Monday, April 14, 2014

The Week Ahead: Volatility Cocktail, Molotov or Rocket Fuel?

by Jeff Miller, A Dash of Insight
This week brings the makings of an explosive volatility cocktail:
  1. Important economic data;
  2. Key Q1 earnings reports;
  3. Options expiration;
  4. A short trading week; and
  5. An edgy market environment.
This is a very unusual combination, and the various elements will compete for attention.
Follow up:
Prior Theme Recap
Last week I expected the theme to test the divergence between economic fundamentals and what I called "fluff." The latter term referring to the collection of top-calling, market-rigging, crash charts, and "This is the big one" stories. This was one of my better forecasts. The economic news was excellent. The market was terrible. Everyone had an explanation - all different, all dubious.  (more)
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Alarming Secrets US & Saudi Arabia Are Hiding From The World / April 13, 2014
On the heels of continued chaos and uncertainty around the globe, today a 40-year market veteran sent King World News an incredibly powerful piece about the alarming secrets the United States and Saudi Arabia are now hiding from the world.  This is an extremely timely and fascinating piece from Robert Fitzwilson, founder of The Portola Group.  Below is what he had to say in this exclusive piece for King World News.
By Robert Fitzwilson of The Portola Group
April 13 (King World News) – Alarming Secrets US & Saudi Arabia Are Hiding From The World
Last week saw a continuation of the pattern we have seen since the start of the year.  The HUI and gold were ahead 3%, while the popular stock market indexes declined 3-6% in the 5-day period.  For the year, the HUI and gold continue to lead major stock indexes by 17-20%, despite the continuing manipulation and suppression of the paper prices for gold and silver as well as overt support by the elites for stocks….
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Baltic Dry Index – Collapse in World Trade

Baltic-Dry-D 4-11-2014
The Baltic Dry Index falls for fourteen days in a row and is on a record low.The index shows the volume of world trade by sea. The collapse of the index warns shipbuilders are in the crisis, as demand for new container ships is rapidly declining in the West.
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PVH Corp. operates as an apparel company in the United States and internationally. It is engaged in the design, marketing, and retail of branded dress shirts, neckwear, sportswear, footwear, athletic apparel, body wear, eyewear, sun wear, watches, handbags, men’s tailored clothing, men’s dress furnishings, accessories, women’s dresses and suits, women’s sportswear and performance apparel, golf apparel, hosiery, socks, small leather goods, fragrances, home and bedding products, bathroom accessories, and luggage. The company offers its products under the own brands, such as Calvin Klein, Tommy Hilfiger, Van Heusen, IZOD, ARROW, Warner’s, Olga and Eagle; and licensed brands comprising Speedo, Geoffrey Beene, Kenneth Cole New York, Kenneth Cole Reaction, Sean John, MICHAEL Michael Kors, Michael Kors Collection, Chaps, Donald J. Trump Signature Collection, DKNY, Elie Tahari, Nautica, Ted Baker, J. Garcia, Claiborne, Robert Graham, U.S. POLO ASSN., Ike Behar, Axcess, Jones New York, and John Varvatos.
To review PVH’ stock, please take a look at the 1-year chart of PVH (PVH Corp.) below with my added notations:
1-year chart of PVH (PVH Corp.)
PVH has been trading sideways for the last 3 months. Over that period of time the stock has formed a clear resistance level at $127 (red). In addition, the stock has also created a strong level of support at $115 (green) that was also support back in October. At some point the stock will have to break one of the two levels the rectangle pattern has created.

The Tale of the Tape: PVH has clear levels of support ($115) and resistance ($127). The possible long positions on the stock would be either on a pullback to $115, or on a breakout above $127. The ideal short opportunities would be on either a break below $115 or on a rally back up to $127.
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Pixelworks (NASDAQ: PXLW): Is This Potential Apple Takeover Target a 'Buy'?

Unlike many people, I enjoy driving. Whenever given the choice to fly or drive, I always choose to drive. Seeing the country from the highways and local roads is stimulating and often educational about the state of the economy.
Always being on the lookout for new investment opportunities, I recently noticed a unique billboard on I-95. This sign was the same size as the others, but its message was constantly changing. It appeared to present a new advertisement every 30 seconds or so.
Intrigued, I stopped on the wide shoulder to observe the sign more closely. This wasn't one of those flip signs that mechanically turns to a new message on the reverse side; it was a digital sign much like a big screen TV.  (more)
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Is This a Top In The Bull Market?

I spent the better part of last week looking at charts and going through value screens looking for something to buy.
There is a lot less there than there was even a year ago.
Investors have gone down the value chain buying up mid-caps, then small-caps, then biotechs. Now the fast money has been moving into penny stocks.
If you look at the S&P 500, you will notice that every two and a half months (with the exception of November, when the market simply consolidated for two months), we experience a (5%, +/-) correction.
This correction has been foretold by a MACD crossover that was well above the zero line. Contrarily, the time to buy has been on the dips, when the MACD is below the zero line.  (more)
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US Weekly Economic Calendar

time (et) report period Actual forecast previous
8:30 am Retail sales March   0.8% 0.3%
8:30 am Retail sales ex-autos March   0.4% 0.3%
10 am Business inventories Feb.   0.5% 0.4%
Tuesday, APRIL 15
8:30 am Consumer price index March   0.1% 0.1%
8:30 am Core CPI March   0.1% 0.1%
8:30 am Empire state index April   7.8 5.6
10 am Home builders' index April   51 47
8:30 am Housing starts March   995,000 907,000
9:15 am Industrial production March   0.4% 0.6%
9:15 am Capacity utilization March   78.7% 78.4%
12:25 pm Yellen speech in New York        
2 pm Beige Book       --
Thursday, APRIL 17
8:30 am Jobless claims 4/17   N/A 300,000
10 am Philly Fed April   9.8 9.0
10 am Leading indicators March   -- 0.5%
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