Friday, January 31, 2014

3 Penny Stocks to Watch in 2014: Cell Therapeutics Inc. (Nasdaq: CTIC), Chelsea Therapeutics International Ltd. (Nasdaq: CHTP), Hemispherix Biopharma Inc. (NYSE: HEB)

The biotech boom that began last year has triggered triple-digit gains in some of the market’s best penny stocks.

And some of our top penny stocks in biotech that we recommended last year gained as much as 440%, 231%, and 214%.

Better yet, the biotech sector is expected to keep surging — especially the sector’s best low-priced buys.

Keep in mind, investing in penny stocks isn’t for everyone, as they operate differently than the typical stock.

However, there are plenty of legitimate and lucrative penny stocks, if you know how to invest. The key is finding the promising ones and steering clear of the rest.  (more)

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Outerwall Inc (NASDAQ: OUTR)

Outerwall Inc., through its subsidiaries, provides automated retail solutions primarily in the United States, Canada, Puerto Rico, Ireland, and the United Kingdom. Its Redbox segment owns and operates approximately 43,700 self-service Redbox kiosks in 35,800 locations that enable consumers to rent or purchase movies and video games, as well as purchase event tickets. The company’s Coin segment owns and operates approximately 20,300 self-service coin-counting kiosks in 20,100 locations, which enable consumers to convert their coin to cash, a gift card, or an E-certificate. Its New Ventures segment focuses on identifying, evaluating, building, and developing innovative self-service concepts in the automated retail space, which includes coffee, refurbished electronics, and photo self-service concepts. The company’s kiosks are located primarily in supermarkets, drug stores, mass merchants, financial institutions, convenience stores, and restaurants. The company was formerly known as Coinstar, Inc. and changed its name to Outerwall Inc. in June 2013
Please take a look at the 1-year chart of OUTR (Outerwall, Inc.) below with my added notations:
1-year chart of OUTR (Outerwall, Inc.)
This stock is very simple. OUTR had held a very important level of support at $65 (blue) for the last 3 months, which was also a previous resistance. Regardless of what the market has or has not down over the last few months though, the stock had never broken the $65 level. Well, this past Friday OUTR broke below the $65 support and should be moving overall lower from here.

The Tale of the Tape: OUTR had a key level of support at $65. Now that the stock has broken support, a trader might want to enter a short trade at or near the $65 level with a stop placed above that level. A break back above $65 would negate the forecast for a move lower.
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McAlvany Weekly Commentary

Bank to Depositor: It’s Not Your Money!

About this week’s show:
-Bernanke to Yellen:”Good night and good luck”
-Emerging Market Chaos
-Currency Crises: Replay 2008?
Read | Subscribe@iTunes
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Chart of the Day - Illumina (ILMN)

The Chart of the Day is Illumina (ILMN).  I found the stock by sorting the All Time High list for frequency in the last month then used the Flipchart feature to find the best chart.  Since the Trend Spotter signaled a buy on 10/22 the stock soared 62.88%.

ILMN is a developer of next-generation tools for the large-scale analysis of genetic variation and function. The company's tools will provide information that could be used to improve drugs and therapies, customize diagnoses and treatment, and cure disease. The company is developing a comprehensive line of products that can address the scale of experimentation and the breadth of functional analysis required to achieve the goals of molecular medicine.

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3 Income Plays for Mexico’s Energy Boom: Diamond Offshore Drilling (NYSE: DO), Chesapeake Energy (NYSE: CHK), Energy Transfer Partners LP (NYSE: ETP)

Last week in Income & Prosperity, I presented a thesis for investing in Mexico’s energy market.

My thesis was predicated on the fact you CAN invest in Mexico’s energy market, which for 75 years was closed to foreigners.

Details regarding the Mexican energy reform still need to be hashed out, such as which regions will be available for development and how the contract and licensing procedures will work.

Nevertheless, it’s possible to intelligently game where foreign business will first arise and which U.S. energy companies stand to benefit.  (more)

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Thursday, January 30, 2014

The Dow’s 5-year rhyme

I have to say, given the exhausted consumer and weak global demand, I was skeptical that the traders and churners could keep a sick dog hunting for 5 full years this cycle…but congrats to them are in order I guess. On the other hand, it just means world markets are back teetering in a hellish state of over-valuation for the third time in the past 15 years. The more they over-lever, the more painful the payback every time. Of course, the long-always insist the down cycles are completely random and unforeseeable, so they will never admit the symmetry in human behavior driving these cycles…
Dow's 5 year rhyme
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Art Cashin – Fed Taper & Markets Turning Hyper-Volatile / January 29, 2014
Today KWN is pleased to share an important piece from 50-year veteran Art Cashin, who is Director of Floor Operations at UBS ($650 billion under management).  Cashin discusses the Fed decision and why the markets may turn “hyper-volatile.”  This is an extremely important piece that includes a fascinating guest commentary on the turmoil taking place overseas.
By Art Cashin Director of Floor Operations at UBS 
January 29 (King World News) – “On this day (+1) in 1876, an already legendary medical professor at Edinburgh University began to address a new group of students.  He began his lecture with his usual demand for observation.  He pounded on his theme of the “vast importance of little distinctions” of the “endless significance of trifles.”  “Yeah, yeah!” thought the students (or whatever the 1870′s equivalent of a cynical “yeah, yeah” was).  Sure you’re a famous surgeon and professor but what will all this minutia get us.
He called for the first patient.  Then, according to published reports, the following happened -
A man walked in and stood for a moment.  The professor walked around him slowly, twice.  Then the professor said something like – “Army…recently discharged….probably Scots Highland regiment.  (“Aye! Sir!” came the reply).  Next – you were likely a non-commissioned officer…likely in the West Indies - perhaps Barbados.”
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Marc Faber Warns "Insiders Are Selling Like Crazy... Short US Stocks, Buy Treasuries & Gold"

Beginning by disavowing Mario Gabelli of any belief that rising stock prices help 'most' people ("Fed data suggests half the US population has seen a 40% drop in wealth since 2007"), Marc Faber discusses his increasingly imminent fears of the markets in this recent Barron's interview.
Quoting Hussman as a caveat, "The problem with bubbles is that they force one to decide whether to look like an idiot before the peak, or an idiot after the peak. There's no calling the top," Faber warns there are a lot of questions about the quality of earnings (from buybacks to unfunded pensions) but "statistics show that company insiders are selling their shares like crazy."
His first recommendation - short the Russell 2000, buy 10-year US Treasuries ("there will be no magnificent US recovery"), and miners and adds "own physical gold because the old system will implode. Those who own paper assets are doomed."  (more)

