If they made good money in the market, they could take 5% or 10% off the table and deploy it in gold plays.
Continue Reading at TheAuReport.com…
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Eagle Ford Shale Decline Rate Shoots Up A Stunning 10% In One Month

The U.S. and Global financial system is being kept alive by a highly leveraged paper system.  The Fed’s recent announcement of a $10 billion taper has had the anticipated impact on the precious metals and bond market.
Even though I thought the Fed would never taper, the end result will be the same.  As I have mentioned several times, Energy drives the markets… not Finance.  The so-called U.S. Shale Revolution is the only thing that is holding off the collapse of the global markets as it has brought on more oil supply (only temporarily), desperately needed by the world.
Unfortunately, it looks like the “Illusion of Sustainability” in shale oil production took a BIG HIT, as the forecasted decline rate at the Eagle Ford Shale Field increased double-digits in just one month.

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"BOOM": Why the price of a surprising commodity could soar 710% from here

From Pierce Points:

The next big boom in commodities might not be copper, gold, or even oil.

It could be a more obscure market. Natural gas liquids, or NGLs.

I discussed last week how European chemical makers are scrambling to secure supplies of cheap natgas liquids like ethane. Supplies that have been unlocked from America’s booming shale gas production.

Last week we saw evidence that the NGLs craze isn’t limited to European buyers.

Asia also wants to get in on the action...

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Man Who Predicted Gold Smash Tells Investors What’s Next

kingworldnews.com / December 19, 2013
Today the man who two days ago correctly predicted the gold market would be smashed directly after the Fed meeting spoke with King World News about what investors around the world should expect next.  William Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, also addresses major developments in the war on gold as well as what this will mean for investors.  Below is what Kaye had to say in his powerful and timely interview.
Eric King:  “Bill, you did a fantastic job two days ago of noting that physical gold was being looted once again from the ETF GLD.  You also repeatedly warned that you were very concerned this had taken place directly in front of the upcoming Fed decision.  You were suspicious of the raid because you believed that metal was going to be used to smash the price of gold directly after the Fed decision and that’s exactly what we have seen.  What are your thoughts now?”
Kaye:  “Thank you, Eric, but the bad news is the bad guys are still in charge.  That was reflected with yesterday’s decline after the Fed decision, and once again today.  We have the biggest POMO of the year today….
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Dr. Marc Faber’s three bold predictions for 2014

He's one of the world's most noted market contrarians. Now Dr. Marc Faber, publisher of The Gloom, Boom & Doom Report, has three very bold predictions for the upcoming year.

In an interview with Talking Numbers, Faber offers what he thinks is next for the world in 2014:

1. The market will continue to decline from its November high of 1,813

Faber says: "My sense is that at the present time, the US market is relatively expensive compared to foreign markets, especially to European markets and to emerging markets. On a cyclically-adjusted P/E [price-to-earnings] basis, it is actually going to return very little over the next seven to 10 years. (more)

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MedAssets, Inc. (NASDAQ: MDAS)

MedAssets, Inc., a financial and performance improvement company, provides technology-enabled products and services for hospitals, health systems, and other ancillary healthcare providers in the United States. It operates in two segments, Spend and Clinical Resource Management (SCM) and Revenue Cycle Management (RCM). The SCM segment offers a suite of cost management services, supply chain analytics, and data capabilities; strategic sourcing and group purchasing services; medical device and clinical resource consulting services; supply chain outsourcing and procurement services; capital equipment services, including equipment planning, assessment, and deployment services. The RCM segment provides a suite of software-as-a-service or Web-based software and technology-enabled services addressing various revenue cycle processes, such as patient access and financial responsibility, clinical documentation, charge capture and revenue integrity, pricing analysis, claims processing, denials management and reimbursement integrity, payer contract management, extended business office revenue recovery, accounts receivable services, and outsourcing services.
Please take a look at the 1-year chart of MDAS (Med Assets, Inc.) below with my added notations:

MDAS has had a rough go of it over the last month and a half, to say the least. In a market that’s mostly been going higher, MDAS has continued to break lower. A level that seems to stand out on the stock is $20. You can see how $20 has been both support (August and November) and resistance (January, February and April) throughout the year. Earlier this week the stock fell back below $20.

The Tale of the Tape: MDAS has broken $20 and should be moving overall lower. Traders could enter a short trade at $20, while a long trade could be made on a break back above that level with a stop placed below it.
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Dow Chemical (NYSE: DOW) Breakout Signals This Stock is an Immediate 'Buy'

Dow Chemical (NYSE: DOW) has seen bullish price action again of late, pushing past a crucial multiyear resistance line, which could mean more upside ahead.

This diversified chemical company, which manufactures plastics, chemicals and agricultural products, has seen overwhelmingly positive news flow recently.

