Wednesday, December 4, 2013

Short Gold Until It Hits $1,000 Trader Says

In a year where stocks have soared and bonds have gone no where, the 30% year to date slump in gold (GLD) is that much more noticeable. Not only is it conspicuous, but it's also tempting many investors who feel that the metal's retreat is overdone.
And why not? It wasn't that long ago that gold was fetching almost $1900 an ounce. There's also the reality that, at some point, world markets will surely face turmoil again and trigger an inevitable flight to safety.
And yet, CME-based professional investor Bill Baruch of isn't buying any of it and currently sees nothing but downside for the currency of yore.
"We're looking at (gold) prices down to about $1,000 sometime next year," Baruch forecasts in the attached video, eschewing the aforementioned arguments that gold is ripe for a rebound. (more)

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Mickey Fulp’s Monthly Major Market Review

from Financial Survival Network
We connected with Mickey Fulp for his latest monthly take on the major markets. This time around, Mickey talked about:
Click Here to Listen to the Audio
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Rising Treasury Volatility Suggests Either Higher Rates “Or” Lower Stocks

The broad-based measure of Treasury bond volatility – MOVE – has broken higher, and, as BofAML’s MacNeil Curry notes, confirms a base and change in trend (to higher or more volatility). With the month of December traditionally a strong month for the MOVE Index and Treasury volatility in general, Curry warns there are two ways the volatility can move higher – either higher rates or lower equities.
Via BofAML,
We look for Treasury volatility to head higher to 81/87 and potentially beyond
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D.R. Horton, Inc. (NYSE: DHI)

D.R. Horton, Inc. operates as a homebuilding company. The company engages in the acquisition and development of land; and construction and sale of residential homes in 26 states and 77 markets in the United States primarily under the D.R. Horton, America's Builder name. It builds traditional single-family detached homes; and attached homes, such as town homes, duplexes, triplexes, and condominiums. The company markets and sells its homes primarily through independent real estate brokers. It is also involved in the origination and sale of mortgages, as well as provision of title insurance policies, and examination and closing services primarily to the purchasers of its homes. D.R. Horton, Inc. was founded in 1978 and is headquartered in Fort Worth, Texas.
To review Horton's stock, please take a look at the 1-year chart of DHI (D.R. Horton, Inc.) below with my added notations:
1-year chart of DHI (D.R. Horton, Inc.) DHI has been trading sideways for the last 2 months. Over that period of time, the stock has formed a clear resistance level at $20 (red). In addition, the stock has also created a strong level of support at $17.50 (blue) that has actually held since mid-August. This rectangle formation on DHI is very helpful in trading because at some point the stock will have to break one of the two levels the pattern has created.

The Tale of the Tape: DHI has clear levels of support ($17.50) and resistance ($20). The possible long positions on the stock would be either on a pullback to $17.50, or on a breakout above $20. The ideal short opportunity would be on a break below $17.50.
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Market Outlook: Stocks Shifting From Strength to Exhaustion?

After eight consecutive weeks of gains, it is time to consider when strength becomes exhaustion in the stock market.

Overbought Eventually Means Overbought
SPDR S&P 500 (NYSE: SPY) closed up 0.11% in a holiday-shortened trading week. This was the eighth time in a row SPY posted a weekly gain. It was also the smallest weekly gain in the winning streak and the second week in a row the rate of change has declined.

The concept of overbought is a challenging one, and traders have spent countless hours trying to understand it. Many indicators, such as stochastics and Relative Strength Index (RSI), are used to define an overbought market, but they all share a common flaw. At the beginning of a very strong up move, markets become overbought and stay overbought.

The chart below demonstrates the challenge of defining when a market is overbought. SPY is shown with the stochastics indicator. The monthly chart is used to decrease the sensitivity of the indicator, but similar patterns can be seen on weekly and daily charts.
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YY Inc., through its subsidiaries, operates an online social platform in the People's Republic of China. It provides YY Client, a personal computer based user software that offers real-time access to user-created online social activities groups. The company also offers Web-based YY that enables users to conduct real-time interactions on the Web without any downloads or installations; and Mobile YY, a smart phone application. In addition, it operates, a game media Website that provides information on online games and other resources for users and online game players. The company was founded in 2005 and is based in Guangzhou, the People's Republic of China.
To review YY's stock, please take a look at the 8-month chart of YY (YY, Inc.) below with my added notations:
8-month chart of YY (YY, Inc.) Notice the rising wedge I have outlined on the chart of YY. A rising wedge price pattern is essentially a type of triangle formation in which the stock (YY) has formed an up trending resistance line (red) and an up-trending support level (green). These two trend lines converging on one another combine to form a rising wedge, which is usually a terminal pattern. Confirmation of this pattern would occur if the stock broke the up-trending support, which appears to be at around $50.

The Tale of the Tape: YY has created a rising wedge pattern, which should lead to a break lower. A short trade could be entered on a break out of the bottom of the wedge, which currently sits near $50. If a trader believes the stock has higher prices in it's future, a long play could be made at that support with a stop placed below that level.
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5 Stocks to Buy and Hold ‘Forever’ : Diageo (NYSE: DEO), Unilever PLC (NYSE: UL), Heineken (OTCMKTS: HEINY), Realty Income (NYSE: O), Nestle (OTCMKTS: NSRGY)

Forever is a long time, particularly in the stock market.

The Wall Street Journal archives are full of stories of companies that were once the toast of the town… only to fall into irrelevance or bankruptcy.

Enron, Lehman Brothers, BlackBerry (Nasdaq: BBRY) and JC Penney (NYSE: JCP) are all fine examples of companies that were once leaders in their respective industries.

Enron and Lehman Brothers are long dead, and BlackBerry and JC Penney are currently fighting for their lives and may not survive 2014.  (more)

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