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Pitney Bowes Inc. (NYSE: PBI)

Pitney Bowes, Inc. provides software, hardware, and services to enable physical and digital communications in the United States and internationally. It also offers a suite of equipment, supplies, software, services, and solutions for managing and integrating physical and digital communication channels.
The company’s Small & Medium Business Solutions segment engages in the sale, rental, and financing of mail finishing, mail creation, and shipping equipment and software; provision of supply, support, and other professional services; and provision of payment solutions. Its Enterprise Business Solutions segment sells, supports, and offers other professional services of high-speed, production mail systems, and sorting and production print equipment; and sells support services for non-equipment-based mailing, customer relationship and communication, and location intelligence software. Pitney Bowes Inc. markets its products through its sales force, direct mailings, outbound telemarketing, independent distributors, and the Internet to various businesses, governmental, institutional, and other organizations.
To review potential trading opportunities with Pitney’s stock, please take a look at the 1-year chart of PBI (Pitney Bowes, Inc.) below with my added notations:
1-year chart of PBI (Pitney Bowes, Inc.)
From a technical perspective, there’s a whole lot going on with PBI. First, the stock has formed a definite resistance at $24 (red). After doing so, the stock broke its 6-month trend line of support. Now it appears that PBI may have formed a double top price pattern over the last 3 months.
Double tops are reversal patterns and are as simple as they sound: Rallying up to a point (T), selling off to a support, and then rallying back up again to approximately the same top (T). As with any price pattern, a confirmation of the pattern is needed. PBI would confirm its pattern by breaking below the $21 support (blue) area that has been created by the double top pattern.

The Tale of the Tape: PBI may have double topped. A long trade could be made at $21 or on a move above $24 (resistance). A short trade could be made on a support break of $21, which would confirm the double top pattern.
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General Electric (NYSE: GE) Rebound Could Make Traders 67% Profits

It hasn't been a very happy new year for the bulls so far. The broad market S&P 500 index came within a point of its all-time high before the slide began. And the blue-chip Dow Jones Industrial Average was hit hard last week, down 3.5% for the worst weekly performance in years.
Only three of the Dow 30 components show a gain in 2014, and the index is off 4% year to date. The worst Dow performer has been General Electric (NYSE: GE), which is down almost 10% for the year.
Dow vs GE Stock Chart
The risk/reward favors the bulls at these levels. A third of the Dow and a quarter of the S&P 500 companies will release earnings this week, which should help put the fundamentals in perspective.
In the past four and a half years, every pullback in GE has recovered to make new highs. And the stock has support at $25 to lean on. (more)

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Wednesday, January 29, 2014

3D Systems Corporation (NYSE: DDD)

3D Systems Corporation, through its subsidiaries, develops, manufactures and markets 3D printers, print materials, on-demand custom parts services, and 3D authoring solutions for professionals and consumers. The company’s primary print engines comprise stereolithography, selective laser sintering, multi-jet modeling, film transfer imaging, selective laser melting, and plastic jet printers, as well as ZPrinters.
Its 3D printers convert data input from computer aided design (CAD) software or 3D scanning and sculpting devices to produce physical objects from engineered plastic, metal, and composite print materials. The company also provides its customers with 3D authoring tools for digital imaging and design; blends, markets, sells, and distributes various consumables, engineered plastics, nylon and metal materials, and composites; and offers various software tools, as well as pre-sale and post-sale services, including applications development, installation, warranty, and maintenance.
Please take a look at the 1-year chart of DDD (3D Systems Corporation) below with my added notations:
1-year chart of DDD (3D Systems Corporation)
After finally breaking through the $50 level at the end of August, DDD almost doubled to $98 in January. Since then, the stock has pulled back to support at $85, which was also the November high. A break below $85 will most likely lead to significantly more selling, while if that level holds, the stock should run to new 52-week highs.
The Tale of the Tape: DDD has a key level of support at $85. A long trade could be made at that level with a stop placed below. However, if the stock were to break that level traders might want to look to get short on the stock.
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China’s Households “Massively” Exposed To Housing Bubble “That Has To Burst” / by Tyler Durden on 01/28/2014 14:51 -0500
The topic of China’s real estate bubble, its ghost cities, and its emerging middle class - who now have enough money to invest and have piled into houses not stocks – and have been dubbed “fang nu” or housing slaves (a reference to the lifetime of work needed to pay off their debts); is not a new one here but, as Bloomberg reports, the latest report from economist Gan Li shows China’s households are massively exposed to an oversupplied property market.
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Chart of the Day - Autozone (AZO)

The Chart of the Day is Autozone (AZO).  Believe it or not there were a few stocks that hit all time highs today.  I found the stock by sorting the All Time High List for frequency in the last month and AZO was right at the top of the list.  In fact since the Trend Spotter signaled a buy on 10/17 the stock is up 17.35%.

Autozone is a specialty retailer of automotive parts and accessories, primarily focusing on do-it-yourself customers. Each of the company's auto parts stores carries an extensive product line for cars, vans and light trucks, including new and re-manufactured automotive hard parts, maintenance items, and accessories. Many of the company's domestic auto parts stores also has a commercial sales program, which provides commercial credit and prompt delivery of parts and other products to local repair garages, dealers and service stations.

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Mark Mobius: Emerging Market Turmoil Will Be 'Temporary'

The chaos striking emerging markets, with currencies and asset markets plummeting, won't last, says Mark Mobius, executive chairman of Templeton Emerging Markets Group.

The Turkish lira hit a record low Monday, the South African rand touched a five-year nadir and the Argentine peso registered its biggest daily drop in a decade last week.

"There is a generalization you can make," Mobius tells CNBC. "Those countries that are having balance of payment difficulties are the ones being targeted with the currencies."
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The $3 Way To Play Silver — Hecla Mining Co.