On Dec. 9, DOW was honored by the Human Rights Campaign (HRC) for its 100% percent rating on the corporate equality index, a national benchmarking tool on corporate policies and practices related to lesbian, gay, bisexual and transgender (LGBT) employees. This marked the ninth consecutive year of recognition for DOW.

On Dec. 11, the Environmental Protection Agency (EPA) honored DOW in its 18th annual U.S. Presidential Green Chemistry Challenge Award. The company has now been recognized nine times since the award came into existence in 1996.  (more)

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The Taper Is On – 8 Ways That This Is Going To Affect You And Your Family

The unelected central planners at the Federal Reserve have decided that the time has come to slightly taper the amount of quantitative easing that it has been doing.  On Wednesday, the Fed announced that monthly purchases of U.S. Treasury bonds will be reduced from $45 billion to $40 billion, and monthly purchases of mortgage-backed securities will be reduced from $35 billion to $30 billion.  When this news came out, it sent shockwaves through financial markets all over the planet.  But the truth is that not that much has really changed.  The Federal Reserve will still be recklessly creating gigantic mountains of new money out of thin air and massively intervening in the financial marketplace.  It will just be slightly less than before.  However, this very well could represent a very important psychological turning point for investors.  It is a signal that “the party is starting to end” and that the great bull market of the past four years is drawing to a close.  So what is all of this going to mean for average Americans?  The following are 8 ways that “the taper” is going to affect you and your family…
1. Interest Rates Are Going To Go Up
Following the announcement on Wednesday, the yield on 10 year U.S. Treasuries went up to 2.89% and even CNBC admitted that the taper is a “bad omen for bonds“.  Thousands of other interest rates in our economy are directly affected by the 10 year rate, and so if that number climbs above 3 percent and stays there, that is going to be a sign that a significant slowdown of economic activity is ahead.

Read more at http://investmentwatchblog.com/the-taper-is-on-8-ways-that-this-is-going-to-affect-you-and-your-family/#AIwgYXpl52gcogyl.99

The unelected central planners at the Federal Reserve have decided that the time has come to slightly taper the amount of quantitative easing that it has been doing.  On Wednesday, the Fed announced that monthly purchases of U.S. Treasury bonds will be reduced from $45 billion to $40 billion, and monthly purchases of mortgage-backed securities will be reduced from $35 billion to $30 billion.  When this news came out, it sent shockwaves through financial markets all over the planet.  But the truth is that not that much has really changed.  The Federal Reserve will still be recklessly creating gigantic mountains of new money out of thin air and massively intervening in the financial marketplace.  It will just be slightly less than before.  However, this very well could represent a very important psychological turning point for investors.  It is a signal that “the party is starting to end” and that the great bull market of the past four years is drawing to a close.  So what is all of this going to mean for average Americans?  The following are 8 ways that “the taper” is going to affect you and your family…
1. Interest Rates Are Going To Go Up
Following the announcement on Wednesday, the yield on 10 year U.S. Treasuries went up to 2.89% and even CNBC admitted that the taper is a “bad omen for bonds“.  Thousands of other interest rates in our economy are directly affected by the 10 year rate, and so if that number climbs above 3 percent and stays there, that is going to be a sign that a significant slowdown of economic activity is ahead.

Read more at http://investmentwatchblog.com/the-taper-is-on-8-ways-that-this-is-going-to-affect-you-and-your-family/#AIwgYXpl52gcogyl.99

The unelected central planners at the Federal Reserve have decided that the time has come to slightly taper the amount of quantitative easing that it has been doing.  On Wednesday, the Fed announced that monthly purchases of U.S. Treasury bonds will be reduced from $45 billion to $40 billion, and monthly purchases of mortgage-backed securities will be reduced from $35 billion to $30 billion.  When this news came out, it sent shockwaves through financial markets all over the planet.  But the truth is that not that much has really changed.  The Federal Reserve will still be recklessly creating gigantic mountains of new money out of thin air and massively intervening in the financial marketplace.  It will just be slightly less than before.  However, this very well could represent a very important psychological turning point for investors.  It is a signal that “the party is starting to end” and that the great bull market of the past four years is drawing to a close.  So what is all of this going to mean for average Americans?  The following are 8 ways that “the taper” is going to affect you and your family…
1. Interest Rates Are Going To Go Up
Following the announcement on Wednesday, the yield on 10 year U.S. Treasuries went up to 2.89% and even CNBC admitted that the taper is a “bad omen for bonds“.  Thousands of other interest rates in our economy are directly affected by the 10 year rate, and so if that number climbs above 3 percent and stays there, that is going to be a sign that a significant slowdown of economic activity is ahead.  (more)

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