Monday, August 31, 2015

Gold Rally Marked by Short Covering

If there was ever any doubt that the majority of buying by the hedge fund category in the gold market over the past 3-4 weeks has been of the nature of short covering, this week’s COT should put that theory to rest.
Since the third week of July, the hedge fund category alone has covered or lifted 40,000 short positions. That against the addition of only 16,000 or so new long positions over the same time span. By a better than 2:1 margin, hedge funds have been covering shorts, not instituting fresh purchases of gold.
In the following chart, I have combined the speculative category ( hedge funds, large reportables and small specs) outright long and short positions and overlaid them upon a chart showing the price of gold. (more)

Chart of the Day - Sarepta Therapeutics (SRPT)

The Chart of the Day belongs to Serepta Therapeutics (SRPT).  I found the stock by using Barchart to sort the Russell 3000 Index stocks first for the highest technical buy signals then for a positive Weighted Alpha.  The Trend Spotter signaled another buy signal just yesterday.

Sarepta Therapeutics, Inc. focuses on the discovery and development of RNA-based therapeutics for the treatment of rare and infectious diseases. The Company's diverse pipeline includes its lead program eteplirsen, for Duchenne muscular dystrophy. Sarepta Therapeutics, Inc., formerly known as AVI BioPharma, Inc., is headquartered in Bothell, Washington.

Technical Indicators:

  • 100% Barchart technical buy signals
  • 61.60+ Weighted Alpha
  • Trend Spotter buy signal
  • Above its 20, 50 and 100 day moving averages
  • 8 new highs and up 14.55% in the last month
  • Relative Strength Index 63.22%
  • Barchart computes a technical support level at 33.22
  • Recently traded at 36.69 with a 50 day moving average of 32.51
Fundamental factors:
  • Market Cap $1.52 billion
  • The Revenue and earnings estimated are not reliable because they are all over the place
  • Wall Street analysts issued 6 strong buy, 2 buy and 6 hold recommendations on the stock
The 100 day moving avnlerages vs price has been a reliable technical trading strategy for this stock

Seabridge Gold's Stock $SA Could Hit $14, Another Deposit Site Extended

In a report published Friday, Singular Research analyst Jeffrey Briggs reiterated a Buy rating and $14.00 price target on shares of Seabridge Gold, Inc. (USA) , after the company announced positive drilling results in relation to the Deep Kerr deposit, which includes a considerable extension to the current boundary.
Same as in the case of the recently-announced extension of the Mitchell deposit, the expansion of the Deep Kerr deposit represents an “opportunity for continued increase in mineral resource at KSM,” the firm explained.
Given that removing selenium from water would be a potential issue in processing ore at the KSM Project, British Columbia required Seabridge to test a pilot plant before providing it with environmental clearance. The company recently completed the pilot successfully, aided by a Canadian environmental firm.

Deep Kerr

The aforementioned drill hole at Deep Kerr was extended 400 meters below the “previous hole that was near the lower end of the resource as currently defined. This means the new drill hole will provide information that will likely lead to an upgrade of the Deep Kerr resource estimate,” the report concluded.
Shares of Seabridge Gold are up more than 10 percent on Friday trading.

Hexcel Corporation (NYSE: HXL)

Hexcel Corporation develops, manufactures, and markets structural materials for use in commercial aerospace, space and defense, and industrial markets in the United States and internationally. The company operates through two segments, Composite Materials and Engineered Products. The Composite Materials segment manufactures and markets carbon fibers, fabrics and specialty reinforcements, prepregs and other fiber-reinforced matrix materials, structural adhesives, honeycombs, molding compounds, tooling materials, polyurethane systems, and laminates. The Engineered Products segment manufactures and markets aircraft structures and finished aircraft components, including wing to body fairings, wing panels, flight deck panels, door liners, helicopter blades, spars, and tip caps and fittings as well as for certain industrial applications.
Take a look at the 1-year chart of Hexcel (NYSE: HXL) below with added notations:
1-year chart of Hexcel (NYSE: HXL)
After rallying nicely into 2015, HXL started trading sideways over the following 4 months. While in the sideways move, the stock formed a common pattern known as a rectangle. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern.
HXL’s rectangle pattern formed a resistance at $52 (red) and a $48 support (green). After Monday’s drop, the stock is now back inside that range.

The Tale of the Tape: HXL is trading back inside its trading range. The possible long positions on the stock would be either on a pullback to $48 or on a breakout above $52. The ideal short opportunity would be on a break below $48.

US Weekly Economic Calendar

time (et) report period ACTUAL forecast previous
MONDAY, AUG. 31
9:45 am Chicago PMI Aug.   -- 54.7
TUESDAY,  SEPT. 1
9:45 am Markit PMI Aug.   -- 52.9
10 am ISM Aug.   52.0% 52.7%
10 am Construction spending July   0.9% 0.1%
TBA Motor vehicle sales Aug.
17.3 mln 17.5 mln
WEDNESDAY, SEPT. 2
8:15 am ADP employment Aug.   -- 185,000
8:30 am Productivity Q2
3.0% 1.3%
8:30 am Unit labor costs Q2   -1.4% 0.5%
10 am Factory orders July   1.0% 1.8%
2 pm Beige Book        
THURSDAY, SEPT. 3
8:30 am Weekly jobless claims Aug. 29   275,000 271,000
8:30 am Trade deficit July   -$41.8 bln -$43.8 bln
10 am ISM nonmanufacturing Aug.   57.9% 60.3%
FRIDAY, SEPT. 4
8:30 am Nonfarm payrolls Aug.
223,000 215,000
8:30 am Unemployment rate Aug.   5.2% 5.3%
8:30 am Average hourly earnings Aug.   0.2% 0.2%
 

Saturday, August 29, 2015

Chinese Medicine Not Impressing Dr. Copper

by Dan Norcini
Trader Dan

Dr. Copper apparently does not approve of the prescription ordered by the Chinese authorities to stem the slowdown in that nation, namely another 25 basis point interest rate reduction and a lowering of bank reserve requirements.
The red metal cannot sustain any upside action for long before sellers emerge to whack it again.
[...] This is number one of my THREE BIG C’s, Copper, Crude oil and Cotton.
So what exactly are the other two C’s telling us?
Continue Reading at TraderDan.com…

Black Monday? Panicked Faces Yet to Come. Mike “Mish” Shedlock


Oil Surges To $45 After Saudi Troops Invade Yemen

For the 3rd day in a row, crude oil prices are spiking as the short squeeze morphs into a war premium. Heberler reports that Saudi ground troops have entered Northern Yemen and seized control of two areas in the Saada province. WTI is now above $45...
As we noted previously, boots have been on the ground there (and tank tracks) since early July...

