Ned Davis Research says a bear stock market, generally defined as a
decline of at least 20 percent, isn't out of the question for this year.
In a report issued Friday, the firm, which has been bullish on stocks
for most of the rally since March 2009, says it expects continued gains
for now, The Wall Street Journal reports.
But the firm warns that if investors grow overly enthusiastic during the
next several weeks, sending prices too high, the market could tumble
later in the year, the paper says.
Ned Davis Research looks at various indicators to determine whether a
bear market is coming. These include ones measuring whether stocks are
ascending broadly through many industry sectors and countries, or
whether a shrinking cadre of large, expensive issues are leading the
market higher.
The second situation has pointed to bear markets in the past. But while
the indicators have dipped a little recently, they don't point to a bear
market yet. So Ned Davis isn't steering clients clear of stocks yet,
The Journal reports.
One expert who believes a big drop is definitely in store for the market
is Marc Faber, publisher of the Gloom, Boom & Doom Report. He
thinks Federal Reserve easing has artificially inflated stocks.
"I think the market is way overdue for a 20 to 30 percent correction," Faber tells CNBC.
"In fact, I'm hoping for the market to drop 40 percent so stocks will again become — from a value point of view — attractive."
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Thursday, February 13, 2014
Petrobras (PBR) How to Make a Fortune on Forgotten Oil
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Well, given the recent performance of Brazilian energy giant, Petrobras (PBR), investors are pretty fearful!
Shares have dropped to their lowest level in a decade, and are now trading at a whopping 40% discount to the company’s book value. Suffice it to say, that makes it one of the cheapest stocks on the planet.
With a markdown like that, you’d think most investors would be all over it faster than a Black Friday sale. (more)
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Parker Drilling Company (NYSE: PKD)
Parker Drilling Company, together with its subsidiaries, provides
contract drilling and drilling-related services in the United States,
Latin America, Africa, the Middle East, the Asia Pacific, and
Commonwealth of Independent States. It operates in six segments: Rental
Tools, U.S. Barge Drilling, U.S. Drilling, International Drilling,
Technical Services, and Construction Contract. The company operates
barge rigs for drilling natural gas, oil, and a combination of oil and
natural gas in the shallow waters in and along the inland waterways, as
well as drills geologically difficult wells and manages the logistical
and technological challenges of operating in remote, harsh, and
ecologically sensitive areas. As of February 28, 2013, its rig fleet
included 23 land rigs and 2 offshore barge rigs in international
locations; 12 barge rigs in the U.S. Gulf of Mexico; and 2 land rigs in
the U.S. The company also provides rental tools for land and offshore
oil and natural gas drilling and offers equipment used for drilling,
workover, and production applications, such as drill pipes, heavy-weight
drill pipes, tubing, high-torque connections, blow-out preventers,
drill collars, and others. In addition, the company also provides
technical services.
To review Parker’s stock, please take a look at the 1-year chart of PKD (Parker Drilling Company) below with my added notations:
PKD had been trading sideways for the last 3 months. Over that period of time, the stock had formed a clear resistance level at $8.50 (red). In addition, the stock also created a strong level of support at $7.50 (blue). The rectangle formation on PKD is very helpful in trading it because at some point the stock would have to break one of the two levels that the pattern had created. As you can see, earlier this week the stock finally broke the $7.50 support and has already started moving lower.
The Tale of the Tape: PKD recently broke down out of its rectangle pattern. A rally up to $7.50 would provide an opportunity to get short on the stock. However, a break back above $7.50 would negate the forecast for a move lower.
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To review Parker’s stock, please take a look at the 1-year chart of PKD (Parker Drilling Company) below with my added notations:
PKD had been trading sideways for the last 3 months. Over that period of time, the stock had formed a clear resistance level at $8.50 (red). In addition, the stock also created a strong level of support at $7.50 (blue). The rectangle formation on PKD is very helpful in trading it because at some point the stock would have to break one of the two levels that the pattern had created. As you can see, earlier this week the stock finally broke the $7.50 support and has already started moving lower.
The Tale of the Tape: PKD recently broke down out of its rectangle pattern. A rally up to $7.50 would provide an opportunity to get short on the stock. However, a break back above $7.50 would negate the forecast for a move lower.
