Wednesday, February 5, 2014

Market Outlook: Chart Shows a Rare Bullish Trade Setup

U.S. stocks were little changed after a volatile week.

January Indicator Indicates 50/50 Chance of Gains in 2014

SPDR S&P 500 (NYSE: SPY) fell 0.4% last week and was down 3.52% for the month.

SPDR Dow Jones Industrial Average (NYSE: DIA) was down 5.2% for the month.

According to a popular interpretation of the January Indicator, this makes the widely followed market forecasting tool bearish for 2014. But history doesn't support this interpretation of the indicator. In the past, a negative performance for the Dow in January has occurred 22 times since 1950, and a down month had been followed by declines in the rest of the year 50% of the time.  (more)

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US Could Start Defaulting on Debt ‘Very Soon’ Warns Lew

US Treasury Secretary calls on Congress to raise debt ceiling immediately to prevent the issue from harming the economic recovery
by Telegraph Staff, and agencies

US Treasury Secretary Jacob Lew warned Monday that the US is on course to hit its so-called debt ceiling, the limit to which it can legally borrow, by the end of the month.
He called on Congress to raise it immediately to prevent the issue from harming the economic recovery, adding that the government would start defaulting on its debt “very soon” if it failed to act.
“Time is short. Congress needs to act to extend the nation’s borrowing authority, and it needs to act now,” Mr Lew said in a speech on Monday.
“It would be a mistake to wait until the 11th hour to get this done,” he added. Mr Lew has previously called on Congress to raise the debt ceiling swiftly in a letter last month.
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These Dividend Growers are a Bargain

In the past week, financial media headlines have been dominated by emerging markets.

The topics range from slowing economic growth and social unrest, to plunging currencies, unstable banking systems and anxieties about the withdrawal of Federal Reserve stimulus.

The problems in emerging markets are certainly serious…

But as investors, we can’t be paralyzed by fear.

We need to keep a longer-term perspective and mine for yield in overlooked places. (more)
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Chart of the Day - Newlinks Genetics (NLNK)

The Chart of the Day is Newlinks Genetics (NLNK). I found the stock by using Barchart to sort the All Time New High List for frequency in the last month, then used the Flipchart feature to review the charts. Since the Trend Spotter signaled a buy on 1/7 the stock soared 56.89%.
NLNK is a biopharmaceutical company which focuses on discovering, developing and commercializing immunotherapeutic products for cancer treatment. Its portfolio also includes biologic and small-molecule immunotherapy products used for the treatment of oncology indications.

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Chipotle Mexican Grill (NYSE: CMG) Breakout Signals 'Buy' Now

Chipotle Mexican Grill (NYSE: CMG), the famed operator of quick service Mexican restaurants, soared to a new high on Friday after reporting fourth-quarter results. Earnings of $2.53 per share were up 30% year over year, matching analysts' estimates. And the company handsomely beat on the top line, reporting a 21% year-over-year revenue increase to $844.1 million versus an estimated $826.3 million.

During the conference call that followed the earnings announcement, the company discussed that an increase in prices on its menu is likely later in 2014, which comes as a direct results of higher input/ingredient costs for crucial items like beef and avocados. This is something that investors have also heard from other restaurant companies in recent weeks, and thus likely came as less of a surprise.  (more)

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