But, as Haberler reports, forces seize control of two areas in Yemen’s Saada province in the first actual ground offensive by The Saudis...(more)

Everything you’ve heard about China’s stock market crash is wrong

This week’s Chinese stock market implosion has been widely viewed as a reaction to the Chinese government’s devaluing the yuan on Aug. 11—a move many presume was a frenzied bid to lower export prices and strengthen the economy.

This interpretation doesn’t stand up to scrutiny. First, Chinese investors haven’t been investing based on how the economy is doing, but rather, based on what they think the government will do to prop up the market. The crash, termed “Black Monday,” was more likely a reaction to the central bank’s failure over the weekend to announce a widely expected cut to the bank reserve requirement since previous cuts in February and April had boosted stock prices. The government eventually caved and announced a cut on Tuesday (Aug. 25).  (more)

There's A 47% Chance Of A Recession, But It's Not Worrying These Analysts

In a new report, Bank of America analyst Ethan Harris discussed the recent market action in response to China and looked at the probability that the S&P 500’s decline is indicative of a recession on the horizon in the United States.
Despite a relatively high score on the firm’s recession probability indicator, Harris urges traders not to panic about the possibility of a recession.

Rate Hike Coming

Despite the injection of fear into the markets during the past week, Harris does not believe that the FOMC will allow stock market turbulence to influence its decision to raise rates on September 17. The latest employment numbers indicate a very strong labor market, and the FOMC has been emphasizing a strong jobs market as the key to its eventual target of 2 percent inflation.
In addition, the U.S. GDP growth rate of 3.7 percent in Q2, as well as Bank of America’s projected 2.8 percent Q3 GDP growth rate, indicates that the underlying U.S. economy is strong, regardless of the movement of the recent shakiness of the S&P 500.

Not Completely Disconnected

Although there is no direct link between equity market movement and underlying economic strength, there are ways that the stock market indirectly influences the economy. However, Bank of America determined that only 2 cents out of every $1 of financial market wealth goes to new consumption.
“Using our model, we estimate that the S&P 500 would need to decline to an index level of 1600 (implying another 20 percent drop from today’s level) and stay there to shave off a full one pp from household spending growth,” Harris added.

Recession Watch

The firm’s recession probability model is currently indicating a 47 percent chance of a U.S. recession sometime in the next 12 months. However, Harris cautioned that the indicator is prone to false signals. He included an old Paul Samuelson quote about using the stock market to predict recessions: “The stock market has called nine out of the last five recessions,” Samuelson famously joked.

The Bank of America recession indicator peaked at around 59 percent back in 2011 without any subsequent recession.

Friday, August 28, 2015

Selloff made these tech stocks cheap, says analyst: $FB, $AMZN, $NFLX, $GOOG

With numerous analysts highlighting "FANG" stocks-Facebook (NASDAQ: FB), Amazon (NASDAQ: AMZN), Netflix (NASDAQ: NFLX) and Google (NASDAQ: GOOGL)-as technology trades to buy on the stock market's latest dip, one analyst took a different stance. 

"Yesterday, you were able to buy Alibaba (NYSE: BABA) at below the IPO price," Youssef Squali, Internet company analyst at Cantor Fitzgerald said Thursday on CNBC's "Squawk Alley." "Which we always think is a great price to own a strong franchise like that." 

For Squali, Facebook, Amazon and Google are in the top five tech stocks to buy amid the carnage-but instead of Netflix, he's eyeing Chinese e-commerce giant Alibaba and travel-booking company Priceline (NASDAQ: PCLN).
 

Though a steep stock selloff Monday followed fears surrounding China's growth, Alibaba remains a strong pick based on market dominance, growth in excess of peers, and valuations, he said.

"We find concerns about China to be overblown," Squali wrote in a note Wednesday night. "Recent market turmoil appears to have had little impact on retail spending." 

While online travel company Priceline also does business in China through a local partner, it mainly focuses on getting Chinese travelers abroad, a travel market which shows no signs of weakening, he wrote. 

Despite shares of content-streaming service Netflix trading up almost 7 percent Thursday midday, Squali didn't see the FANG darling as a top buy, because it was still trading at a high valuation compared to the other stocks.

"We do like Netflix over time, we have a buy on it, but it wasn't able to make it into the top list," Squali said.
Still, the recent pullback has caused many companies to come back to more attractive prices, especially among smaller and mid-size companies, he said. 

"There have been a number of people that have stayed on the sidelines, and this pullback has given them an opportunity to jump in," Squali said. "People are looking at these as good opportunities, probably great opportunities if you look at the next couple of years." 

On Thursday at midday, closely followed technology barometers such as the S&P 500 Information Technology sector were trading up 2.21 percent, and the Nasdaq 100 was trading up 2.46 percent, right in line with the overall indexes.

Global Grain Stocks At 30 Year Highs Mean Food Deflation Is Next

Everywhere you look there’s still more evidence that the world economy is grappling with a  global deflationary supply glut.
To be sure, this wasn’t supposed to happen.
Trillions in central bank cash and seven years of ZIRP across DMs was supposed to give a defibrillator shock to global demand and trade. Instead, the wealth effect never trickled down (surprise!) and wide open capital markets only served to keep insolvent producers in business, contributing to still more supply as everyone hangs on until the bitter end. As China’s slowdown continues unabated, the commodity hoarding becomes more evident and indeed on Thursday, The International Grains Council reported that global grain stocks are forecast to hit 447 million metric tons, the highest level in 29 years.  (more)

   gmrsumme

GNC Holdings Inc (NYSE: GNC)

GNC Holdings, Inc. operates as a specialty retailer of health and wellness products. The company operates through three segments: Retail, Franchise, and Manufacturing/Wholesale. Its products include vitamins, minerals and herbal supplements, sports nutrition products, diet products, and other wellness products. The company sells its products under GNC proprietary brands, including Mega Men, Ultra Mega, Total Lean, Pro Performance, Pro Performance AMP, Beyond Raw, GNC Puredge, GNC GenetixHD, and Herbal Plus, as well as under third-party brands. It operates a network of approximately 8,900 locations worldwide.
Take a look at the 1-year chart of GNC (NYSE: GNC) with the added notations:
1-year chart of GNC (NYSE: GNC)
GNC looked like it might have been rounding out a top from November through July, but then the stock shot to new highs instead. Now, the stock seems to be coming back down to that same July low. Over the past year, GNC has found support at that same $41.00 support (green) on multiple occasions. Traders could expect some sort of bounce if the stock reaches that support again. However, if the $41.00 support were to break, lower prices should follow.