The silver market is primed for a breakout move. And as you’ll see, there’s a $3 way to play it. Last year we saw a general downtrend in precious metal prices. From a high last January around $32 an ounce, the price of silver marked a downward trail to its current perch at $20/oz.
That’s the bad news.
The good news is that over the past two months the price of silver has formed a solid base. Said another way, silver’s chart is consolidating for a potential move to the upside…
Call it what you will — an ascending triangle, consolidation, coiling or sideways trade – but the recent trend for silver is the most positive action we’ve seen in months. From where I stand the price has formed a substantial base around $20 — which makes for a great upside opportunity.  (more)

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Tuesday, January 28, 2014

Alternative Nat Gas Fund Could Surge 15% by Winter's End

I live on the West Coast, and the weather here is warm, unseasonably warm, in fact. Now, I admit that sometimes I like to rub in my good fortune to my friends, family and colleagues in the Midwest and on the East Coast.
Much as I am fond of jesting about the 80-degree sunny days here of late, the weather situation in much of the country is no laughing matter. In fact, Mother Nature has been downright cruel this year, with the "polar vortex" and sub-zero temperatures making life miserable for millions of Americans.
While there's not much anyone can do about the cold-hearted vixen's actions, traders could take some solace in making a few extra bucks trading one sector that benefits from this big chill -- natural gas.
Since November, the metrics in the natural gas space have been firmly in the bulls' favor. The chart of the United States Natural Gas Fund (NYSE: UNG) shows the big spike higher in the commodity that began in early November and sent UNG well above both the 50-day and 200-day moving averages.
UNG Chart
In Friday trade, UNG surged more than 8%, making a 52-week high, as natural gas futures broke to a three-and-a-half year high, topping $5 for the first time since 2010.  (more)
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Emerging Market Mess Won't Upset US Stocks

The emerging market turmoil that pushed U.S. stocks down last week is unlikely to have a lasting impact, says stock market guru Jeremy Siegel, professor of finance at the University of Pennsylvania's Wharton School.

Emerging market stocks and currencies dropped early Monday, but the carnage eased after Turkey's central bank announced a special interest rate meeting for Tuesday, which lifted the lira higher.

As for U.S. stocks, Siegel says he's not a perma-bull. "There have been times I felt we were way overpriced," he told CNBC. But for now, "I still think we're slightly under fair market value."  (more)

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Margin Debt Soars To Record High; Investor Net Worth Now Doubly Negative From 2007 Bubble Peak

That margin debt just soared to new all time highs in december should come as no surprise to anyone. However what may come as a shock to many is that the other key metric provided by the NYSE - total net free credit - also known as investor net worth (calculated as Free Credit Cash plus Credit Balances in Margin Accounts less Margin Debt) just dropped to a whopping $148 billion, double where it was in February 2013, and double where it was during the peak of the last stock (and credit and housing) bubble, when it rose to a then-all time high of $79 billion in June 2007. It was all downhill from there. (more)

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Ann Inc (NYSE: ANN)

ANN Inc., through its subsidiaries, engages in the retailing of women’s apparel, shoes, and accessories under the Ann Taylor and LOFT brands. As of August 3, 2013, it operated 1,007 stores comprising 275 Ann Taylor stores, 105 Ann Taylor Factory stores, 525 LOFT stores, and 102 LOFT Outlet stores in 47 states, the District of Columbia, Puerto Rico, and Canada. The company also sells its products through operating and, as well as through phone. The company was formerly known as AnnTaylor Stores Corporation and changed its name to ANN Inc. in March 2011. ANN Inc. was founded in 1954 and is headquartered in New York, New York.
To review ANN’s stock, please take a look at the 1-year chart of ANN (ANN, Inc.) below with my added notations:
1-year chart of ANN (ANN, Inc.)
Over the last year ANN has consistently moved higher. Since May the stock has formed a trend line of support (blue) that it has been bouncing on top of. Always remember that any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. ANN’s trend line seems to be important now that it has been tested 4 times dating back to May.

The Tale of the Tape: ANN has created a trend line of support over the last 8 months. A long position could be entered on a pullback to that trend line, which is currently sitting right under 35, with a stop placed below that level. A short position could be entered if ANN were to break the trend line support.
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This Will Create A Massive Spike In The Price Of Gold / January 27, 2014
A 42-year market veteran who predicted the recent spike in gold ahead of time spoke with King World News about the a catalyst that is going to create a massive spike in the price of gold.  John Hathaway, who is one of the most respected institutional minds in the world today when it comes to gold, and whose fund was awarded a coveted 5-star rating, also included a fantastic chart.
Eric King:  “John, I know you’ve seen the chart that shows the expansion of paper claims vs available physical gold.  Just when you think chart can’t go any more parabolic, it does.  It has now hit a staggering 112 to 1.  When does that matter, John?”
Hathaway:  “It doesn’t matter until it does matter.  Look, these bullion banks are extending credit to trading entities — probably high-frequency traders, hedge funds, and the other usual suspects — that don’t have any physical gold at all….
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3 Niche ETFs That Will Keep Flying: GURU, PSP, NFO

The ETF industry continues to grow in size and importance. 2013 was another spectacular year for the industry with inflows exceeding $190 billion. 159 new products were launched last year, taking the total number of products to 1551, while assets under management have surged to $1.71 trillion.

While large, plain vanilla market cap weighted ETFs tracking the broader market or popular segments continue to be very popular with investors, there are some smaller but excellent ETFs that focus on certain 'niche' corners of the market. These ETFs provide access to some specialized strategies that are otherwise unavailable to retail investors.

Below we highlight three ‘niche’ ETFs that had a strong performance last year and look poised to outperform this year as well. (more)

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Monday, January 27, 2014

Buy the Miners Not the Gold

After turning in its first losing year in 2013 in a long time, many have been wondering where gold’s bottom might be as MoneyShow’s Tom Aspray takes a technical look to determine whether or not now is a good time to buy.
The series of earning’s hits and misses has captured the focus of investors as has the continuing divergence between the Dow Industrials and the Nasdaq 100. The SPDR Dow Jones Industrials (DIA) is down 0.3%, so far this week, while the PowerShares QQQ Trust (QQQ) is up just over 1%.
These divergences are also evident in the market internals as while the NYSE Advance/Decline and Nasdaq Advance/Decline lines have made further new highs, the Dow A/D line has not. The volume analysis of the leading indices also looks strong and together they favor an eventual upside resolution of the trading ranges.
Following the miserable 2013 performance of gold and the gold miners, their recent gains have gotten a bit more attention, but most investors have been burnt by gold’s drop in the last quarter of 2013 as forecasted in early November’s Gold: Bull Trap Ready to Close as the volume analysis led prices lower.  (more)

