The VIX (Volatility) could be the most important chart in the market today

The following chart tells two stories. The first is that the deficit spending and debt monetization of the past few years has calmed the markets. Volatility (more accurately fear), as measured by the VIX index of S&P 500 options, has meandered back below 20, implying that most financial market players are pretty relaxed about the world’s near-term prospects.
The second thing this chart says is that whenever the VIX drops into the 10-15 range for an extended time, craziness ensues. A lack of fear leads to overoptimistic investment decisions, which in turn produce big corrections. The resulting turmoil in the options markets is what the VIX measures.
In most cases, a VIX move back above 20 is followed by a quick spike above 30 and sometimes 40. With debt ceiling negotiations deadlocked and the deadline approaching, US stock futures are down nearly 1% as this is written on Sunday evening, implying that traders are spooked and pointing to a possible VIX move above 20 next week. Then, if history is any guide, the fun begins.
The simplest way to play a spike in volatility is with a “long volatility” exchange traded note (ETN) like VXX.  If VIX spikes, VXX will keep it company. But be aware that VXX is strictly a trading vehicle. It uses derivatives to replicate the VIX and (without going too deeply into how it happens) over time these instruments depreciate, causing VXX and other similar ETNs and ETFs to gradually lose value. So place the bet and then, win or lose, close it down within a month. But it might be an interesting month.
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Rite Aid (NYSE: RAD): Under $5 Stock's Breakout Could Make Traders 80% Profits

What's the first thing that pops into your mind when you think of low-priced stocks? I know for myself, I think of untested, start-up companies that are full of promise, as well as risk. Generally trading on future promise, a strong management team and investor hype, many companies with stocks under $5 per share never grow into profitable long-term investments.
Start-up high-tech and biotech firms are the companies that typically fall into this category. One rarely thinks of an over 4,600-unit, brick-and-mortar consumer chain with stores across 31 states. However, this is exactly what my breakout stock screener recently discovered.
Fully expecting the price chart to belong to one of the typical low-priced suspects listed above, I was surprised to see that it belonged to household name Rite Aid (NYSE: RAD).
Rite Aid was founded in 1927 and is the third largest drugstore chain in the United States. Once upon a time it was a nearly $50 stock, but it was knocked down into the low-priced world due to a heavy debt burden and intense competition from CVS Caremark (NYSE: CVS) and Walgreen (NYSE: WAG).  (more)

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Colgate-Palmolive Company (NYSE: CL)

Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. It offers oral care products, including toothpaste, toothbrushes, and mouth rinses, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care products comprising liquid hand soaps, shower gels, bar soaps, deodorants, antiperspirants, shampoos, and conditioners; and home care products, such as laundry and dishwashing detergents, dishwashing liquids, household cleaners, oil soaps, bleaches, and fabric conditioners. The company provides its oral, personal, and home care products primarily under the Colgate Total, Colgate Sensitive Pro-Relief, Colgate Max Fresh, Colgate Optic White, Colgate Luminous White, Colgate 360°, Colgate Plax, Palmolive, Protex, Softsoap, Sanex, Irish Spring, Speed Stick, Lady Speed Stick, Caprice, Ajax, Axion, Fabuloso, Murphy's, Suavitel, Soupline, Sorriso, Kolynos, elmex, Tom's of Maine, and Mennen brand names to wholesale and retail distributors.
To review Colgate's stock, please take a look at the 1-year chart of CL (Colgate-Palmolive Company) below with my added notations:
For the last (4) months CL has been forming a simple chart pattern known as a symmetrical triangle. Combining a down trending resistance (red) with an up trending support (blue) forms the triangle pattern. As the support and resistance converge on each other the pattern is created. Since there is no true way to know which way the stock will break, most traders will wait for the breakout or breakdown before entering a trade. Well, yesterday CL pushed through the triangle resistance and should be moving higher overall from here.

The Tale of the Tape: CL broke through its triangle resistance. A trader could enter a long position anywhere near the breakout point. However, if CL were to break back below the previous trend line resistance the stock will most likely fall back down to the triangle support.
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Q3 Earnings Warnings Second-Worst Since 2001

US companies are warning about Q3 earnings at the second highest level since 2001, with estimates well below what they were just three short months ago. Of course, the US equity markets don't care - having rallied aggressively in the face of this collapse; lubricated by multiple-expanding QE and rev. repo. As Reuters reports, companies issuing negative outlooks outnumber positive ones by 5.2-to-1, the most negative since the 6.3-to-1 ratio in the second quarter, when however the "second half recovery" (which has been once again indefinitely delayed, perhaps to the third half?) was said would take place momentarily and lead to another mythical rebound. Industrials, Materials, and Tech top the list for negative pre-announcements. (more)

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Methode Electronics (NYSE: MEI): Could Rocket 60% Higher by Mid-2014

I'm a big fan of buying stocks that have recently hit a new all-time high. Clearly they have strong momentum, but the main reason is that, because there is no overhead resistance, they often go higher.
And when that bullish chart is supported by a strong fundamental story, combined with a small, but steady dividend, the stock is often a winner. One stock that meets these criteria is small-cap Methode Electronics (NYSE: MEI), which manufactures component devices for original equipment manufacturers, including electronic, sensing and optical technologies.
With a market cap of just over $1 billion, this global manufacturer's main business segments are automotive, interconnect and power products. Automotive -- its largest segment -- currently accounts for about 60% of the company's revenue. This division supplies electronic and electromechanical devices and sensors to companies like Ford (NYSE: F) and General Motors (NYSE: GM). (more)

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