Thursday, May 29, 2014

Bull / Bear Spread Now In Danger Territory Above 40%

from King World News
On the heels of recent strength in stocks, the spread between the bulls and bears is now in danger territory above 40%. Featured below is a fascinating chart which takes a look at sentiment. Bullish sentiment has now reach new extremes and it is above worrisome levels as the markets have remained strong.
Here is the latest Investors Intelligence report along with the all-important sentiment chart: The S&P 500 and DJ Transports ended Friday with further records while the NASDAQ Comp and Russell 200 each gained more than 2.1% over the five sessions. Index and indicator charts had more gains and positive status shifts. Not surprisingly there was another small increase in advisor optimism. Not every shift was in that direction as some new skepticism followed the positive weekly close.
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Trulia Inc (NYSE: TRLA)

Trulia, Inc. provides tools to research homes and neighborhoods for consumers through Web and mobile applications. The company, through its tools, also enables real estate professionals to market their listings. It provides subscription and free products for real estate professionals, as well as sells display media advertising. In addition, the company offers information on schools, crime, neighborhood amenities, home values, and other communities. It serves buyers, sellers, and renters. The company was formerly known Realwide, Inc. and changed its name to Trulia, Inc. in September 2005. Trulia, Inc. was founded in 2005 and is headquartered in San Francisco, California.
To review Trulia’s stock, please take a look at the 1-year chart of TRLA (Trulia, Inc.) below with my added notations:
1-year chart of TRLA (Trulia, Inc.)
TRLA had been trading sideways for the last 3-4 months. Over that period of time the stock had formed a somewhat clear resistance level at $36 (red). In addition, TRLA had also created a strong level of support near $29 (green). At some point the stock had to break one of those two levels created by the rectangle pattern, and yesterday the stock broke resistance. The stock should now be making a run at the prior $40 level (blue).

The Tale of the Tape: TRLA had a level of resistance at $36 and yesterday the stock broke that resistance. The ideal long opportunity would be on a pullback down to or near that previous $36 level. On the other hand, one would want to enter a short position on a break back above the $36 level.
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Bonds Lead, But Gold & Silver Will Follow

Years ago, 16 to be exact I was reading a book by John Murphy (the god father of technical analysis). And I read something that has always stuck in my mind. He said that the price of bonds typically lead trend reversals in the stock market.
Taking a look at the chart below, you will notice that both the price of bonds and the price of gold have started to show signs of strength even though the US stock market continues to rise. This is telling us that the big money players are slowly rotating their money out of stocks. This is exactly what the intraday charts of the indexes and volume have shown us in the last couple months (distribution selling) also. Smart Investors are starting to rotate their money into the safer havens like bonds, gold and silver.
gold stage
The treasury bonds market is one of the longest running bull markets in history. I do not recall any other asset class to have sustained a bull market for over 33 years.  The charts below shows this massive rally and also the new short term rally which will last for several months.  (more)
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Leveraged ETFs May ‘Blow Up’ Industry

BlackRock Inc. (BLK)’s Laurence D. Fink, who oversees the world’s biggest exchange-traded fund lineup, said leveraged ETFs are a structural problem and have the potential to “blow up” the industry.

“BlackRock would never do a leveraged ETF,” Fink said in a question-and-answer session with Deutsche Bank AG co-chairman Anshu Jain today in New York. Fink said he doesn’t understand why the U.S. Securities and Exchange Commission allows them to operate.

ETFs, which have turned into one of the most popular investing vehicles over the past decade, have become increasingly complex as firms try to appeal to a more diverse base of investors. While the majority of ETFs mimic indexes, leveraged versions use swaps or derivatives to try to amplify daily index returns. Leveraged and inverse ETFs have came under scrutiny over several issues since 2009, the year the SEC warned brokers and investors that the vehicles weren’t appropriate for long-term investors. (more)

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Our Top 3 Dividend Funds for a ‘Monthly Paycheck’ : PFF, SPFF, JPS

For income investors considering preferred stocks, having an idea of what to consider is a rational starting point.
I have three preferred-stock funds worth considering today. All three funds yield above 6%, and all three pay dividends monthly.
This is an additional benefit for anyone dependent on investment income to meet monthly expenses.
For any income investor who wants to venture into the world of high-yield preferred stock funds, any of these three picks will competently do the job.  (more)

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