The Tale of the Tape: GNC has an important level of support at $41.00. A trader could enter a long position at $41.00 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.

Thursday, August 27, 2015

Man Who Predicted Monday’s Massive Surge Off Panic Lows And Today’s Monster Rally Looks At What To Expect Next

kingworldnews.com / August 26, 2015
On a day when the Dow surged over 600 points, it’s important when looking at the intensity of the recent panic and chaos in global markets to take a look at the big picture, so today King World News is pleased to feature a piece from one of the greats in the business who did an amazing job of calling Monday’s rally off the extreme panic lows as well as today’s massive rally in stocks.
August 26 (King World News) – This was the note Jason Goepfert at SentimenTrader after Monday’s carnage in the stock market.  It has turned out to be incredibly accurate:  “Similar to Friday, there are many different extremes and different ways to look at the panic selling that has occurred. We’ve seen a type of panic that rarely occurs, and when it does the pattern is to see some testing of the panic open over the next 1-2 days then a rebound lasting several days, then perhaps another test of the panic low….
Continue reading the SentimenTrader piece below…
READ MORE

4 Biotechs Piper Jaffray Is Buying On The Pullback : VRTX, NVAX, ALNY, ARWR

Biotech analysts at Piper Jaffray stated in a note on Wednesday that "we are buyers on weakness" of select biotech names that boast strong enough balance sheets to "make it through" upcoming value-driving events.
The analysts, led by Edward Tenthoff, singled out Vertex Pharmaceuticals Incorporated VRTX , Novavax, Inc. NVAX , Alnylam Pharmaceuticals, Inc. ALNY  along with Arrowhead Research Corp ARWR  being a smaller cap name.

Vertex: ORKAMBI Launch

Tenthoff noted that Vertex holds more than $1 billion in cash, while its total market cap stands at $29.2 billion. The analyst is expecting a "dramatic increase" in treatable cystic fibrosis patients with newly approved ORKAMBI, which will help drive revenue growth and a return to profitability in the near-term.

Novovax: Phase II Maternal RSV Data

Tenthoff pointed out that shares of Novovax dipped 27.5 percent since August 17, but he has "increased confidence" in the company following positive Phase II data in its RSV-F in elderly subjects.
Novovax also ended the quarter with $315 million in cash, which can fund "at least one" pivotal RSV trial as the company plans to enroll 8-10,000 elderly subjects by year-end.

Alnylam: TTR OLE Data

Shares of Alnylam lost 14 percent since August 17, trading at a $7.9 billion market cap, while the company ended the recent quarter with $1.4 billion in cash and expects to end the year with more than $1.2 billion.
According to the analyst, "all eyes" be on the patisiran and revusiran Phase II in OLE updates (expected in the fourth quarter), especially revusiran for familial amyloidotic cardiomyopathy (FAC) following three drop-outs due to rash/injection site reaction.

Arrowhead: Phase IIA HEPARC Data

Finally, Arrowhead holds $112 million in cash at the end of the third quarter and trades at a $298 million market cap.
Arrowhead will update Phase IIa HEPARC 2001 data at an R&D Day in September, which will include single administration 3.0 and 4.0mg/kg ARC-520 cohorts. The analyst noted he is not anticipating deeper S-antigen suppression than has been seen to date; he ultimately believes repeat ARC-520 dosing will be required to achieve the goal of 1.0 log reduction to induce seroconversion.

Stocks to Watch: MIFI, FORD, BITA, DDD



Novatel Wireless Inc (NASDAQ:MIFI) made a nice breakout today on volume. $2.89 is the next key level to watch on the upside.


Forward Industries, Inc. (NASDAQ:FORD) Worth eyeing, poised to breakout. Look at the two big volume days. That is serious accumulation. 1.93 is pretty much the pivot here. If it breaks tomorrow, we could see +$3 quickly.

Bitauto Hldg Ltd (NYSE:BITA) Flagging here + MACD crossover. Looking to see if stock can get over $27.56 for nice bounce into 30's


3D Systems Corporation (NYSE:DDD) still on high alert. Insiders are spending thousands of dollars ($615,584 / 47200 shares in August) to boost their stakes in the company. The bullish insider activity should indicate the stock is really worth buying. With a huge short interest any positive news could be a catalyst to move the stock up closer to $16.

Digital Realty Trust, Inc. (NYSE: DLR)

Digital Realty Trust, Inc., a real estate investment trust (REIT), through its controlling interest in Digital Realty Trust, L.P., engages in the ownership, acquisition, development, redevelopment, and management of technology-related real estate. It focuses on strategically located properties containing applications and operations critical to the day-to-day operations of technology industry tenants and corporate enterprise datacenter users, including the information technology departments of Fortune 1000 companies, and financial services companies. As of December 31, 2008, Digital Realty’s portfolio consisted of 75 properties, including 62 located in North America and 13 located in Europe. Digital Realty Trust has elected to be treated as a REIT for federal income tax purposes and would not be subject to income tax, if it distributes at least 90% of its REIT taxable income to its stockholders.
Take a look at the 1-year chart of Digital (NYSE: DLR) with the added notations:
1-year chart of Digital (NYSE: DLR)
After a nice rise back in January, but has since traded mostly sideways. During this sideways move, the stock found support at $62.00 (green). DLR has hit that support level a couple of times so far this year, and now the stock is testing that support once again. Traders could expect some sort of bounce, but if the $62.00 support were to break, lower prices should follow.