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TDI Podcast: Larry Williams, Emerging Markets and Dolphin Fans (#348)

January 26, 2014 3:44 pm
Larry Williams is our guest in this episode and he is one great expert on the areas of markets. We talk about futures trading, commitment of traders reports and his outlook for the short- and long-term for markets.
We also dig into the situation in the emerging markets and the trouble it could have for global markets.
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Illinois Tool Works Inc. (NYSE: ITW)

Illinois Tool Works Inc. manufactures and sells a range of industrial products and equipment worldwide. Its Transportation segment offers plastic and metal components, fasteners, and assemblies; fluids and polymers; fillers and putties; polyester coatings, and patch and repair products; and truck remanufacturing, and related parts and services.
The company’s Power Systems & Electronics segment provides arc welding equipment; metal arc welding consumables and related accessories; metal solder materials; equipment and services for microelectronics assembly; electronic components and component packaging; static and contamination control equipment; airport ground support equipment; pressure sensitive adhesives and components; and metal jacketing and other insulation products.
Its Industrial Packaging segment offers steel and plastic strapping and related tools and equipment; plastic stretch film and related equipment; and paper and plastic products that protect goods in transit.
The company’s Food Equipment segment provides warewashing, cooking, refrigeration, and food processing equipment; and kitchen exhaust, ventilation, and pollution control systems; and food equipment maintenance and repair services.
Its Construction Products segment offers anchors, fasteners, and related tools; metal plate truss components, and related equipment and software; and packaged hardware and other products for retail. The company’s Polymers & Fluids segment provides adhesives; chemical fluids; epoxy and resin-based coating products; and hand wipes and cleaners.
Please take a look at the 1 yr. chart of ITW (Illinois Tool Works, Inc) that I have shown below with my added notations:
1 yr. chart of ITW (Illinois Tool Works, Inc)
ITW has formed a very nicely defined up-channel over the last (5) months. A channel is simply formed through the combination of a trend line support that runs parallel to a trend line resistance. When it comes to a channel any (3) points can start the channel, but it’s the 4th test and beyond that confirm it. You can see that ITW has multiple test points between the channel resistance (red) and the channel support (blue). Following the ITW channel can provide you with both long and short trading opportunities.

The Tale of the Tape: ITW has formed a common chart pattern known as a channel, in this case, an up-channel. A long opportunity could be entered on a pullback to the channel support, which is currently sitting near $81. Short trades could be entered at channel resistance OR if ITW were to break below the channel support.
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Dividend Power: Investing for Generations

With the Fed continuing to keep interest rates near zero, I think Wall Street's upward path will continue, at least, most of the way through 2014, forecasts Jim Powell, editor of Global Changes & Opportunities.

However, I think we will see more price swings than we did last year. Alas, the screaming bargains we enjoyed over the previous two years are largely gone. And a correction is also long overdue.

Fortunately, you don't need ultra-low prices to become a big winner with dividend stocks. Unlike the fixed interest rates paid on bonds, top companies usually increase their dividends from year to year.

As the payouts increase, so does the effective yield on the money that was invested. It's very sweet. Two examples show how rewarding dividend growth can be.

The current yields for Wal-Mart (WMT) and Target (TGT) are 2.30% and 2.70% respectively. Those returns are respectable, but are nothing to get excited about.

However, Wal-Mart's dividend per share has increased at a 16% annual rate since 2004.

Target's has increased 17.6%. After ten years at those rates, the effective yields on today's cost for the stocks (often called yield on cost) would be a very impressive 8.75% and 11.62% respectively.  (more)
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A "no-brainer" way to make 100%-plus on an unstoppable trend

After the recent 30%-plus fall in electronics retailer Best Buy, we wanted to make sure all Crux readers see this recent piece from our colleague, Frank Curzio. Read on for the details…

From Frank Curzio, editor, Small Stock Specialist:

[Two weeks ago], I attended one of the biggest events in the tech world – the Consumer Electronics Show (CES).

CES is one of the largest consumer-electronics and technology conferences on the planet. Over 155,000 people were expected to fill the more-than two-million-square-foot venue in Las Vegas this year to check out the latest innovations and gadgets from more than 3,000 exhibitors.

I saw headbands that measure brain activity... I saw a band playing live music from instruments made by 3D printing (the printing of solid objects like toys, tools, furniture, machine parts, and even guns)... And I saw a kitchen and living room where everything – appliances, sound systems, door locks, and lights – was controlled by a mobile phone.
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Weekly US Economic Calendar

time (et) report period Actual CONSENSUS
10 am New home sales Dec.   455,000 464,000
8:30 am Durable good orders Dec.   1.8% 3.4%
9 am Case-Shiller home prices Nov.   -- 13.6% y-o-y
10 am Consumer confidence index Jan.   77.6 78.1
2 pm FOMC statement     -$10 bln -$10 bln
8:30 am Weekly jobless claims 1/25
325,000 326,000
8:30 am GDP 4Q   3.3% 4.1%
10 am Pending home sales Dec.   -- 0.2%
8:30 am Employment cost index 1Q   0.4% 0.4%
8:30 am Personal income Dec.   0.2% 0.2%
8:30 am Consumer spending Dec.   0.2% 0.5%
9:45 am Chicago PMI Jan.   60.0 60.8
9:55 am UMich consumer sentiment index Jan.   81.0 80.4
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Saturday, January 25, 2014

Bank of America Head Technician: “Our Bullish View Is Invalidated, Going Neutral; Below 1806 Spells Trouble” / by Tyler Durden / 01/24/2014 10:42 -0500
Yesterday’s BofA’s MacNeill Curry warned that once above $1270, gold becomes “explosive” as the squeeze trap slams shut, which explains why the shorts are desperately defending the critical resistance redline. Today, the chief technician of Bank of Countrywide Lynch looks at the two other key correlation pairs: the S&P500 (via the Emini ESH4) and the USDJPY, which by virtue of being the key funding pair determines the price of risk in virtually every corner of the globe. He is not too happy with what he sees.
Here are his thoughts:
On the S&P500: ESH4: From Bullish To Neutral
Anxiety across markets has reached a n/term extreme. The trends of the past few days/weeks are set to correct, but not turn…  The break of 1809.50 has invalidated our bullish view, but we ARE NOT BEARISH, JUST NEUTRAL. Going forward, we expect an 1805.75/1846.50 range trade before an eventual resumption of the larger bull trend. Below 1805.75 spells trouble, but bears only gain control on a close below 1767.75. See the chart for equivalent cash levels.
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Will These 3 Laggard Stocks Outperform In 2014?