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Chart of the Day - Sunoco Logistics Partners LP (SXL)
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Sunoco Logistics Partners L.P. is a limited partnership recently formed by Sunoco, Inc. to acquire, own, and operate a geographically diverse and complementary group of refined product and crude oil pipelines and terminal facilities.
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Top 10 Penny Stocks of 2014
Penny stock investing is attractive to those looking for huge gains
in a short period of time, and these top penny stocks from January prove
just that.
Each stock posted a gain of at least 97% in January alone — one gained an incredible 858%.
Investing in penny stocks can have its drawbacks and can be risky. But those investors who are prepared for the risks and jump on the right penny stock can double their money in days.
Just look at these top penny stocks from last month…(more)
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Each stock posted a gain of at least 97% in January alone — one gained an incredible 858%.
Investing in penny stocks can have its drawbacks and can be risky. But those investors who are prepared for the risks and jump on the right penny stock can double their money in days.
Just look at these top penny stocks from last month…(more)
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Genuine Parts Company (GPC)
You scan the car dealership lot and there are two choices that catch your eye…
One is a sleek coupe with fancy rims and a loud exhaust. It looks and sounds fast.
The other is an unassuming sedan. It has conservative trim and an engine that squeals.
The salesman looks on in amazement as you tell him that you’d like to purchase the plain four-door. (more)
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Wednesday, February 12, 2014
Hulbert: 'Eerie Parallels' Between Current Dow Chart and That of 1929
A chart of the Dow Jones Industrial Average going back to July 2012
closely matches one from 1928-29, signaling a crash may be coming later
this month or in March, if the correlation continues, says Mark Hulbert,
editor of Hulbert Financial Digest.
"There are eerie parallels between the stock market’s recent behavior and how it behaved right before the 1929 crash," he writes in an article for MarketWatch.
He first wrote about the chart on MarketWatch in early December, questioning its validity. But now that the pattern has continued to repeat, he's turning into a believer.
"One of the biggest objections I heard two months ago was that the chart is a shameless exercise in after-the-fact retrofitting of the recent data to some past price pattern," Hulbert notes.
"But that objection has lost much of its force. The chart was first publicized in late November of last year, and the correlation since then certainly appears to be just as close as it was before."
Another objection Hulbert heard was that the Dow soared more than 100 percent in 1928-29, compared with a gain of less than 50 percent in 2012-13.
"But there’s less to this objection than you might think," he notes. "You can still have a high correlation coefficient between two data series even when their gyrations are of different magnitudes.
"You may still be inclined to dismiss this. But there were many more were laughing last November when this scary chart began circulating. Not as many are laughing now."
One market expert who thinks a stock crash is coming is Marc Faber, publisher of the Gloom, Boom & Doom Report. He believes the Federal Reserve's stimulus has led to an overvalued market.
"I think the market is way overdue for a 20 to 30 percent correction," he tells CNBC. "In fact, I'm hoping for the market to drop 40 percent so stocks will again become — from a value point of view — attractive."
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"There are eerie parallels between the stock market’s recent behavior and how it behaved right before the 1929 crash," he writes in an article for MarketWatch.
He first wrote about the chart on MarketWatch in early December, questioning its validity. But now that the pattern has continued to repeat, he's turning into a believer.
"One of the biggest objections I heard two months ago was that the chart is a shameless exercise in after-the-fact retrofitting of the recent data to some past price pattern," Hulbert notes.
"But that objection has lost much of its force. The chart was first publicized in late November of last year, and the correlation since then certainly appears to be just as close as it was before."
Another objection Hulbert heard was that the Dow soared more than 100 percent in 1928-29, compared with a gain of less than 50 percent in 2012-13.
"But there’s less to this objection than you might think," he notes. "You can still have a high correlation coefficient between two data series even when their gyrations are of different magnitudes.
"You may still be inclined to dismiss this. But there were many more were laughing last November when this scary chart began circulating. Not as many are laughing now."
One market expert who thinks a stock crash is coming is Marc Faber, publisher of the Gloom, Boom & Doom Report. He believes the Federal Reserve's stimulus has led to an overvalued market.
"I think the market is way overdue for a 20 to 30 percent correction," he tells CNBC. "In fact, I'm hoping for the market to drop 40 percent so stocks will again become — from a value point of view — attractive."
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