The Tale of the Tape: DLR has an important level of support at $62.00. A trader could enter a long position at $62.00 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.

Wednesday, August 26, 2015

What Now For the Dow Jones Industrial Average?

DJIND-D 8-25-2015

Martin Armstrong
The closing of the Dow at 15666.44 was below support at 15824.73. Additional support lies at 15176.26 and a closing beneath that level will warn of a break down to the 14334 area. We do have four Monthly Bearish Reversals under 15000 with a gap thereafter down to the 13650 area, and the long-term support starting at 12,221. Yearly does not come in until the 10000 level, so we are not talking about a reversal of fortune long-term. We could really break and that sends cash pouring into government bonds beyond anything we would contemplate.
Any paper rated BBB is becoming unsalable. We are starting to see capital even pick up high-rated corporate debt while shunning away from emerging market and local debt. So be on guard for we may be in a real Phase Transition in bonds and to accomplish that we may see really extreme levels in equities on the downside. This may not be 8000 points on the Dow as was the case from 2007 to 2009, but it could be 5000. If this week’s low gives way and we close August BELOW 15555, look out below. We need to wipe out the TV pundits.
We will update you on this development, but keep in mind that a break to new lows opens the pattern to the extreme.

These Stocks Go Up When Markets Crash



Investors are running for cover…
Financial markets around the world have had a meltdown over the last few days.
US stocks are coming off their worst week in four years…
The Euro Stoxx 600, an index that tracks 600 of Europe’s biggest companies, has lost 8% over the last five days...
And in China, the Shanghai Stock Exchange is down 38% since early June.
There’s been almost nowhere to hide from this global sell-off…except in gold.
The price of gold rose 3.8% last week, while US stocks lost 5.8%. (more)

METRO INC. (MRU.TO) TSX

GREEN - Favoured / Buy Zone
YELLOW - Neutral / Hold Zone
RED - Unfavoured / Sell / Avoid Zone

METRO INC. (MRU.TO) TSX - Aug 25, 2015

METRO INC. (MRU.TO)

844_1_20150824_310342_0_0_22166

Braskem SA (NYSE: BAK)

Braskem S.A. produces and sells thermoplastic resins. Its Basic Petrochemicals segment offers olefins, such as ethylene, polymer and chemical grade propylene, butadiene, isoprene, and butene-1; BTX products comprising benzene, toluene, ortho-xylene, para-xylene, and mixed xylenes; fuels, including automotive gasoline and liquefied petroleum gas; intermediates, such as cumene; and other basic petrochemicals, which include ethyl tertiary butyl ether, solvent C9, and pyrolysis C9. The company’s Polyolefins segment produces polyethylene, including LDPE, LLDPE, HDPE, UHMWPE, and EVA; green polyethylene from renewable resources; and polypropylene (PP). Its Vinyls segment produces polyvinyl chloride, caustic soda, chlorine, hydrogen, caustic soda flake, and sodium hypochlorite. The company’s USA and Europe segment produces PP in the United States and Germany. Its Chemical Distribution segment distributes solvents, including aliphatic, aromatic, synthetic, and ecologically friendly solvents; engineering plastics; hydro carbonic solvents and isoparafins; and general-purpose chemicals.
Take a look at the 1-year chart of Braskem (NYSE: BAK) with the added notations:
1-year chart of Braskem (NYSE: BAK)
Unlike most energy related stocks, BAK actually hasn’t hit a new low recently. However, the stock’s trend does look like its peers within the energy sector, which is down. Over the past 5 months BAK has formed a key support level at $6.50, while also forming a trendline of resistance since November. At some point, one of those two lines will have to break.

The Tale of the Tape: BAK has an important level of support at $6.50. A trader could enter a long position at $6.50 with a stop placed under the level, or on a break through the trendline resistance. If the stock were to break below the support a short position could be entered instead.

Tuesday, August 25, 2015

Deep Value Stocks To Buy After Black Monday : PEO, CVX, XOM, SLB, VISI


Warren Buffett once famously said, “Be fearful when others are greedy and greedy when others are fearful.” It’s hard to argue that a 1,000-point selloff in the Dow Jones Industrial Average on Monday morning is an indication of anything other than fear in the market.
Twenty seven-year financial services veteran Tim Melvin couldn’t resist being a little bit greedy on Monday morning when the entire market seemed fearful. Melvin shared with Benzinga a couple of places that he believes the recent pullback has created value among his favorite stocks.

Adams Natural Resources Fund PEO 5.21%

One name that Melvin was buying on the dip was Adams Natural Resources, an investment fund that buys shares of big-name energy stocks such as Chevron Corp CVX 4.8%, ExxonMobil Corp XOM 4.73% and Schlumberger Ltd SLB 4.68%.
He sees value in all of these big energy names, which are already down significantly due to the weak oil price environment, and Adams currently trades at a 15 percent discount to net asset value (NAV).
“The fund has a distribution rate of over 9 percent at this price so you will enjoy solid cash flow while you wait for energy prices to recover,” Melvin adds.

Volt Information Sciences Inc VISI 3.22%

Another name that Melvin couldn’t resist buying was Volt Information Sciences. He sees huge upside to the stock once management completes its efforts to dispose of non-core assets and re-focus the business.
“I have a hard time coming up with a long term scenario that does not end up with this stock higher by two or three times the current quote over the next few years,” Melvin told Benzinga.

A Word Of Caution

Although he did buy a bit on the Monday morning dip, Melvin warned that investors might want to hold off on going all-in on stocks just yet.
“I didn’t do a lot of buying as we are still closer to all-time highs than 52 week lows so there are not a lot of bargains just yet,” he explained

InterXion Holding NV (NYSE: INXN)

InterXion Holding N.V. provides carrier and cloud neutral colocation data center services in Europe. The company enables its customers to connect to a range of telecommunications carriers, Internet service providers, and other customers. Its data centers act as content, cloud, and connectivity hubs that facilitate the processing, storage, sharing, and distribution of data, content, applications, and media between carriers and customers. The company offers its services to digital media and distribution, enterprises, financial services sectors, managed services providers, and network providers.
Take a look at the 1-year chart of InterXion (NYSE: INXN) with the added notations:
1-year chart of InterXion (NYSE: INXN)
INXN got a nice pop back in February, but has since trended slowly lower. Eventually, the stock found support at $27.00 (green). INXN has hit that support level a couple of times so far this year, and now it looks like the stock will be testing that support once again. Traders could expect some sort of bounce, but if the $27.00 support were to break, lower prices should follow.