The best performing stocks in the S&P 500 in the past year have been Netflix, Micron Technology, Best Buy, Delta Airlines and Constellation Brands.
The interesting thing about these stocks is that as investors came into the year, they were not on anyone’s list of top performers or even likely winners. Most of them were on the worst performing list for 2012 and with the exception of Netflix, there was very little market buzz or chatter about any of these stocks.
The rest of the top ten performers include names like Pitney Bowes and Boston Scientific, whose very existence was being questioned by many as 2013 began.
It would just seem to make sense to take a look at those stocks in the index that have lagged the recent rallies and may be poised for a strong recovery over the next 12 months. When looking at the index stocks, it becomes clear that if you dig stuff out of the ground, your stock has not done very well in the past year. Miners of all types of metal and coal have done very poorly as have many energy companies that drill for oil and gas.
The worst performing stock over the past 52 weeks has been Newmont Mining (NYSE: NEM).
The company is one of the world’s largest producers of gold and also has copper mining operations around the world. The company has operations in the United States, Australia, Peru, Indonesia, Ghana, Bolivia, New Zealand and Mexico as well as development projects in West Africa. The stock has fallen by 46 percent in the past year as gold has lost some of its luster with investors.
The stock is now trading right at tangible book value, something that has not happened in the last decade or so. At this level, the shares have become fairly cheap and any positive developments in gold markets could send the share shooting higher over the next year.
Cliffs Natural Resources (NYSE: CLF) is the second worst performer of the year with the stock down 38 percent.
The stock is certainly cheap, trading at just 60 percent of its tangible book value. The concern here is that the global iron ore market is suffering from oversupply and it is simply going to take some time for the weak global recovery to work off the excess. If the market for iron ore and metallurgical coal should firm quicker than analysts expect, then this stock could be a top performer in 2104.
Long term investors should note that the recovery prospects for this stock over the next five years are extraordinary. Excess supply in the market is going to eventually lead to a decline in capacity, as smaller and marginal mining facilities are unable to stay in business.
Peabody Energy (NYSE: BTU) is the world’s largest publicly traded coal company and has been hurt by the secular decline in US coal usage.
What investors may be overlooking is that coal demand globally is increasing and the company is well positioned to serve the export markets. The Australian operations in particular are in a good position to serve what will be fast growing demand from Asian and emerging market economies that do not have the hostile political and regulatory issues that coal face in the United States.
The company trades at 1.1x book value and with the exception of a decline below book value for a brief period last year, this is the lowest multiple of asset value the shares have reached in the last decade. Earnings could rebound sharply next year and turn this losing laggard stock into a market leader. As with Cliffs, the long term recovery possibilities in Peabody Energy shares are exceptional.
It was the poet Horace who observed, “Many shall be restored that now are fallen and many shall fall that now are in honor.” Nowhere is this more true than in the stock market, which why Ben Graham had it as the prescript for Security Analysis.
The list of top performers may be more exciting, but the list of worst performing stock may be a more profitable hunting ground for investors.
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One of the Biggest Bull Markets You May Ever See

Last month, we showed you the big boom in biotech...
Remember, biotech is one of the greatest "boom and bust" sectors known to man.
Since 1983, the sector has seen four triple-digit runs... and one quadruple-digit run of 1,347% in the early 1990s. The busts were equally spectacular, taking the entire sector down by as much as 70%.
After the most recent bust in 2009, the Nasdaq Biotech Index started a huge rally... The index is up 250% in five years. And it was the top-performing sector in 2013.
biotech stocks 5-year chart
Despite the big run higher, we argued that there would be more gains ahead...(more)
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Maguire – “Stunning” Physical Gold Buying Terrifies Shorts

from King World News
Today London metals trader Andrew Maguire told King World News that the physical gold buying which took place in London on Thursday can only be described as “stunning.” He also said this terrified the shorts and created the panic spike in gold that shocked many market participants that day. Maguire also described what is happening the scenes in the war on gold, and with gold demand in his remarkable interview below.
Maguire: “Just like last week, this week was all about the funds trying to protect large naked short positions. They were trying to paint the gold price under the 50-day and the 10-day moving averages. This is a perfect example of how this paper-centric hot money is totally out of touch with the global bullion markets….
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The Junior Resource Sector – Brent Cook Interview (Podcast Ep. 9)

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World Class Investors Panel: Frank Giustra, Rick Rule & Frank Holmes

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JPMorgan's Gold Vault Has Biggest One-Day Withdrawal Ever

Curious why over the past few months JPM has quietly been accumulating a substantial amount of eligible physical gold (even as its registered gold inventory is the lowest it has ever been at just 87K ounces since December 13, 2013 when 147K ounces of gold was withdrawn - keep that date in mind for a few minutes)? This may have something to do with it: moments ago the daily Comex gold vault report confirmed what many expected, namely that the JPM accumulation was merely in advance anticipation of major withdrawals. How major? Well, on January 23, JPM saw 321,500 ounces of gold depart in one day. This was tied for the single biggest daily withdrawal in history!The last time JPM had an identically sized withdrawal? December 13.... 2012.

Something tells us the next few days will see matching withdrwawals from JPM's gold vault, which at last check was officially owned by the Chinese.
And for those wondering how JPM's total gold holdings look over time here it is:

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Friday, January 24, 2014

SolarWinds Inc (NYSE: SWI)

SolarWinds, Inc. designs, develops, markets, sells, and supports enterprise-class information technology (IT) and infrastructure management software to IT professionals in various organizations worldwide. The company offers enterprise-class network management products, including SolarWinds Network Performance Monitor that monitors and analyzes network performance metrics for routers, switches, servers, and other simple network management protocol enabled devices; additional network management products for various network management issues; and SolarWinds Log and Event Manager, a server-based product that automates the collection and interpretation of logs from various sources.
Please take a look at the 1-year chart of SWI (SolarWinds, Inc.) below with my added notations:
1-year chart of SWI (SolarWinds, Inc.)
SWI appears to have been forming a base over the last several months. A couple of times over that period the stock hit a key resistance level at around $40 (blue). Earlier this week SWI finally broke up out of its base and above that important $40 level. The stock should be moving overall higher from here, and so far seems to have resisted the general $42.50 area as expected.

