Monday, October 28, 2013

TD Ameritrade Holding Corp. (NYSE: AMTD)

TD Ameritrade Holding Corporation provides securities brokerage services and technology-based financial services to retail investors, traders, and independent registered investment advisors (RIAs) in the United States. The company's offerings include TD Ameritrade for self-directed retail investors; TD Ameritrade Institutional, which provides brokerage and custody services to independent RIAs and their clients; thinkorswim that offers a suite of trading platforms serving self-directed and institutional traders, and money managers; and Investools, a suite of investor education products and services for stock, option, foreign exchange, futures, mutual fund, and fixed-income investors; Amerivest, an online advisory service that develops portfolios of exchange-traded funds for long-term investors. It also offers products and services, such as common and preferred stocks, exchange-traded funds, options, futures, foreign exchange products, mutual funds, fixed income products, primary and secondary fixed income securities, closed-end funds, and preferred stocks, as well as margin lending, cash management services, and annuities.
To review TD's stock, please take a look at the 1-year chart of AMTD (TD Ameritrade Holding Corporation) below with my added notations:
1-year chart of AMTD (TD Ameritrade Holding Corporation) AMTD has been trading mostly sideways for the last 3 months. Over that period of time, the stock has formed an obvious resistance level at $28 (red), and in addition, the stock has also created a strong level of support at $25.50 (green). At some point the stock will have to break one of those two levels.

The Tale of the Tape: AMTD has identifiable levels of support and resistance. The possible long positions on the stock would be either on a pullback to $25.50, or on a breakout above $28. The ideal short opportunities would be on a break below $25.50.
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HCP (NYSE: HCP) This High-Yielding REIT Could Return Double-Digit Profits by Thanksgiving

With the recent decline in interest rates thanks to a strong bond market, dividend stocks are back in favor. Sectors that do well when bonds rally are setting up for a nice move higher.

HCP (NYSE: HCP) is a real estate investment trust (REIT) that owns and manages health care properties. I am not big on trying to figure out what stocks will do well under the Affordable Care Act (Obamacare), but rather look for stocks with charts that signal they are ready to go higher. With a generous 4.9% dividend yield and improving technical indicators, HCP is indeed set up for price gains.

As a group, stocks offering big dividends peaked in May when the bond market began to fall. At the time, the Fed first hinted that it was considering the tapering of its bond buying program. Utilities, REITs, housing and many consumer staples stocks headed lower as traders thought interest rates would rise. (more)

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US Stock Market -The Great American Wall Of Worry

Traders and investors all around the world is having trouble climbing over the wall of worry/fear with the US stock market, and rightly so. There is a lot of things taking place and unfolding that carry a high level of uncertainty. Let’s face it, who wants to invest money into the market when it’s hard to come by (high unemployment, banks are still extremely tight with their money, companies are nowhere near wanting to hiring new staff).
The hard pill to swallow is the fact that the stock market loves to rise when uncertainty is high. It’s almost doing it just to drive investor’s nuts who sold out near market bottom or recent correction. You must overcome the urge to short the market when the economy looks so bearish in the years ahead, and continue to trade with the trend.

Short Term Investing – Weekly Volatility Index Chart

Below you can see the fear index. The chart is self-explanatory showing where it should move next. But if you are not familiar with the VIX then here is definition by investopedia:
“The first VIX, introduced by the CBOE in 1993, was a weighted measure of the implied volatility of eight S&P 100 at-the-money put and call options. Ten years later, it expanded to use options based on a broader index, the S&P 500, which allows for a more accurate view of investors’ expectations on future market volatility. VIX values greater than 30 are generally associated with a large amount of volatility as a result of investor fear or uncertainty, while values below 20 generally correspond to less stressful, even complacent, times in the markets.”

Weekly Investing Chart of the SP500 Index

After reviewing the VIX chart above which points to stocks nearing a level of selling pressure, then review the chart below we come to a conclusion that a minor pullback of 2-5% is likely to take place in the next week ortwo.
The divergence in the Relative Strength Index is a bearish sign for the broad market. While I feel a pullback is do and needed for the market to regroup, it is important to review the seasonality chart and know that we are entering one the strongest times of the year for stocks.

SP500 Seasonality Chart

Again, using the data from the previous two charts along with this graph clearly shows that a pullback in the stocks is likely going to be bought back up by the brave investors willing to override their fear and go with the trend. For more interesting charts check out my stock chartlists:

The Wall Of Worry Conclusion:

In short, expect the stock market to correct in the next week or two. But once we get a correction of two percent or more, be prepared for buyers to step back in and buy things up into year end.
This WALL OF WORRY is about to GET HIGHER!
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How the Government Borrows Money

There’s been a lot of unnecessary political drama over the past few weeks, notably the big issues with the debt ceiling and government shutdown. This put many investors – including technical traders and analysts – on edge and on the sidelines.
But as I clearly stated in my last few letters – unless you’re an American government employee – none of this should’ve worried you; the markets would likely move higher:
“With the amount of money in deposits growing at the banks and being used as collateral for big stock market bets, the markets could continue to move higher this year.”
Of course, a U.S. default would’ve been disastrous; more so for what America represents, rather than the actual outcome of a short-term default. One default in a set of bonds doesn’t directly affect other bonds, but would cause lending rates to skyrocket. The domino effect of this would’ve been very bad. (more)

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Housing Market Update – Pulte Home’s Misleading Earnings – Short Homebuilders On Every Bounce / BY DAVE IN DENVER / FRIDAY, OCTOBER 25, 2013
The housing market bulls never cease to amaze me.  Pulte Homes pulled a brazen earnings management stunt in their Q3 earnings reported yesterday and now I’ve got some former Big-4 accounting firm audit geek harassing me about my interpretation of accounting guidlines.  It’s hilarious.  I couldn’t resist but point out that it’s the big accounting firms that tend to go under after they’ve been prosecuted and found guilty for aiding and abetting accounting fraud.  Anyone remember Enron?  That’s why what used to be the Big 8 is now the Big 4.  In order to prevent further embarrassment to the highly paid regulators who are supposed to oversee the accounting standards being applied, the FASB and the SEC just made the accounting rules and standards significantly more liberal and  more open for a very wide range of “opinion.”
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US Weekly Economic Calendar

time (et) report period Actual CONSENSUS
9:15 am Industrial production Sept.   0.4% 0.4%
9:15 am Capacity utilization Sept.   78.0% 77.8%
8:30 am Producer price index Sept.   0.3% 0.3%
8:30 am Core PPI Sept.   0.1% 0.0%
8:30 am Retail sales Sept.   0.0% 0.2%
8:30 am Retail sales ex-autos Sept.   0.4% 0.1%
9 am Case-Shiller home price index Aug.   -- 12.6% y-o-y
10 am Consumer confidence index Oct.   75.0 79.7
10 am Business inventories Aug.   0.4% 0.4%
8:15 am ADP employment Oct.   145,000 166,000
8:30 am Consumer price index Sept.   0.2% 0.1%
8:30 am Core CPI Sept.   0.2% 0.1%
2 pm FOMC statement        
8:30 am Weekly jobless claims 10/26
N/A 350,000
9:45 am Chicago PMI Oct.   54.5 55.7
Nonfarm payrolls report for Oct. will be released on Nov. 8
8:58 am Markit PMI Oct.   -- 52.8
10 am ISM Oct.   55.0% 56.2%
TBA Motor vehicle sales Oct.   15.4 mln 15.2 mln
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