Tuesday, June 17, 2014

Time to Bet Against the Euro

"They are going to trash the euro," economist Gary Shilling said a couple weeks ago.
I agree with him...
Shilling is the only economist on Wall Street to have correctly predicted lower interest rates – for decades. He is certainly one of Wall Street's most independent thinkers. And he and I agree on the euro...
Specifically, Shilling said:
Mario Draghi, the head of The European Central Bank, came out and said what I was predicting, that they are going to trash the euro because they see it as a promoter of deflation, of which they are scared stiff. (The full interview with Shilling is here.)

The fastest and easiest way for Draghi to jumpstart Europe's economy would be to "trash the euro" – as Shilling said. (more)

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Halliburton (NYSE: HAL), A No-Brainer to Own as Oil Prices Rise

Things are getting out of control in Iraq, and it's the latest sad chapter in what has arguably been one of America's biggest foreign policy stumbles of the past few decades.

Now, regardless of how you may feel about the Iraq war from a moral or strategic perspective, there is no denying the current disturbing facts on the ground right now.

Islamic extremist group ISIS, which is affiliated with al Qaeda, now has seized control of the city of Mosul and several other major Iraqi cities, and they are moving south quickly with their sights set on wrestling control of Baghdad from the current government.

This troubling trend is one that's caused geopolitical upheaval, and that upheaval is being reflected today in the price of crude oil. In fact, the price of both WTI crude oil and Brent crude surged to new highs for the year as it became clear that the violence in one of Iraq's major cities had escalated into what could be an overthrow of the U.S.-backed government. (more)

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Intercept Pharma (Nasdaq: ICPT) Ready to Double

Usually the best stocks to buy have not already tripled in value within the past six months.
But then there's Intercept Pharmaceuticals Inc. (Nasdaq: ICPT).
Jun 13
Price: 274.20 | Ch: -4.44 (-1.6%)
This biotech has attracted a lot of attention this year because of its innovative and promising drug, obeticholic acid (OCA). In trials, OCA has proven effective in treating patients suffering from a liver disease known as nonalcoholic steatohepatitis (NASH). This chronic liver disease can cause inflammation and scarring, which may lead to cirrhosis, liver failure, and death.
In fact, it was the Jan. 9 news that a National Institutes of Health (NIH) study was stopped early because it had found that OCA satisfied its requirements in improving the condition of the 283 test patients that propelled ICPT stock up more than 280% in one day.  (more)

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Rockwell Collins, Inc. (NYSE: COL)

Rockwell Collins, Inc. designs, produces, and supports communications and aviation electronics for commercial and military customers worldwide. It operates in two segments, Government Systems and Commercial Systems. The company also provides maintenance, repair, parts, and after-sales support services, as well as aftermarket used equipment. Rockwell Collins, Inc. was founded in 1933 and is headquartered in Cedar Rapids, Iowa.
To review Rockwell’s stock, please take a look at the 1-year chart of COL (Rockwell Collins, Inc.) below with my added notations:
1-year chart of COL (Rockwell Collins, Inc.)
COL had been trading sideways from mid-April until the end of last week. Over that period of time the stock had formed a clear resistance level at $80 (blue) and a strong level of support at $76 (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 continue moving higher from here.

The Tale of the Tape: COL had a level of resistance at $80 and the stock broke that resistance. The ideal long opportunity would be on a pullback down to or near that previous $80 level. On the other hand, one would want to enter a short position on a break back below that level.
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Where You’ll Find the Market’s Most Explosive Stocks: DDD

Trading momentum stocks can be incredibly difficult.

One minute, you’re making outrageous gains. Then, in less than a blink of an eye, the market turns and your favorite momentum plays stop working. Even worse, if you don’t get out in time, you stand to lose every cent you made on the run higher… maybe more.

But there’s a way you can monitor momentum stocks. If you know what to watch, you can use the signals in advance to buy momentum names at the right time—and sell before other traders ditch these stocks and drive down prices.

The trick is finding the hot sector or industry that’s leading the pack. Since early 2013, I’ve contended that 3D printing stocks have been “the tell”. These stocks were among the first to shoot higher in January 2013 as the market began its huge push higher. And 3D stocks were also the first popular momentum names to signal trouble ahead at the start of this year. They topped out in early January, social media and other momentum shares don’t peak until early March.

3D’s performance so far this year has flat-out stunk. 3D Systems Corp. (NYSE:DDD) has lost nearly 47% year-to-date.  (more)

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