AAPL Chart Exhibiting a Classic Breakdown

Apple (NASDAQ:AAPL) — On Oct. 3, we reviewed the possible future direction of AAPL:
1. The support holds, and the support line and 50-day moving averages are buy points with the stock eventually working its way higher.
2. The stock holds as noted and trades sideways, between $655 and $680, for up to several months before either falling through the support line, turning the line into a neckline of a head-and-shoulders top, or resuming its upward trend.
3. The stock resumes its near-term downtrend, closes under $652, and thus confirms an immediate head-and-shoulders breakdown with a target of about $605.
On Monday, the third option, a head-and-shoulders breakdown, occurred following more production problems with the new iPhone 5. Despite reduced trading volume due to Columbus Day, enough sellers surfaced to drive the stock’s price through the neckline at $655 on a breakaway gap.
This is a classic breakdown — it just doesn’t get any clearer than this. However, a fall to $605 would not change the long-term direction of the stock (which is still up) and could present a good buying opportunity. I’ll review it when it gets there.

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Wal-Mart Stores, Inc. (NYSE: WMT)

Wal-Mart Stores, Inc. operates retail stores in various formats worldwide. It operates retail stores, restaurants, discount stores, supermarkets, supercenters, hypermarkets, warehouse clubs, apparel stores, Sam'ss Clubs, and neighborhood markets, as well as walmart.com; and samsclub.com. The company's stores offer meat, produce, deli, bakery, dairy, frozen foods, alcoholic and nonalcoholic beverages, and floral and dry grocery; health and beauty aids, baby products, household chemicals, paper goods, and pet supplies; electronics, toys, cameras and supplies, photo processing services, cellular phones, cellular service plan contracts and prepaid service, and books; stationery, automotive accessories, hardware and paint, sporting goods, fabrics and crafts, and seasonal merchandise; pharmacy and optical services; shoes, jewelry, accessories, and apparel for women, girls, men, boys, and infants; and home furnishings, housewares and small appliances, bedding, home décor, outdoor living, and horticulture products. Its stores also provide tobacco, tools and power equipment, office supplies, furniture, grills, gardening products, and mattresses; and wireless, software, video games, movies, and music products, as well as operate gasoline stations, and tire and battery centers.

To review Wal-Mart's stock, please take a look at the 1-year chart of WMT (Wal-Mart Stored, Inc.) below with my added notations:

WMT has created a couple of important price levels to watch. WMT has formed a clear resistance at $75 (navy), which would also be a 52-week high breakout if the stock could manage to break above it. In addition, the stock is climbing a short term, up-trending support level (red) over the last (2) months. Eventually, the stock will have to break one of those two levels.

Marc Faber: Market Setting Up for ‘Serious Setback’

3 Stocks for a Market Crash

Courtesy of Darth Maul, here are 3 stocks that you'll want to be short if the carnage in the market continues.

They are: The Ultimate Software Group (ULTI), LinkedIn Corporation (LNKD), and Loral Space & Communications (LORL).

Why these 3 stocks? They are all in Tech, which typically drops hard during a risk-off situation like today's -50 point bloodbath in the Nasdaq.

Secondly, they are all severely over-valued. All three have a P/E >50 and a Forward P/E >50. Shares could literally be cut in half and valuations would still be suspect.

And lastly, LNKD and ULTI are trading +100% above their 52 week low. LORL is trading at 70% above its 52 week low.

Mastery Bottom Line

We don't know if a market crash is coming. However, recent market conditions have been less that stellar. Keep these stocks on your radar as potential trades on the short side if we roll-over here.


Ultimate Software Group Inc (ULTI)

Over the past 12 months Ultimate Software Group Inc (ULTI) shares have traded between $49.08 and its 52-week high of $106.4.  Ultimate Software Group Inc shares are now trading with a P/E Ratio of 419.8 and EPS of 0.24.



LinkedIn (LNKD)

Over the past 12 months LinkedIn (LNKD) shares have traded between $55.98 and its 52-week high of $125.5.  LinkedIn Corp shares are now trading with a P/E Ratio of 1008.7 and EPS of 0.12.

Loral Space and Communications (LORL)

Over the past 12 months Loral Space and Communications Inc (LORL) shares have traded between $51.9 and its 52-week high of $82.48.  Loral Space and Communications Inc shares are now trading with a P/E Ratio of 175.9 and EPS of 0.85.

Chart Signaling Breakout Ahead That Could Make Traders 20% to 40%: CIE

Today, I would like to take a look at a typical trade setup that the average retail investor tends to shy away from but the professional trader salivates over. The company is called Cobalt International Energy (NYSE: CIE) and is focused on oil exploration and production.

At the moment, the stock appears to be in a healthy correction cycle; however, it is at a critical juncture -- the range between $20.50 and $21.50. If the stock drops below $20.50, this should stop out longs and, depending on velocity, turn this into a great short trade. On the other hand, a break above $24.70 would set up a great long trade.

 Additionally, with a beta of 2 versus the S&P 500, should the stock break in the direction of the S&P 500, it could get an extra boost and really reward those on the right side of the market.

Now let's dig a little deeper into the charts.  (more)

The Largest Economy In The World Is Imploding Right In Front Of Our Eyes

A devastating economic depression is rapidly spreading across the largest economy in the world.  Unemployment is skyrocketing, money is being pulled out of the banks at an astounding rate, bad debts are everywhere and economic activity is slowing down month after month.  So who am I talking about?  Not the United States - the economy that I am talking about has a GDP that is more than two trillion dollars larger.  It is not China either - the economy that I am talking about is more than twice the size of China.  You have probably guessed it by now - the largest economy in the world is the EU economy.  Things in Europe continue to get even worse.  Greece and Spain are already experiencing full-blown economic depressions that continue to deepen, and Italy and France are headed down the exact same path that Greece and Spain have gone.  Headlines about violent protests and economic despair dominate European newspapers day after day after day.  European leaders hold summit meeting after summit meeting, but all of the "solutions" that get announced never seem to fix anything.  In fact, the largest economy on the planet continues to implode right in front of our eyes, and the economic shockwave from this implosion is going to be felt to the four corners of the earth.

On Friday, newspapers all over Europe declared that Greece is about to run out of money (again).

The Greek government says that without more aid they will completely run out of cash by the end of November.

Of course the rest of Europe is going to continue to pour money into Greece because they know that if they don't the financial markets will panic.  (more)

This Buy Signal Delivers an Average 42% Gain in Six Months

Natural gas is one of history's greatest bear markets. Prices have fallen 93% since peaking in December 2000. The companies that produce natural gas have suffered along with the commodity. They should do well if gas prices rise, but there is no way to tell when that market turn will come. Eventually, the price of natural gas will probably stop falling, but it's dangerous to call bottoms in any market.

A supply glut of natural gas was behind the bear market. At the same time, demand for oil and gasoline has led to higher prices in those markets. In 1999, crude oil traded for less than $12 a barrel, and now it is almost $90. Gasoline futures have gone from $1.03 a gallon to $2.80.

Diesel fuel has risen along with gasoline, with the retail price for diesel fuel over $4 a gallon. That is pinching profits of trucking companies and some have turned to natural gas for a solution.

 Trucks can be retrofitted to run on natural gas and companies can save money with this fuel. The problem is that trucks have difficulty refueling on long trips due, and the solution to that problem may come from the efforts of companies like TravelCenters of America (NYSE: TA), which operates more than 240 travel centers offering fuel, food and other necessities along the highway. The company is continually expanding and seems to have enough cash on its balance sheets to continue growing.  (more)