How to Prepare for the Biggest Oil Collapse in Nearly 30 Years: CAE, MG.A, CAE, MG

Over the past couple of months, there’s been a general belief that oil prices have bottomed out at US$50 per barrel. There’s also been a belief that prices will rebound, perhaps in the second half of this year. After all, producers are cutting back on drilling, and low prices may lead to increased demand.
Those forecasts are not looking too good right now. Despite reduced drilling, production remains very healthy. Demand has not been able to pick up the slack. The oil price has fallen to US$43, well below the supposed US$50 support level, and there’s plenty more room for this number to fall. (more)

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$VSLR Breaks Out Above $10

$VSLR (Vivint Solar Inc; NYSE: VSLR) broke out from a several month trading range last week, closing Friday above $10 for the first time since early December 2014.

$VSLR : Vivint Solar Inc.

In evaluating the price action, we can see from both the daily and weekly charts that the $8 level served as an essential support area, while the $10 level had been a formidable ceiling that finally was pierced on a heavy volume breakout last week following a positive earnings report.

The rising RSI signal over the past few months was an indication that $VSLR bears were losing momentum, despite the limited price range that the stock traded in; essentially, the bears were unable to take the stock much lower than $8, and this allowed for a prolonged period of accumulation of shares by the bulls.

Moving forward, the $10 level will now be one to watch on any pullback in the price. If the bulls can hold this, then I would not be surprised to see $VSLR push towards the $13 - $14 level in the intermediate term, assuming the $12 level can be overcome first.

The weekly chart shows that $VSLR has had a predominantly lackluster performance since its Fall 2015 IPO. However, the tide may be turning in favor of the bulls now; with a market cap of just over $1 billion USD, $VSLR is still valued far less than its solar energy peers such as $SCTY (SolarCity Corp.; NYSE: SCTY), which Wall Street currently values at around $5 billion.

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Bullish Biotech Stocks CLDN Celladon, QURE Uniqure – Charts Trading At All Time High

These are two extremely bullish looking Biotech stock charts. Both are trading near their respective all time high. I recently posted them on Twitter and wanted to highlight them:

CLDN – Celladon

CLDN recently gapped above its all time high. From a purely technical perspective this is the most bullish price behaviour you could possibly ask for. It goes without saying anything can happen with Biotech stocks. That’s why you should never bet the farm on any single stock. Get exposure to lots of bullish set-ups and let the market do its thing. That said, the gap up has to be considered a break-away gap which implies potentially much higher prices down the road.

QURE – Uniqure

QURE is one of the strongest Biotech charts around. In order to qualify as ‘one of the strongest’ it obviously has to trade near its all time high. From a purely technical perspective, trading near the ATH is bullish behaviour.
Conclusion: When it comes to technical analysis it is best to keep things simple. When I am dealing with charts like the ones above this is what I always keep in mind:
In uptrends, surprise moves tend to be to the upside.

KBR, Inc. (NYSE: KBR)

KBR, Inc. operates as an engineering, construction, and services company worldwide. The company operates through three segments: Technology & Consulting, Engineering & Construction, and Government Services. The Technology & Consulting segment offers various services and solutions, including licensing, engineering and design, proprietary equipment, plant automation, catalysts, and related consulting services to hydrocarbons, chemicals, and fertilizer markets. The Engineering & Construction segment provides engineering and EPC services for the development, construction, and commissioning of projects in the offshore, onshore and liquefied natural gas, and gas-to-liquids markets; and liquefaction, regasification, floating LNG, and floating storage and regasification units. The Government Services segment offers construction, refurbishment, operations and maintenance of housing, and other facilities for military personnel, as well as operations support, embassy and other life support programs, heavy equipment transportation, and police facilities management integration services.
Take a look at the 1-year chart of KBR (NYSE: KBR) with the added notations:

KBR has been in a solid downtrend over the last year, which may or may not be over, while finding support at $15 (green) over the last 3 months. Now that the stock is there again, traders should be able to expect some sort of bounce. However, if the $15 support were to break, much lower prices should follow.

The Tale of the Tape: KBR has a key level of support at $15. A trader could enter a long position at $15 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.
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Larry Reaugh – Uptick Rule, Mike Swanson – Volatility in Equity Markets

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Saxobank’s Chief Economist: 2015 Is A Lost Year (and Here’s Why)

Even though the US has seen so-called ‘strong’ job numbers and Europe is forecast to grow 1.5% this year, Saxo Bank’s Chief Economist Steen Jakobsen says 2015 will be a lost year. That’s because the two supposed growth engines of the world – the US economy and emerging markets – will grind to a halt and slow Europe down in the process. As we already pointed out, for the first time since Lehman, US earnings are now expected to drop in 2015 – apparently confirming this second-half hockey-stick is now dead… and as Jakobsen explains in this brief clip, capital preservation remains a must going into the second quarter of the year… with 10Y Treasury yields expected below 1.5% by the end of the year.
Via SaxoTV…



Zero Hedge
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US EQUITIES BULL MARKET IS ABOUT TO END

2014 was a tough year for small cap stocks. The Russell 2000 index which is a great barometer of what speculative money is doing as a whole. History has shown that small capitalization stocks are the first group to show weakness after a multi-year bull market.

For all of 2014 this group of stocks has been struggling to hold up. Each time it nears a previous high, sellers come out of the woodwork and unload shares in large volume. This was the first tell-tale sign that institutions are starting to rotate their positions out of these high beta stocks.

Later that year in October 2014 the S&P 500 fell 10% in just a few weeks. The speed of the selloff and the heavy volume that accompanied it are yet another warning sign that the underlying strength of the stock market is weakening. This broad market selloff included the large capitalization stocks which means the end is nearing.

If we turn our focus to the Dow Jones Industrial Average and look at the chart below you will see my prediction for 2015/2016.

I should be clear on what to expect during market tops because they differ than market bottoms. Most bottoms that occur are powered by fear. And fear has a price pattern on the chart that is much different than what we see during market tops when optimism is high.

Bottoms tend to be more violent with large range bars and the process happens in half of the time than what a bull market top requires.

Bull market tops take longer to form and for price to actually breakdown and confirm it’s headed lower. My thinking is that a market top may have already started. The underlying metrics are eroding and the heavy volume selloff in Oct 2014 was the first major signal that big money is selling.

I do feel the market as a whole can and will make some minor new highs, but will have strong bouts of selling shortly after. Late 2015 and going into 2016 is when the US stock market will likely start to get volatile and we will see the first MAJOR drop in value. It will be similar to the first breakdown bar that took place Jan 2008. A 15-20% drop that breaks the Oct 2014 low is going to be the straw that breaks the camel’s back.

Once we get the initial break in price the market should pause or bounce for a few months as investors are still overly bullish at these BARGAIN prices “they think” and buy more shares. In reality it’s the worst thing an investor can do at this stage of the stock market life cycle.

Once the bear market starts investors should expect 12-24 months of lower and sideways price action.

So How Do We Take Advantage Of This?

There are two ways to play the next bear market. First is to simply move your money out of stocks. This means sell long positions, pull money out of mutual funds etc… and just hold your money in cash. Cash is king and by doing this you will retain your current level of wealth and be ready to invest when the time comes later in 2016/2017.

The second option is to do the same as above but to put a portion of your money to work in a way that will allow you to profit from a falling stock market. That is to invest in ETFs specifically inverse funds.

Inverse funds rise in value as the stock market price falls. For example if the Dow Jones Industrial Average drops 35% over the next 24 months, your investment would rise 35%, 70% or even 105% depending on the type of fund purchased.

Below are some ETFs that can be used to take advantage of the next bear market

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