The main reason people invest is to achieve financial security, and
while getting "rich" can be a moving target that depends on each
individual's definition of the word, investors aren't likely to turn
down wealth-boosting stocks. So we asked three of our top Motley Fool
experts to tell us which companies they think could make them rich, and
their answers cut across travel, dining, and finance.
Dan Caplinger
One stock I've followed for a long time is Chipotle Mexican Grill (NYSE: CMG )
, the fast-casual restaurant chain that has taken the industry by
storm. Even as traditional fast-food outlets focused on efficiency and
cost savings, Chipotle emerged with a fresh emphasis on high-quality
food, and customers quickly flocked to the burrito maker in droves. (more)
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Thursday, February 19, 2015
The Smart Money Loves Natural Gas Here! Going To $4?
When it comes to the market, there is no holy grail that will always
tell you when to buy or sell. It doesn’t exist. In my experience, the
real value is in the weight-of-the-evidence. We don’t just look at one
data point. I want to see momentum, sentiment, trend and most
importantly price action. When everything lines up, then we can
calculate the risk and figure out whether the risk vs reward meets our
strict standards.
Today I want to point out what is currently happening in Natural Gas futures. This is a market that for the most part I have not touched in a long long time. Ever since this hit our upside target above $6 a year ago, I haven’t seen any reason to bother with it. Long-time readers know that this is a market that I loved for a long time throughout 2012-2013 (see 2/12 & 4/12). But since then I’ve been quiet. There’s been nothing to say.
The latest Commitment of Traders Report suggests to us that the, “smart money”, is buying at a near record rate. The numbers are over 210,000 contracts net long from the commercial traders and quickly approaching a new record. From a more broad based sentiment gauge, the community hates it. Our data suggests that we are at the most pessimistic levels towards Natural Gas in over 5 years. It’s this sort of potential sentiment unwind that draws my attention.
Now, the most important thing obviously is price. The sentiment is great and all, don’t get me wrong. But only price pays. And this is where things get interesting. Here are Natural Gas futures breaking down below support from January and putting in fresh lows throughout the first half of February:
But a funny thing happened last week. Prices came roaring back, not just back above this key support from last month, but now above an important downtrend line from the highs in November. Natural Gas basically got cut in half in just a few months. I think based on the brief breakdown and quick recovery, we could be in store for a nice rally with well-defined risk. There is no reason to own this if we are back below the downtrend line from November. That’s my line in the sand.
Moving on, it only gets better. Momentum is something we take very seriously. When prices make new lows, particularly in a strong downtrend, and momentum simultaneously puts in a higher low, this is what we call a “Bullish Divergence”. In my opinion, this is precisely what we have here.
Let’s recap:
I like it…..I think we go to 4
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Today I want to point out what is currently happening in Natural Gas futures. This is a market that for the most part I have not touched in a long long time. Ever since this hit our upside target above $6 a year ago, I haven’t seen any reason to bother with it. Long-time readers know that this is a market that I loved for a long time throughout 2012-2013 (see 2/12 & 4/12). But since then I’ve been quiet. There’s been nothing to say.
The latest Commitment of Traders Report suggests to us that the, “smart money”, is buying at a near record rate. The numbers are over 210,000 contracts net long from the commercial traders and quickly approaching a new record. From a more broad based sentiment gauge, the community hates it. Our data suggests that we are at the most pessimistic levels towards Natural Gas in over 5 years. It’s this sort of potential sentiment unwind that draws my attention.
Now, the most important thing obviously is price. The sentiment is great and all, don’t get me wrong. But only price pays. And this is where things get interesting. Here are Natural Gas futures breaking down below support from January and putting in fresh lows throughout the first half of February:
But a funny thing happened last week. Prices came roaring back, not just back above this key support from last month, but now above an important downtrend line from the highs in November. Natural Gas basically got cut in half in just a few months. I think based on the brief breakdown and quick recovery, we could be in store for a nice rally with well-defined risk. There is no reason to own this if we are back below the downtrend line from November. That’s my line in the sand.
Moving on, it only gets better. Momentum is something we take very seriously. When prices make new lows, particularly in a strong downtrend, and momentum simultaneously puts in a higher low, this is what we call a “Bullish Divergence”. In my opinion, this is precisely what we have here.
Let’s recap:
- The Smart Money loves it and is buying aggressively
- Everyone else hates it
- Momentum put in a bullish divergence this month
- Price put in a failed breakdown (From failed moves come fast moves in the opposite direction)
- Futures basically got cut in half in 2 months so a mean reversion is likely
- The downtrend line from the November highs has now been broken to the upside
- The risk is very well-defined
- No one is talking about it
I like it…..I think we go to 4
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Treasury yields drop as Fed says it’s in no rush to hike rates
Treasury yields wiped out about half of Tuesday’s gains, plummeting
after minutes from the Federal Reserve’s January meeting suggested that
the central bank is in no rush to begin raising interest rates.
The yield on the 10-year note TMUBMUSD10Y, -3.07% slipped 6.3 basis point to 2.080%, according to data from Tradeweb. The yield on the two-year note TMUBMUSD02Y, -10.66% shed 6.9 basis points to 0.605%.
Yields move inversely to prices.
As the minutes showed, many on the Federal Open Markets Committee are concerned that weak wage growth could continue to weigh on spending, and officials agreed that policy should stay data-dependent, according to the minutes. (more)
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The yield on the 10-year note TMUBMUSD10Y, -3.07% slipped 6.3 basis point to 2.080%, according to data from Tradeweb. The yield on the two-year note TMUBMUSD02Y, -10.66% shed 6.9 basis points to 0.605%.
Yields move inversely to prices.
As the minutes showed, many on the Federal Open Markets Committee are concerned that weak wage growth could continue to weigh on spending, and officials agreed that policy should stay data-dependent, according to the minutes. (more)
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I may get out of US stocks: Nobel-winner Shiller
Nobel Prize-winning economist
Robert Shiller told CNBC on Wednesday he's thinking about shifting his
personal money away from U.S. stocks.
The Yale University professor said on " Squawk Box "
he has about half his portfolio in stocks. "I'm thinking about getting
out of the United States somewhat. Europe is so much cheaper."
Citing moves he's already made, Shiller said, "What I have done is I've invested in Italy indexes, Spain index."
The
stunningly low long-term interest rates are pushing U.S. stocks higher,
he said. "You look at the major asset classes, they tend to be pricey."
The solution, Shiller said, is to save more. That's the conclusion of his third edition of his book "Irrational Exuberance."
"Retirement will be difficult if you don't save more," he warned. "I don't think people have reached that state of mind yet."
On
housing, the co-founder of the Case-Shiller Home Price Index said he's
concerned that the run in recent years may not continue. "We've seen a
big increase in home prices since 2012, and I won't bet on that
continuing."
"Home prices are ... at about the right level based on history. So may be they won't go anywhere in the near future," he added.
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