The Tale of the Tape: INXN has an important level of support at $27.00. A trader could enter a long position at $27.00 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.

Trade of the Day: Toll Brothers (TOL)

Add caption
Toll Brothers Inc (NYSE:TOL) — This builder of luxury homes, which operates in 20 states, is expected by Zacks to miss analysts’ estimates of 49 cents by 2% when Toll Brothers announces Q3 earnings prior to Tuesday’s open. However, a powerful record of growth, which is the result of excellent planning and long-term analysis of the housing market by management, might be a reason to believe that Zacks’ earnings estimates are too conservative.
Standard & Poor’s forecasts earnings of $2.30 in FY ’15, up from $1.84 last year. And Credit Suisse, noting that TOL exceeded Q2 forecasts (and that Wall Street underestimates Toll’s 2016 earnings potential), increased their FY15 estimate by 4 cents to $2.02 and FY16 estimates to $2.85, up from $2.78.
S&P also says that TOL’s geographic revenue mix and land holdings are more valuable than comparable builders, and that the company’s conservative business plan is to avoid speculative construction, unlike some of its peers. S&P’s 12-month target price of $41 is just 16.7 times forward EPS estimates, putting the price at a small, but warranted premium over its competition.
Technically, TOL stock is in a powerful uptrend that was confirmed on Aug. 12 with a breakout at about $39 following a consolidation that began in May. The break was probably the result of an upgrade by Benzinga’s analysts, who named TOL as one of their “top upgrades” with a revised 12-month price target of $48 from $35. But following the recent breakout, TOL fell several points on investors’ general market fears and pressures to raise cash.
Traders may continue to drive the stock to under its 50-day moving average at $38.55. Thus the “buy-under” price for TOL is $38 with a trading target of $45 by year’s end. If successful, our return would be over 18%.

Gold Price Forecast for the Final Bottom in Gold

As we wrote previously, in our daily gold trading newsletter, we usually focus on either short- or medium-term price swings, but in this essay we’ll do something quite different. We are going to analyze the gold market from the long-term perspective and we are going to focus on what’s important from the long-term point of view.

The most general and most important observation regarding gold’s performance in the last several years is that the yellow metal has been declining – it is not a one time even most gold investors had hoped it to be, but a new medium-term trend – and a quite powerful one. Major trends tend to end in a profound manner – during tops everyone wants to buy and when the bottom is formed everyone panics.

So far the rallies (even significant ones, when viewed from the short-term perspective) have just been corrective upswings that were followed by further disappointments. We haven’t seen a rally that would be strong enough to end the medium-term decline and we haven’t seen a bottom that would be accompanied by real panic among gold investors. (more)

Monday, August 24, 2015

Linear Technology (NASDAQ: LLTC) Now In A Bear Market

I have not been a fan of the technology sector for the past month and even penned a missive calling "tech leadership an illusion." While superstars such as Google (NASDAQ: GOOGL) were soaring, the rank-and-file tech stocks were actually lagging the market. 


Semiconductors have been some of the worst offenders. The benchmark PHLX Semiconductor (SOX) index actually started to fall in late May and has already sunk back to levels last seen in October.

There is an old bit of Wall Street wisdom that says to buy the strongest stocks in the strongest groups. This is based on the concept of relative strength. Research has shown that outperforming stocks tend to continue doing so. Conversely, the weakest stocks in the weakest sectors are likely to keep falling.  (more)

This Week On Wall Street: Seadrill Ltd (SDRL), Sarepta Therapeutics Inc (SRPT), Amgen, Inc. (AMGN)

Many investors were on edge this weekend after the stock market plummeted on Thursday due to China’s faltering stock market and concerns that the Fed will raise interest rates. Consequently, the Dow fell by 500 points, undoing the progress it had made all year. Despite the volatility, activity on Wall Street must go on. Although earnings season is coming to a close, there are still a handful of companies reporting earnings this week along with several biotechnology companies awaiting drug approvals. Here is what to look for in Seadrill Ltd (NYSE:SDRL), Sarepta Therapeutics Inc (NASDAQ:SRPT), and Amgen, Inc. (NASDAQ:AMGN)

Seadrill Ltd
Oil giant Seadrill Ltd is slated to announce second quarter 2015 earnings results on Thursday, August 27, after market close. The Street expects the company to post earnings of $0.63 per share on $1.18 billion in revenue, falling from $0.70 earnings per share on $1.22 billion in revenue year-over-year.  (more)

Government Properties Trust (NYSE: GOV) : Rent To Uncle Sam And Collect A 10% Yield

If you're going to be a landlord, then it's crucial to find good tenants -- ones that will never bounce a check, always pay on time and stick around for the long-term.
I've found a company that rents to the absolute most dependable tenant you can find: The U.S. Government.
You see, although Uncle Sam owns nearly 10,000 buildings, he's also the nation's largest renter.
And as it turns out, renting to the government is quite profitable.
Think about it... Government tenants tend to stay in the same office for decades without moving around, and they don't bounce rent checks. (more)

US Weekly Economic Calendar

time (et) report period ACTUAL forecast previous
MONDAY, AUG. 24
8:30 am Chicago Fed national activity index July -- 0.08
TUESDAY,  AUG. 25
9 am Case-Shiller home price index June -- -0.2%
9 am FHFA house price index June -- 0.4%
10 am New home sales July 520,000 482,000
10 am Consumer confidence Aug. 93.4 90.9
WEDNESDAY, AUG. 26
8:30 am Durable goods orders July
-1.0% 3.4%
THURSDAY, AUG. 27
8:30 am Weekly jobless claims Aug. 22 274,000 277,000
8:30 am GDP 2Q 3.4% 2.3%
10 am Pending home sales July -- -1.8%
FRIDAY, AUG. 28
8:30 am Personal income July
0.5% 0.4%
8:30 am Consumer spending July 0.4% 0.2%
8:30 am Core inflation July 0.1% 0.1%
8:30 am Trade in goods July -$61.8 bln -$62.3 bln
10 am Consumer sentiment Aug. 93.1 92.9