The Tale of the Tape: SWI had a key level of resistance at $40 that should now act as support on any pullbacks. A long trade could be entered on a pullback to $40 with a stop placed below that level. A break back below $40 could negate the forecast for a move higher.
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Should this Trendline in the Dow Matter?

A funny thing happened at the end of last year. As the Dow Jones Industrial Average rallied through the holidays, some really long-term trendlines started coming into play. The strength we’ve seen in US Stocks is undeniable. So that’s where the question stems from: Should we care about this trendline in the Dow? Or ignore it?
Today we’re looking at a monthly bar chart of the Dow Jones Industrial Average. By connecting the peaks from the January 2000 highs and October 2007 highs, you can extend that trendline to where we peaked on December 31st:
1-21-13 DJIA
So should we care? Is that reason enough to sell? Or even to sell short? Do we wait for the 2009 uptrend line to break in order to get more pessimistic?
I don’t have a clear answer to this. So I look at other averages like the Nasdaq100 and Russell2000 and they’re making new all-time highs. So what’s up with the Dow? For the most part, these guys all trade together, and any short-term divergences usually even themselves out over time. So who’s right? Nasdaq and Russell or papa Dow?
Do you guys use trendlines to connect peaks in uptrends, not just the troughs?1-21-13 trendline connecting peaksPersonally, I do use trendlines to connect peaks in uptrends. And I take them more seriously than connecting troughs in downtrends. That can be a death sentence depending on the name (i.e $BSC $LEH etc). If something is crashing that bad, you are taking serious overnight gap risk, and that’s too much for me. Peaks in uptrends are a different story.
So me? Yes I think this trendline matters.
Do you?
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3 Stocks Insiders Are Buying Now

Wise investors covet “insider stocks” because they realize something very important.

It’s something mutual fund legend Peter Lynch once described very succinctly: “There are many reasons why insiders sell, but only one reason insiders buy.”

That reason being, of course, that insiders know something about their company that they are certain will drive the stock price higher.

And research bears this out.

According to Nejat Seyhun, a professor and researcher in the field of insider trading at the University of Michigan, whenever you have insider buying, the stock tends to outperform the total market by 8.9% over the next 12 months.  (more)

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Market Divergence is Bizarre: Gartman

CNBC’s Bob Pisani and Dennis Gartman, The Gartman Letter Founder, editor & publisher, discuss the recent divergence between the major indices and the weakness in China.
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McAlvany Weekly Commentary

3 Canaries in a Coal Mine: Watch Them Closely!

About this week’s show:
-Real estate: Buy, sell or hold?
-Climbing interest rates could kill real estate recovery
-Loonie, Aussie and Dr. Copper are critical tell-tails
Read | Subscribe@iTunes
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Krispy Kreme Doughnuts (NYSE: KKD)

Krispy Kreme Doughnuts, Inc., together with its subsidiaries, operates as a branded retailer and wholesaler of doughnuts, beverages, and treats and packaged sweets worldwide. It owns and franchises Krispy Kreme stores. As of December 12, 2013, the company operated approximately 810 stores worldwide. It also produces doughnut mixes and doughnut-making equipment. The company was founded in 1937 and is headquartered in Winston-Salem, North Carolina.
Please take a look at the 1-year chart of KKD (Krispy Kreme Doughnuts, Inc.) below with my added notations:
1-year chart of KKD (Krispy Kreme Doughnuts, Inc.)
Other than a slight setback at the end of August, KKD had been flying high for most of last year. However, the stock had an even larger setback at the beginning of December.
A level that seems to stand out on the stock during the last eight months is $18 (blue). You can see how $18 has been both support and resistance since the end of May. In addition, the stock has also hit $20 as resistance on multiple occasions (red).

The Tale of the Tape: KKD is stuck between key levels of $18 and $20. Traders could enter a long trade at $18, or on a break above $20. A short trade could be made on a break below $18 or on a rally up to $20.
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Thursday, January 23, 2014

If you're bullish on biotech, you should see this list

2013 was a banner year for the life sciences sector, with biotech, pharmaceutical, and medtech companies buoyed by advances in therapeutic techniques, a friendly regulatory environment, lucrative partnerships and the overall market upswing.

The 2013 Biotech Watchlist reflected this robustness, boasting a year-to-date return that blew past those posted by the major indices. Credit the basket of stocks picked by industry experts, weighted heavily with winners.

Can our panel of experts pick another winning portfolio in 2014? Find out which companies they've chosen for the 2014 Watchlist in this exclusive from The Life Sciences Report (more)

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Investing in Real Estate

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Liquidity Services (NASDAQ: LQDT) Stock is Poised for a 40% Rebound (NASDAQ: AMZN) makes it look easy. The e-commerce titan has just wrapped up its 15th straight year of at least 20% revenue growth, which is harder than it sounds when you consider its revenue base now stands at $75 billion.
If only all other kinds of e-commerce businesses were so easy to build. Other firms, while clearly benefiting from the long-term growth in the frictionless world of online commerce, are still suffering from growing pains.
Case in point: Liquidity Services (NASDAQ: LQDT), which helps businesses buy and sell surplus equipment through online exchanges. The company had a tremendous growth spurt, boosting sales from $219 million in fiscal 2009 (ended in September) to $475 million by fiscal 2012. Yet sales growth slowed to 6% in fiscal 2013, and analysts don't see much growth in the current fiscal year, sending this stock into a deep funk.
LQDT Stock Chart
With shares now trading for one-third of the price they fetched in 2012, contrarian investors have started to give this e-commerce play a second look. Though LQDT is unlikely to revisit the $65 mark any time soon, a move back to $30 or even $35 looks quite feasible as the company starts to snag new customers.  (more)
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Facebook to lose 80% of its users by 2017 : FB, TWTR

The Facebook generation may be about to come to an end if Princeton University researchers are correct. A new study predicts “a rapid decline in Facebook activity in the next few years.” The study, conducted by two researchers in Princeton’s Department of Mechanical and Aerospace Engineering, applies the same model used in the study of disease to extrapolate future adoption and abandonment of social networks.

