Thursday, April 10, 2014

Warning: Do You Own These 'Dot-Bombs'?

When shares of Big Data firm Splunk (Nasdaq: SPLK) crossed the $100 mark at the end of February, the company had just delivered its first $100 million quarter. That was more than 50% higher than a year earlier, helping to seemingly justify the company's market value, which had just exceeded $10 billion.
Analysts at FBN Securities noted that such a lofty valuation "shows that the stock is not for the faint of heart," but they saw another 15% upside to their $115 price target. As it turns out, most have investors have lost heart. This stock has plunged 40% to around $60 over the past five weeks. What was once seen as an "own at any price" stock has quite suddenly become a "too hot to touch" stock.(more)
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Gold Is About To Rally 200 Points

The bottoming process in Gold continues to progress nicely. We came into the year with little or no Gold bulls on The Street. I seem to recall blog post after blog post detailing the losses that gold investors have had to endure over the past few years. In addition, the media was constantly questioning the long-time Gold bulls and calling them out because gold hadn’t gone up every year as it did for a decade. Rather than focusing on a potential bottom, it was all about the lower prices.
Well, that sort of pessimism is exactly how bottoms are born. So far this is playing out nicely. Today we’re looking at two charts of Gold, one is a daily and the other is a longer-term weekly to help put things in perspective.
Here is a daily bar chart of Gold prices. It’s easy to see the double bottom that got going right around New Year’s after Gold successfully retested last summer’s lows. Momentum was also putting in a much higher low, barely hitting oversold conditions on the second bottom:
4-9-14 gc daily
There are two more things I’d like to point out here. After a 200 point rally in Gold to start the year, prices have pulled back in a healthy way down to those converging moving averages. The red line represents the 200 day simple moving average and the blue line represents the 50 day. Also notice that on this pull back, momentum failed to reach any oversold conditions. This is generally a bullish characteristic.  (more)

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Gerald Celente – This Disastrous Event Is Going To Shock The World

from King World News
With continued turmoil across the globe, today the top trends forecaster in the world warned King World News that a disastrous event is going to shock the world. Gerald Celente also predicted that the Fed is going to use this disaster for its own benefit. Below is what Gerald Celente, founder of Trends Research and the man considered to be the top trends forecaster in the world, had to say in this powerful interview.
Celente: “There is going to be a Lehman Brothers moment. …The Federal Reserve has given banks two more years to get rid of their risky loans, so the gambling has just heated up. That’s all this is is gambling, and the wrong house is going to make the wrong bet….
Continue Reading at…
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Sprouts Farmers Market Inc (NASDAQ: SFM)

Sprouts Farmers Market, Inc., through its subsidiaries, is engaged in the retail of natural and organic food in the United States. Its products comprise fresh produce, bulk foods, vitamins and supplements, grocery products, meat and seafood products, deli and bakery products, dairy and dairy alternatives, frozen foods, beer and wine, natural health and body care products, and natural household products. As of February 27, 2013, the company operated in 170 stores in 9 states.
To review Sprouts’ stock, please take a look at the 1-year chart of SFM (Sprouts Farmers Market, Inc.) below with my added notations:
1-year chart of SFM (Sprouts Farmers Market, Inc.)
SFM has been trading sideways for the last 3 months. Over that period of time the stock has formed a clear resistance level at $40 (blue). In addition, the stock has also created a strong level of support at $34 (green). At some point the stock will have to break one of the two levels the rectangle pattern has created.

The Tale of the Tape: SFM has clear levels of support ($34) and resistance ($40). The possible long positions on the stock would be either on a pullback to $34, or on a breakout above $40. The ideal short opportunities would be on either a break below $34 or on a rally back up to $40.
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A FED Planned Economy McAlvany Commentary

McalvanyFinancialPublished on Apr 8, 2014
This week:
-Manhattan Real Estate defies gravity
-The sane voice of Fed Prez Richard Fisher
-Yellen says “We do it for the children.”

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US Households To Withdraw $430 Billion From Stocks In 2014 – Most Since Last Bubble

When it comes to the conventional wisdom of who owns the bulk of corporate stock in the US equity market, the consensus is simple: at 36% of total, the answer is the US household. This is shown in the chart below.

As an aside we disagree from this simplistic analysis because as is well known, the “Household” category, which is pulled from the Fed’s quarterly Flow of Funds report, is merely a placeholder plug, designed to balance out all the other member categories. What is less known is that entities such as hedge funds use extensive “off the books” leverage (just ask Citadel and its nearly 9x regulatory leverage) to hold far more equities than their capital allows them. Which means that in reality the US household owns far less stock than is believed.
But even if one takes the Fed’s data at face value, what becomes clear is that having owned virtually the entire stock market in 1945, households are now down to nearly their lowest fractional ownership in history, with the rest alloted to mutual, pension and retirement funds.
And it is only going to get worse.
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