Saturday, August 22, 2015

BioMarin Pharmaceutical Inc. (NASDAQ: BMRN)

BioMarin Pharmaceutical Inc. develops and commercializes pharmaceuticals for serious diseases and medical conditions in the United States, Europe, Latin America, and internationally. Its commercial products include Vimizim, an enzyme replacement therapy for the treatment of MPS IV A, a lysosomal storage disorder; Naglazyme, a recombinant form of N-acetylgalactosamine 4-sulfatase for patients with mucopolysaccharidosis VI; Kuvan, a proprietary synthetic oral form of 6R-BH4 used to treat patients with phenylketonuria (PKU), an inherited metabolic disease; Aldurazyme used for the treatment of patients with mucopolysaccharidosis I, a genetic disease; Firdapse, a form of 3,4-diaminopyridine used for the treatment of Lambert Myasthenic Syndrome, an autoimmune disease.
Take a look at the 1-year chart of BioMarin (NASDAQ: BMRN) below with my added notations:
1-year chart of BioMarin (NASDAQ: BMRN)
Over the past year BMRN has been slowly climbing higher. During that time the stock had also formed a nice trend line of support (blue). Always remember that any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. BMRN’s trendline is definitely important. Yesterday the stock broke that trendline, while also breaking its key level of $132 (green).

The Tale of the Tape: BMRN has broken below trend line support and its key level of $132. A short position could be entered on a rally up to the trendline, which is currently near the $132, with a stop placed above that level. A long position could be entered if BMRN were to break back above the trendline.

The Death Of Petrodollar Is Near, Prepare For The Collapse: "V" The Guerrilla Economist

 
 

Full On Crash Alert For Major World Markets...

There are various reasons, both fundamental and technical, to believe that a market crash is almost upon us. This crash will affect virtually all world markets, including and especially the big Western Markets which have thus far escaped the devastation already afflicting the developing markets. Here we are going to focus on US markets, but they will all get taken down – European markets including the UK, and Far Eastern markets such as Hong Kong and Japan. 

The fundamental reasons for a market crash now are big and obvious – the ravages of deflation and depression brought about by extremes of debt which must cut into corporate profits – in Japan the debt situation is now hopeless, the Sovereign debt crisis set to crush Europe and probably destroy the euro, the collapse and implosion of the monstrous debt fuelled bubble in China which is already underway, an accelerating currency crisis in the Far-East exacerbated by the recent Chinese devaluation of the Yuan, and the collapse also already underway in Emerging Markets. Given that US markets have been driven to giddying heights by the combination, among other things, of maxed out margin debt and stock buybacks, it is clear that a crash of perhaps unprecedented proportions in on the cards. So much for the fundamentals, since we are more concerned with timing, we now turn to consider the latest charts.(more)

Time to ‘Binge’ on Netflix NFLX Stock Again?

Netflix Inc (NFLX) — This popular streaming video service reported its subscriber count jumped 31% in Q2 from a year ago to 65.6 million globally. Of those, 42 million are in the United States, where Netflix sees the potential addressable market as being in the 60 million to 90 million range. It is also quickly capturing international market share with over 23 million customers in about 50 countries. It looks to reach 200 countries by 2016.

Revenue increased 26% in 2014, and analysts at Capital IQ estimate sales will increase by 23% in 2015 and 25% in 2016. Their 12-month target price for NFLX stock is $128, which is based on a price-to-sales ratio of 6.3 times their 2016 estimate. (more)

Sell Corn

Corn Futures--- Corn prices traded higher for the 2nd consecutive trading session closing around 3.82 a bushel up another 4 cents as I’m now recommending a short position placing your stop above the 10 day high of 4.01 risking 18 cents or $900 per contract plus slippage and commission as the chart structure is starting to tighten up and will start to improve on a daily basis starting next week as prices have now rallied $.25 since last Wednesdays low of 3.57 as the commodity markets still look very weak in my opinion.

Corn prices in my opinion are overpriced due to the fact that we will have another tremendous crop here in the Midwestern part of the  United States as I think the last week was just a kickback as prices  filled the gap around $4.00 in last Monday’s trade as I think prices are headed lower with many of the commodity markets including crude oil and sugar prices, so continue to play this to the downside taking advantage of rallies as the chart structure and the monetary risk will be lowered here in the next couple of days.

This summer has flown by as usual but I see no reason to own grains or any other commodity at the current time especially due to the fact that Brazil is going to produce another record crop in corn and soybeans so maintain the proper stop loss while maintaining the proper risk management of 2% of your account balance on any given trade as I’ve not been in the corn market for a couple of months but at this point I think a downturn is coming upon us especially with harvest around the corner. TREND: LOWER –CHART STRUCTURE: IMPROVING

Friday, August 21, 2015

Long Tesla $TSLA? Now Is The Time To Exit

Tesla Motors Inc TSLA is one of the Street's most debated stocks. On the one hand, Trip Chowdhry of Global Equities Research thinks Tesla's stock is worth $385 as the company is strategically positioned to dominate the upcoming $1 trillion "TaaS" Industry.

On the other hand, Michael Lingenheld, managing editor of Cup & Handle Macro, has "given up" trying to understand why Tesla's stock trades at the levels it does.

"At $250 per share it doesn't even have a P/E multiple because it's unprofitable, and constantly fails to meet delivery targets," Lingenheld argued in a research note. "In Tesla's second quarter earnings announcement, CEO Elon Musk acknowledged they might not hit the previous goal of delivering 55,000 vehicles this year – yet again."

Lingenheld continued that this was "not a shock" and Tesla's stock dropped 8 percent – only to rebound and trade above its pre-earnings level, despite a fresh share issuance. He attributed the rebound to a report by Morgan Stanley analyst Adam Jonas who placed a $465 price target on Tesla, which would value it at $60 billion, or "more than $1 million for each electrical car it will produce this year."

"Why these analysts can make such arbitrary predictions and have the market react to them is beyond me and it reeks of Mary Meeker in 2001," Lingenheld argued. "It seems futile to short Tesla because it trades on hype but, if you're long, now is the time to exit."