In the case of Facebook (FB), the researchers used MySpace as a case study for a social network whose use spread rapidly, like a disease, and then quickly died out when the number of new users declined. The study finds that Facebook is “just beginning to show the onset of an abandonment phase.” The researchers believe that abandonment will accelerate to the point that Facebook could lose 80% of its users between 2015 and 2017. 
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Oil Set to Rocket

Some of us stopped believing in fairytales long ago and then there were those that never thought that Goldilocks ate anybody’s porridge. So, there are two types of believers. Those that did and now don’t anymore because they have grown up and those that never ever did have the wool pulled over their eyes. It’s the same with the economy these days. Either you believed that it was getting better and listened to the propaganda emanating from the once-hallowed portals of the statist politik bureau of the government or you never believed a word of what got spun by the spinners and the media-controlling decision-makers that are there to eat your porridge and sit in your chairs (even lie in your beds). The latter have always thought it was all just a load of old Tom Cobbley from the start.
So is the economy getting better or is it a fairytale dream?
Who knows the answer to that question today? Well, if we believe the International Energy Agency (IEA), then the economy is getting better around the world since oil consumption is increasing. It has been forecast to increase and will outstrip even shale oil production which is most certainly taking off in the USA today and is set to do the same elsewhere (in the UK, for example). Whether we believe the IEA is another matter entirely, but it is the organization that advises the largest energy-consuming countries in the world on their policies regarding energy consumption and production.  (more)

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A Dozen Gold, Copper, Phosphate and Uranium Standouts

The Gold Report

Amanda Van Dyke of Palisade Capital is confident that China’s reforms will ensure that the commodity supercycle will continue for some time to come. In this interview with The Mining Report, Van Dyke argues that investors should worry less about the right balance of specific commodities and more about the right mix of early-stage, development-stage and producing companies. She expands on a dozen she believes have the right stuff to succeed.
The Mining Report: In December Federal Reserve Chairman Ben Bernanke announced a $10 million ($10M) cut in monthly quantitative easing (QE). He also said that interest rates would remain at zero for the foreseeable future. What effects will these decisions have on the economy and on precious metals?
Amanda Van Dyke: Precious metals have been trending down for a number of reasons. One was the perception, starting about March 2013, that the Federal Reserve was going to taper QE and an end to QE was in sight.
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Wednesday, January 22, 2014

Digital Realty Trust, Inc. (NYSE: DLR)

Digital Realty Trust, Inc., a real estate investment trust (REIT), through its controlling interest in Digital Realty Trust, L.P., engages in the ownership, acquisition, development, redevelopment, and management of technology-related real estate. It focuses on strategically located properties containing applications and operations critical to the day-to-day operations of technology industry tenants and corporate enterprise datacenter users, including the information technology departments of Fortune 1000 companies, and financial services companies. The company’s property portfolio consists of Internet gateway properties, corporate datacenter properties, technology manufacturing properties, and regional or national offices of technology companies.
To review Digital’s stock, please take a look at the 1-year chart of DLR (Digital Realty Trust, Inc.) below with my added notations:
DLR tries again
DLR has formed a very clear down-channel chart pattern over the last (10) months. A channel is simply formed through the combination of a trend line support that runs parallel to a trend line resistance. When it comes to channels, remember that any (3) points can start the channel, but a 4th point or more confirms it. You can see that DLR has several points of channel resistance (red) and support (blue). If you look back in October you can see that the stock has already failed to breakout once before.

The Tale of the Tape: DLR has formed a common pattern known as a channel, in this case a down channel, and has broken through its resistance. A long trade can be entered on a pullback to the previous channel resistance, which currently sits near $50. A short trade should be considered if the stock falls back inside its channel like what occurred in October.
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Three stock picks for 2014

It looks like we could be entering a true stock-picker's market.

The CBOE Correlation Index is at its lowest levels in years. That means stocks are not moving as one so, if you want to beat the market, you will have to find the right stock.
Enter Bob Doll, the veteran investor who has made money all types of markets. The Chief Equity Strategist and Senior Portfolio Manager at Nuveen Asset Management has three stocks he thinks everyone should own.

Those three stocks are among the 25 he has selected in a unit investment trust called the Nuveen 2014 Equity Outlook Portfolio. That portfolio was developed to profit from Doll's ten predictions for this year.

Common factors among these mostly cyclical stocks are decent free cash flow and a generally low price-to-earnings bias, according to Doll. Energy and utilities stocks are underweighted while aerospace/defense, health care, and big technology are overweighted.  (more)

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3D Printing Stocks May Look Scary, but This Stock is Definitely a 'Buy': DDD

Last week, 3D printing stocks, one of the latest go-go sectors, traded in a volatile fashion after some of the companies issued statements about their sales guidance. The stocks chopped back and forth in the early part of the week, and then stabilized somewhat in the second half.

One of my favorite stocks in the group from a technical perspective is 3D Systems (NYSE: DDD). The stock, albeit sporting an ultra-steep slope from a multiyear perspective, respects its various technical levels. And although it has a volatile day here and there, for the most part it trades in an orderly fashion.

On Thursday, the company announced that it entered into a multiyear joint development agreement with Hershey (NYSE: HSY). The largest producer of quality chocolate in North America is looking to explore using three-dimensional printers in candy making. 

The applications of 3D printing technology are rapidly growing. This has caught traders' attention, and the share prices of the various publicly listed companies in the space have risen sharply in recent years, particularly in 2013. (more)

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Market Outlook: Obscure Indicator Confirms Bullish Outlook for Gold

There will be a number of earnings reports this week, and traders should start focusing on the trend in earnings. That could be bearish for the stock market.
Weak Start to Earnings Season Puts Bull Market at Risk
SPDR S&P 500 (NYSE: SPY) closed down 0.27% last week. Technical indicators are mostly bullish although bearish divergences are forming.
The chart below shows Moving Average Convergence/Divergence (MACD) on a weekly chart of SPY, although a similar pattern can be seen with other indicators such as stochastics or the Relative Strength Index (RSI). Bearish divergences are also visible on daily charts.
SPY Market Outlook Chart
A bearish divergence forms when prices move to new highs while an indicator fails to confirm the highs. Many technical analysts believe that divergences are eventually resolved with a decline in prices, but this belief is not confirmed by backtesting. Divergences lead to lower prices only about a third of the time in testing.  (more)
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3 Top Ranked ETFs That Will Crush the Market in 2014: PBE, FXR, QCLN

2013 was obviously a great year for the markets, as a better economic outlook propelled stocks sharply higher. Pretty much every sector was in the green for the time frame, leading to high hopes for the New Year.

