Friday, April 12, 2013

7 Red Flags That Say It's Time to Sell

Few investors have an unlimited supply of money to keep buying new stocks. So to maintain a healthy dose of cash for the next stock purchase, most investors need to keep an eye out for opportunities to sell existing holdings -- ideally with a nice gain.

In some instances, you'll have a clear sense of what a stock is worth, and you can simply sell your investment when shares have risen to your target price. But in most instances, no clear-cut exit exists.
When that's the case, keep holding your shares as long as business is going well. Just keep watching for these seven red flags, which may signal it's time to sell.
1. Watch the insiders. From time to time, an officer or a director at a company may look to sell shares -- especially if the stock has steadily risen in recent weeks. That's perfectly understandable. But when several of them do so at the same time, you should probably follow their lead.  If insiders don't think the stock holds value anymore, why should you?

History shows that stocks heavily purchased by corporate insiders outperform the broader market averages by roughly 2-to-1. To learn more about this and other market timing techniques, read "How to Excel at Timing the Market."  (more)

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Martin Armstrong – Eliminate The Income Tax, and Print The Difference

from Financial Survival Network
Martin Armstrong sees an increasing level of lawlessness as government tries ever harder to keep the system going. It can’t last and will eventually lead to a new currency. There is no other way. This means that your best bet for surviving the transition is gold/silver, stocks and real estate. Tangible goods are your key to survival. You need to be carefully examining your future retirement. Be sure to build relationships with health care providers. Failure to do so could leave you unable to obtain treatment.
This was lengthy interview touching upon many different areas. Our best discussion to date. Remember, government will always attempt to spend more than it takes in. Our responsibility as citizens is to prevent this natural course of events from happening again and again.
Click Here to Listen to the Audio
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FEI Company supplies scientific instruments for nanoscale applications and solutions for industry and science. Its products include transmission electron microscopes and scanning electron microscopes (SEMs); DualBeam systems, which include a SEM and focused ion beam system (FIB) on a single platform; stand-alone FIBs; and optical microscopes. The company offers products used in laboratories to enhance new product development and increase yields by enabling 3D wafer metrology, defect analysis, root cause failure analysis, and circuit edit for modifying device functionality in the semiconductor integrated circuit manufacturing and related industries, such as manufacturers of data storage equipment and other technologies. It also provides solutions for materials science market that enable scientific discovery and advancement for researchers and help manufacturers develop, analyze, and produce advanced products; and its products are used in mining for automated mineralogy, as well as in root cause failure analysis and quality control applications across a range of industries.
To review FEI's stock, please take a look at the 1-year chart of FEIC (FEI Company) below with my added notations:
1-year chart of FEIC (FEI Company) FEIF had stalled around $50 for about (5) months towards the end of last year. In January, the stock broke higher and rallied to where it currently sits. For the last (3) months the stock has been hitting resistance at $65 (red). A break through that resistance would be a new 52-week high for the stock and should mean higher prices moving forward.
The Tale of the Tape: FEIC has a 52-week high resistance at $65. A long trade could be entered on a break through that level with a stop placed under it.

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Hulbert Gold Sentiment At Record Lows

If you are sick and tired of reading Precious Metals sentiment updates on this blog, I do not blame you. As an author of a contrarian blog, my job is to report as an objective view as possible of sentiment indicators developing within the various asset classes. Right now, it seems that Gold is one of the few assets experiencing negative extremes worthy of attention, from a contrarian point of view. However, some of the readers disagree. Due to overwhelming focus towards the PMs sector in recent weeks, various individuals seem to think that I have turned into a die-hard Gold Bug. Obviously this couldn't be further from the truth. Let me explain. 
Within similar context, between August 2011 and November 2011, readers of the blog also held a view that I was a perma-bull on equities. If one was to consider previous posts hereherehereherehere and here, one should understand today (in hindsight) why I pushed major attention towards stocks over other asset classes. Stocks were extremely oversold and sentiment was extremely depressed between August and November 2011. Furthermore, on relative basis, global equities were very attractive against Precious Metals, Commodities and Bonds.
However, conditions have changed since those days. Stocks, particularly in the United States, have experienced a tremendous rally over the last two years. From the lows on 04th of October 2011 at 1075 on the S&P, the index is currently up over 45% and has become extremely overbought. At the same time, margins have started to contract and revenues/earnings are also following. As majority of the investors have missed the rally, they are not paying attention to fundamentals as greed blinds their judgement. They seem to be playing the usual chasing game over the last several weeks, with sentiment obviously turning extremely euphoric.  (more)

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Sam Zell: “The Stock Market Feels Like The Housing Market Of 2006″

Instead of the endless procession of “different this time”, “buy-the-dip”, “money-on-the-sidelines” asset-gathering, Muppet-fleecers that CNBC so typically trots out, Sam Zell graced them with his presence and the truth was allowed a voice for a few minutes. Joined by David Rosenberg, who clarifies the insanity that engulfs US equities, explaining in wonderment that it is “not surprising the market rises even in the face of bad ISMs, worse jobs, and worst NFIB data, because Japan and the US are embarking on a gargantuan quantitative easing that is the lynchpin behind the stock market.” It is not about being bullish, or bearish, or agnostic, it is understanding the driver of this market – and that is not the economy, not earnings, “it is the mother of all liquidity-driven rallies.” Maria B, soundbite in hand, is slammed for her “glibness” at not fighting the Fed but it is Sam Zell’s brutal honesty that shocks even the money-honey. “This is a very treacherous market,” Zell explains – thanks to the giant tsunami of liquidity, “the problems of 2007 haven’t been dealt with,” and given the poor macro data and earnings, “we are suffering through another irrational exuberance,” leaving the entire CNBC audience speechless when he concludes, “the stock market feels like the housing market of 2006.”
Maria B:
So don’t fight the Fed?
That’s a pretty glib comment for what is going on. You could have fought the Fed in 2000 and 2009 and done quite well… [thanks to the Fed] the market will tend to drift up - until something breaks.”  (more)

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Marc Faber to Moneynews: S&P 500 Could Decline 40%

The Standard & Poor’s 500 Index could drop 40 percent, according to contrarion investor Marc Faber.

“There are some people now calling for Dow Jones 18,000 or 20,000 by year end,” Faber told Newsmax TV in an exclusive interview. “The S&P could then easily drop by 40 percent.”

The editor and publisher of "The Gloom, Boom & Doom Report" said the market “needed the correction” starting in February or March. (more)

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Bail-in: The Birth of the New Financial Order

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