Bottom line, Lingenheld did acknowledge that Tesla is "one of the more amazing" companies in existence today. As such, he said the stock could "easily" hit $465 "at some point," but there will likely be "major turbulence" along the way.

Chart of the Day Novavax $NVAX

The Chart of the Day belongs to Novavax (NVAX).  I found the biopharmaceutical stock by using Barchart to sort the Russell 3000 Indexstocks for the stocks with the highest Weighted Alpha then again for the stocks with technical buy signals of 80% or better.

Novavax is a specialty biopharmaceutical company engaged in the research, development and commercialization of proprietary products focused on women's health and infectious diseases. Their technology platforms involve the use of proprietary, microscopic, organized, non-phospholipid structures as vehicles for the delivery of a wide variety of drugs and other therapeutic products, including certain hormones, anti-bacterial and anti-viral products and vaccine adjuvants.

technical indicators:
  • 88% Barchart technical buy signals
  • 187.30+ Weighted Alpha
  • Trend Spotter buy signal
  • Above its 20, 50 and 100 day moving averages
  • 3 new highs and up 8.82% in the last month
  • Relative Strength Index 57.04%
  • Barchart computes a technical support level at 12.99
  • Recently traded at 13.12 with a 50 day moving average of 11.48
Fundamental factors:
  • Market Cap $3.52 billion
  • Revenue projected to decrease
  • Earnings estimated to decrease
  • In spite of these projections Wall Street analysts issued 6 strong buy recommendations on the stock

WP Glimcher Inc (NYSE: WPG)

WP Glimcher Inc., incorporated on December 13, 2013, is a self-administered and self-managed real estate investment trust (REIT). The Company is engaged in ownership, development and management of retail real estate. Washington Prime Group, L.P. (WPG L.P.) is the Company’s subsidiary that owns, through its affiliates, all of the Company’s real estate properties and other assets. As of December 31, 2014, the Company’s assets consisted of interests in 97 shopping centers in the United States, consisting of strip centers and malls.
Washington Prime Group Inc. operates independently of Simon Property Group Inc. as of May 28, 2014.
Take a look at the 1-year chart of WP Glimcher (NYSE: WPG) below with my added notations:
1-year chart of WP Glimcher Inc (NYSE: WPG)
WPG has been trending lower for the past 8 months. Over that time, the stock has formed an important trend line of resistance (blue). Any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. WPG’s trendline resistance currently sits right around $13.60.
The stock appears to be on its way down to its $13 support (green).

The Tale of the Tape: WPG is currently stuck under a down trending resistance. A break above that resistance should mean higher prices, thus a long trade could be made either then, or on a fall to the $13 support. Short traders might look to enter a trade at the resistance or on a break of support.

3 Factors Driving The Rally In Gold


The inverse correlation between crude oil prices and gold is playing out to the core recently. While crude oil slumped heavily over the last 20 days, the opposite has happened with gold. From breaking down the 41,100 mark in late July, the yellow metal has recovered significantly and breached the $1,150 mark after more than a month.
Bob Alderman, head of wealth management at Gold Bullion International, was on CNBC Thursday to discuss what is driving gold's rally.

Fed Comments

"We think there are three drivers that are in the market right now: the Fed, China – and I'll also couple in other emerging market currencies with China in terms of currency devaluation – and short covering," Alderman began. "I think, as far as the Fed goes, the dovish comments yesterday certainly led many to believe that there will be no rate change until at least December."

China And Emerging Market Currencies

He continued, "As far as China goes and, I think, it's very important...to also add in that there are other countries and other emerging market countries that have suffered far greater currency devaluations that China has, although China is the one we point to."

Short Covering

"And then short covering, I think, what's happened over the last week or two is with so few contracts being long, short positions topped out at about 159,000 a couple of weeks ago. I think these shorts are providing fuel to exaggerate upside moves as they run for cover," Alderman concluded.

Thursday, August 20, 2015

Stocks To Watch: MEIP, GOGO, FEYE


MEI Pharma Inc (NASDAQ:MEIP) The downtrend line resistance has been broken on the daily technical chart. The price can move up to $2.40/44 in the short-term. Indicators are strong and the MACD recently produced a new buy signal. Should breakout hard to upside when it crosses over $2.44 (GAP). Long setup.


Gogo Inc (NASDAQ:GOGO) looks poised to break out of a falling wedge pattern and MACD is about to climb above the signal line. If it clears resistance the move may be powerful.


FireEye Inc (NASDAQ:FEYE) has been in a major corrective phase in the recent weeks. The downtrend that commenced in late June appears to have been completed at the latest low of $41.77. The MACD on the daily chart is starting to give a new buy signal and the share price could move to the short-term target of $45.20-$45.84. This view would be valid as long as the stock holds above $41. Place a stop-loss at this level for long positions.

Yuan Devaluation Adds to Commodities Gloom

Another great game is certainly afoot in global financial markets, and China has announced its presence with authority. The bout, of course, is the currency war.
On August 11, China devalued its currency by the largest amount in one day since 1993. By doing so, it joined a phalanx of countries around the world that have actively depreciated their currencies against the U.S. dollar.
Markets have been roiling ever since. This is especially true for commodities, which are already in a weakened position.
But all the drama seems to be a bit of an overreaction. (more)

FOMC Reaction - Stocks Rip, USD & Bond Yields Dip As Sept Rate-Hike Odds Drop To 40%

 
The early leak of the FOMC Minutes was initialy spotted in the FX and Rates markets (higher USD and higher yields) but as the full minutes were released the pressure really began in what appears a more dovish reaction. The Dollar plunged - near its early flash crash lows, yield across the entire complex have declined notably and the curve steepened; stocks are rising and gold and silver and getting a further lift... as September rate hike odds plunge to 40%.
September odds tumble...

