Friday, April 4, 2014

Is a 1987-type market crash 37 days away?

Investors marveling at the striking similarities of the bull market today to the one that ended in 1987 are hoping history doesn’t repeat itself.
If it does, the market could be in some serious trouble in 37 trading days. In 37 trading days, the ongoing bull market would be 1,311 trading days old, says Jim Paulsen of Wells Capital Management. That is a scary date because it was on the 1,311 trading day after the start of the 1982 bull market that the Standard & Poor’s 500 suffered its biggest one-day crash in history on Oct. 19, 1987. That crash snuffed out what had been a powerful market rally starting in 1982.
Normally these kinds of things are just market oddities. But investors are taking this one seriously since there are such strong similarities with the 1982 bull market and the one the market is currently in. For instance, the current bull run has marked a 175% rally from the low, which is where the 1982 bull was at this point in its run, Paulsen says.
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Costco Wholesale Corporation (NASDAQ: COST)

Costco Wholesale Corporation operates membership warehouses. The company offers branded and private-label products in a range of merchandise categories. It offers candy, snack foods, tobacco, alcoholic and nonalcoholic beverages, and cleaning and institutional supplies; appliances, electronics, health and beauty aids, hardware, office supplies, cameras, garden and patio, sporting goods, toys, seasonal items, and automotive supplies; dry and institutionally packaged foods; apparel, domestics, jewelry, house wares, media, home furnishings, and small appliances; and meat, bakery, deli, and produce. The company also operates gas stations, pharmacies, food courts, optical dispensing centers, one-hour photo centers, and hearing aid centers; and travel businesses.
Please take a look at the 1-year chart of COST (Costco Wholesale Corporation) below with my added notations:
1-year chart of COST (Costco Wholesale Corporation)
Over the last 9 months COST has created a key level of support at $110 (blue) and that $110 level is also the “neckline” support for COST’s H&S reversal pattern. Above the neckline you will notice the H&S pattern itself (purple). Rather than just 1 peak, COST’s left shoulder formed a “complex” shoulder with more than one peak.
Remember, patterns such as an H&S need to confirm to have the meaning that they imply. Confirmation of the H&S would occur if the stock were to break below its $110 support.

The Tale of the Tape: COST seems to have formed a head & shoulders pattern. Although a long trade could be made at $110, the pattern implies that the stock might be preparing to break lower. A short trade could be entered on a solid move below the $110 “neckline” support.
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3 Gleaming Solar Stocks to Grow Through 2016: CSIQ, JKS, TSL

Solar Energy has been praised and mocked by energy users over the past several years.  With several Solar companies failing spectacularly, like Solyndra, and Abound Solar, the historic returns have been abysmal at best.
After over 40 years of government investment in renewable energy (the U.S. alone spent $154.7 billion from 1973 to the end of 2013), it appears as though solar energy is finally getting a strong foothold in the World energy segment.  In 2013, we finally saw renewable energy companies posting solid returns, and seeing significant analysts’ upgrades for this quarter, and more importantly, out through 2015 as well.  (more)

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Rick Rule – One Of The Greatest Opportunities In Decades

from King World News
Today one of the wealthiest people in the financial world spoke with King World News about the incredible opportunities for investors in key markets. This is an important interview with Rick Rule, who is business partners with billionaire Eric Sprott, where he discusses exactly what he is doing with his firm’s money, as well as what investors should be doing with their own money.
Eric King: “Rick, what about the opportunities that are here (in the markets)?”
Rule: “Well, certainly I think that the opportunities you are referring to would be in the micro-cap and junior resource stocks. They’ve had a very nice move up in the last quarter of last year and the first quarter of this year….
Continue Reading at…
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Align Technology, Inc. (NASDAQ: ALGN)

Align Technology, Inc. operates as a medical device company primarily in the United States and internationally. It designs, manufactures, and markets a system of clear aligner therapy, intra-oral scanners, and computer-aided design and computer-aided manufacturing (CAD/CAM) digital services that are used in dentistry, orthodontics, and dental records storage. The company operates through two segments: Clear Aligner, and Scanners and CAD/CAM Services.
Please take a look at the 6-month chart of ALGN (Align Technology, Inc.) below with my added notations:
6-month chart of ALGN (Align Technology, Inc.)
ALGN hasn’t really done a whole lot over the last 6 months having traded in the mid-50′s most of the time. There are 3 very common price levels on this stock during those 6 months: $52 (blue), $56 (green) and $60 (red). Each of those prices has been both support and resistance multiple times. Recently the stock fell below $52, which should lead to lower prices, most likely to the next $4 increment down ($48).

The Tale of the Tape: ALGN just broke its $52 support. A long trade could be made on a break back above $52 with an expectation of a run to $56. A short trade could be made on a rally up to $52 with a stop placed above that level.
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