However, the start of 2014 hasn’t been too kind to investors, thanks to the weak jobs numbers, earnings worries, and concerns over bond rates. These issues have kept a lid on market returns in the first half of January, and have led some investors to worry if this year will fall flat.

While it is still way too early to tell, it is important to note that a few market segments are still soaring, and appear well positioned for further gains this year as well. That is because they are zeroing in on some of the strongest stories in the current economic environment, and do look to have strength later on in the year too.  (more)

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Tuesday, January 21, 2014

What Do "Insiders" Know That You Don't?

With your local friendly asset-gatherer constantly promoting the cheapness of stocks of the TINA (there is no alternative) to BTFATH, TV talking-heads jabbering over 'stock-pickers' markets (infuriating Cliff Asness), and CEOs trotted out day after day to espouse how bright the future looks (even if outlooks in the immediate future are down-down-down-graded); it is hardly surprising that sentiment among the sheeple is so extremely bullish. So, when we saw the chart below... we could only ask - what do the insiders know that the average-joe-investor doesn't?

Of course, we are sure someone will try and explain away this avalanche of insider-selling with "tax-related" factors or "taking-profits" but none of that negates the less-than-optimistic tone that it implies about what the short- or medium-term expectations are from management of the firms that comprise the US equity market...
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Favorite ETFs: First Trust US IPO (FPX), WisdomTree Japan Hedged Equity (DXJ)

First Trust US IPO (FPX) began trading in April 2006, and has a market value of over $300 million—it's a hidden gem that won't run the risk of selling at a premium or discount to its NAV.

The IPOX-100 US Index is made up of the 100 largest, best performing, most liquid US initial public offerings; measuring the IPO's performance during their first 1,000 trading days. (IPOs get placed into the index on their sixth trading day and remain in the index for 1000 days.)

The top three sectors are consumer discretionary (25.9%), information technology (19.3%), and health care (16.8%). The top ten holdings are Facebook, AbbVie, GM, Phillips 66, Kinder Morgan, Kraft Foods, Marathon Petroleum, HCA Holdings, Dollar General, and Delphi Automotive.

First Trust US IPO is US-centric and a great complement to my more speculative pick, WisdomTree Japan Hedged Equity (DXJ), which is made up of dividend paying Japanese companies and an inbuilt hedge against Yen movements versus our almighty US dollar.

If the yen weakens, this fund should get a bit more return boost, on top of its holdings' returns, compared to its un-hedged competitors…and vice versa. But in 2014, so long as tapering takes hold, and the prospect for faster US growth turns into the reality of it, the yen should weaken versus the dollar.

As for its holdings, with Abenomics working its stimulus mojo and the macro global view brightening, the names herein should fare well—and if clouds gather, they should be able to weather any storm well.

It began trading in June 2006 and has a market value of over $11.9 billion—you won't have to worry about liquidity. The top three sectors are industrials (25.5%), consumer discretionary (22.8%), and information technology (15.6%).

The top ten holdings are Mitsubishi UFJ Financial, Toyota Motor, Canon, Honda Motor, Takeda Pharmaceutical, Japan Tobacco, Nissan Motor, Mitsubishi, Mitsui & Co, and Astellas Pharma.

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The Silver Spike Is Going To Shock The World In 2014 / January 20, 2014
As markets continue to see some wild trading as we start 2014, today James Turk told King World News that a massive spike in the price of silver is going to shock the world in 2014.  Turk also warned about central planners’ desire to control humanity through banking and currencies, and also included a fantastic chart of silver.
Turk:  “The big question everyone should be asking here, Eric, is:  When are gold and silver going to break out from the huge base both precious metals have been forming since their low price was reached last June?….
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After the Collapse: Six Likely Events That Will Follow an Economic Crash

It’s not too difficult to understand that we are well on our way to a paradigm shift in America; in fact we’re in the midst of it right now. The writing is on the wall and can no longer be ignored.
The US government has run up trillions of dollars in debt, and given the recent debates over the country’s debt ceiling, we can rest assured that neither Congress or the President will act to curtail spending and balance the budget. We will continue adding trillions of dollars to the national debt clock until such time that our creditors no longer lend us money.
From the monetary side, the Federal Reserve’s response to this unprecedented crisis has been to simply “print” more money as is necessary. On top of the trillions in dollars already printed thus far, the Fed continues quantitative easing to the tune of about $80 billion per month. It’s the only arrow left in the Fed’s quiver, because failing to inject these billions into stock markets and banks will lead to an almost instant collapse of the U.S. financial system. Unfortunately, the current strategy is chock full of its own pitfalls, the least of which being the real possibility of a hyperinflationary environment developing over coming months and years.  (more)

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Shutterfly, Inc. (NASDAQ: SFLY)

Shutterfly, Inc. provides digital personalized photo products and services in the United States. It offers a range of personalized photo-based products and services for consumers to upload, edit, enhance, organize, find, share, create, print, and preserve their memories. The company also produces and sells photo books, greeting and stationery cards, personalized calendars, and other photo-based merchandise, including calendars, mugs, canvas prints, mouse pads, magnets, and puzzles; and photo prints of carious sizes. In addition, it provides Shutterfly iPhone Photo App, which combines storage, viewing, and photo gift creation. The company offers its products and services under the Shutterfly, Tiny Prints, Wedding Paper Divas, and Treat brand names.
To review Shutterfly’s stock, please take a look at the 1-year chart of SFLY (Shutterfly, Inc.) below with my added notations:
1-year chart of SFLY (Shutterfly, Inc.)
SFLY had been trading sideways for the last 2+ months. Over that period of time, the stock had formed a clear resistance level at $52 (red). In addition, the stock also created a strong level of support at $45 (green). The rectangle formation on SFLY is very helpful in trading it because at some point the stock would have to break one of the two levels the pattern had created. As you can see, yesterday the stock finally broke the $45 support and should be moving lower from here.

The Tale of the Tape: SFLY recently broke down out of its rectangle pattern. A rally up to $45 would provide an opportunity to get short on the stock. However, a break back above $45 would negate the forecast for a move lower.
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