And December odds rise to 65%

And after the initial reactions, the follow-through is very dovish

Bemis Company, Inc. (NYSE: BMS)

Bemis Company, Inc. invents, designs, and manufactures packaging products in North America, Latin America, Europe, and the Asia-Pacific. It operates through two segments, U.S. Packaging and Global Packaging. The company offers multilayer polymer, blown, and cast film structures to produce packaging for food, personal care, medical, pharmaceutical, electronics, industrial, and other consumer goods applications. It distributes its products through its direct sales force. The company was formerly known as Bemis Bro. Bag Company and changed its name to Bemis Company, Inc. in 1965. Bemis Company, Inc. was founded in 1858 and is based in Neenah, Wisconsin.
Take a look at the 1-year chart of Bemis (NYSE: BMS) below with added notations:
BMS
After rallying into 2015, BMS started trading sideways over the following 6 months. While in the sideways move, the stock has formed a common pattern known as a rectangle. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern.
BMS’s rectangle pattern has formed a resistance at $47 (red) and a $43 support (green).  At some point the stock will have to break one of the two levels.

The Tale of the Tape: BMS is trading within a rectangle pattern. The possible long positions on the stock would be either on a pullback to $43 or on a breakout above $47. The ideal short opportunity would be on a break below $43.

Wednesday, August 19, 2015

Buying and Trading Levels for Amazon $AMZN

Amazon.com (AMZN) developed a Gap and Consolidate…then Rally Pattern through 2015 as drawn.
After an initial earnings gap, shares consolidate and support on rising moving averages.
The next swing or pathway has been an upward rally into the future.
We’re balancing the odds of this pattern repeating a third time on the July gap and consolidation.
If so, notice the support reversal candle off the $520.00 per share level at the rising 20-day EMA.
We’ll be bullish above the $520 pivot and breakout trigger bullish above $540.
A bearish sell pathway develops under the 20-day EMA near $520.  (more)

It’s Almost Time To Buy Crude Oil Again

It’s been a while since I’ve written about Crude Oil here on the blog. It’s a topic that has been coming up more often recently as prices are hitting levels not seen in over 6 years. Just because something is in the news a lot doesn’t mean it is a market that is worth our participation. In fact, more often than not, if it’s all over the news, you probably either missed it, or you’re too early. We have preferred to stay away from Crude Oil since it broke the uptrend line from the March lows. This occurred in mid-May after a 30% rally in Crude Oil that was sparked from the failed breakdown and bullish momentum divergence that we were pointing to in March. This worked out well the first time around and now I believe we are about to see something similar.  (more)

Keep Your Eye on Junk Bonds: They’re Starting to Behave Like ‘08

According to data from Bloomberg, corporations have issued a stunning $9.3 trillion in bonds since the beginning of 2009. The major beneficiary of this debt binge has been the stock market rather than investment in modernizing the plant, equipment or new hires to make the company more competitive for the future. Bond proceeds frequently ended up buying back shares or boosting dividends, thus elevating the stock market on the back of heavier debt levels on corporate balance sheets.

Now, with commodity prices resuming their plunge and currency wars spreading, concerns of financial contagion are back in the markets and spreads on corporate bonds versus safer, more liquid instruments like U.S. Treasury notes, are widening in a fashion similar to the warning signs heading into the 2008 crash. The $2.2 trillion junk bond market (high-yield) as well as the investment grade market have seen spreads widen as outflows from Exchange Traded Funds (ETFs) and bond funds pick up steam.  (more)

SolarCity Corporation (NasdaqGS: SCTY)

SolarCity Corporation designs, manufactures, installs, maintains, monitors, leases, and sells solar energy systems to residential, commercial, government, and other customers in the United States. It offers solar energy systems; solar lease and power purchase agreement finance products; mounting hardware for photovoltaic panels; and related software, as well as develops a proprietary battery management system, which is designed to enable remote, bidirectional control of distributed energy storage that can provide benefits to customers, utilities, and grid operators. The company also sells electricity generated by solar energy systems to customers.

Take a look at the 1-year chart of SolarCity (NASDAQ: SCTY) with the added notations:
SCTY
SCTY has been trending sideways since the fall of last year. Along the way, the stock has repeatedly found support around $46 (green). Now that the stock appears to be falling back down to that support level again, traders might be able to expect some sort of bounce. However, if the $46 support level breaks, lower prices should follow.

The Tale of the Tape: SCTY has an important level of support at $46. Traders could enter a long position at $46 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.

Tuesday, August 18, 2015

Crude Oil $USO Is Ready for a Quick Bounce

We have a classic contrarian setup in oil right now...
 
The price of oil has fallen 28% in just the past six weeks and is testing the $42-per-barrel low it hit back in March. Lots of analysts are looking for oil to fall even further over the next few months. And many of the financial television talking heads are looking for the price to dip into the $30s.
 
Oil has fallen so far, so fast... hardly anyone has anything bullish to say about it. Virtually everyone is rushing over to the "short" side of the boat.
 
But in the short term, I'm looking for a bounce. Here's why...(more)

CIGNA Corporation (NYSE: CI)

Cigna Corporation, a health services organization, provides insurance and related products and services in the United States and internationally. The company’s Commercial segment offers insured and self-insured customers medical, dental, behavioral health, and vision, as well as prescription drug benefit plans, health advocacy programs, and other products and services. Its Government segment offers Medicare Advantage plans to seniors in 16 states and the District of Columbia, Medicare Part D plans in 50 states and the District of Columbia, and Medicaid plans. The company’s Group Disability and Life segment provides group long-term and short-term disability insurance, group life insurance, and accident and specialty insurance. Its Global Supplemental Benefits segment offers supplemental health, life, and accident insurance products, as well as individual Medicare supplement plans that provide retirees with federally standardized Medigap-style plans. The company’s Run-off Reinsurance segment reinsures guaranteed minimum death benefits and guaranteed minimum income benefits plans. Its Other Operations segment provides corporate-owned life insurance that are permanent insurance contracts sold to corporations to offer life coverage; and operates the run-off settlement annuity business.

Take a look at the 1-year chart of Cigna (NYSE: CI) below with my added notations:
1-year chart of Cigna (NYSE: CI)
Over the past year CI has been trending consistently higher, while also forming a nice trend line of support (blue). Always remember that any (2) points can start a trend line, but it's the 3rd test and beyond that confirm its relevance. As you can see, the market deems this trendline to be very important. A pullback to that line will provide trading opportunities, one way or another.

The Tale of the Tape: CI has a trend line support to monitor. A long position could be entered on a pullback to the trendline, with a stop placed below the level of entry. A short position could be entered if CI were to break below its trendline.