Thursday, September 11, 2014

Unleaded Gasoline notches 10 month low

The chart says it all - it is wonderful seeing some further relief at the gasoline pump!

Meanwhile, the general weakness in the overall commodity index continues with the Goldman Sachs Commodity Index registering a fresh 27 month low in today's session.  (more)Please share this article

Top-Rated Dividends Be a Millionaire in 20 Years

The secret to getting rich in the stock market isn't really a secret at all. In fact, it's so obvious and boring that most investors simply ignore it.
But frankly, if you think getting regular cash deposits into your brokerage account is boring, well, I'm not sure I can help...
Dividends paid to investors by U.S. companies account for 74% of stock market wealth. I didn't make that up — research by Robert Arnott and others shows it's true.
Here's a nice graphic from Ned Davis Research that shows the wealth-building power of dividends:
power dividend
Pretty much any category of dividend-paying stock trounces the non-dividend stock. And really, the difference in return on dividend and non-dividend stocks is stunning... $100 in a non-dividend stock would have returned 82% since 1972.  (more)
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Visa in the Middle of a Massive Consolidation

While breaking down each of the 30 Dow components earlier this week, I noticed something interesting taking place in shares Visa. Prices are currently right in the middle of a giant symmetrical triangle that’s been taking shape throughout 2014. The key here is that with prices currently above upward sloping 50 and 200 day moving averages, the bigger overall trend here is clearly up. Therefore, the resolution out of this consolidation is likely to be to the upside.
Here is a daily bar chart of $V in the middle of this pattern well-defined by these two converging trend lines. As prices approach the apex of this symmetrical triangle, something’s gotta give. A resolution is quickly approaching:
9-10-2014 V daily
From a risk management perspective, if prices break below the June lows near $207, then this bullish thesis is likely incorrect and a more bearish stance would be more appropriate. Although I believe this is the lower probability outcome, keeping an open mind to all possibilities is something that we pride ourselves on.
I would also argue that a rally above the July highs near $225 would confirm a breakout and bullish resolution to this pattern that would signal much higher prices in the near future. I think this is the higher probability going forward based on the evidence above along with momentum readings and longer-term time frame analysis.
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Gran Tierra Energy Inc. (NYSE: GTE)

Gran Tierra Energy Inc., an independent energy company, is engaged in the acquisition, exploration, development, and production of oil and gas properties in Colombia, Peru, and Brazil. The company’s acreage includes 3.4 million gross acres covering 17 exploration and production contracts in Colombia; 5.8 million gross acres covering 5 exploration licenses in Peru; and 47,734 gross acres covering 7 exploration blocks in Brazil. The company was incorporated in 2003 and is headquartered in Calgary, Canada.
Take a look at the 1-year chart of Gran (NYSE: GTE) with the added notations:
1-year chart of Gran (NYSE: GTE)
For pretty much the entire last year GTE had found a repeated area of support at the $6.80 (blue) area. The stock finally broke that support back in July and fell all the way down to around $6.25. Now that GTE has rallied back up to $6.80, and tested it as resistance, the stock should be moving overall lower from here.

The Tale of the Tape: GTE had a key level of support at $6.80. Now that the stock has broken support, a trader might want to enter a short trade at or near the $6.80, with a stop placed above the level of entry. A break back above $6.80 could negate the forecast for a move lower.
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America Is On The Verge Of Losing Its Place In The World As No. 1

The U.S. economy is the largest economy in the world. But it wasn't always the largest.
And it's unlikely to remain the largest economy for much longer.
The chart above comes to us via Deutsche Bank's Jim Reid.
"As Alexander, Rome and Britain fell from their positions of absolute global dominance, so too has the US begun to slip," Reid writes in a new note to clients. "America’s global economic dominance has been declining since 1998, well before the Global Financial Crisis. A large part of this decline has actually had little to do with the actions of the US but rather with the unraveling of a century’s long economic anomaly. China has begun to return to the position in the global economy it occupied for millennia before the industrial revolution."
One look at the chart and it's pretty clear that it may not be very long before we start saying the U.S. is No. 2.
"Based on current trends China’s economy will overtake America’s in purchasing power terms within the next few years," Reid continued. "The US is now no longer the world’s sole economic superpower and indeed its share of world output (on a PPP basis) has slipped below the 20% level which we have seen was a useful sign historically of a single dominant economic superpower. In economic terms we already live in a bi-polar world. Between them the US and China today control over a third of world output (on a PPP basis)."
Reid offered this prescient quote from Napoleon Bonaparte: "Let China sleep, for when she awakes, she will shake the world."

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