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Wednesday, July 21, 2010
Green Shoots In The Form Of Double Bottoms?
While I’ve been fully expecting the markets to continue lower for at least one more leg down, I remain open to the possibility that they could throw me a curve ball or two. It's hard to remain objective in the face of index charts that are looking so terrible, but in reviewing some charts I came across a few stocks that could be completing small double bottoms, hinting that their corrections may soon be over.A double bottom typically resembles a "W" and forms after a downtrend. Typically, a low is formed and then the stock bounces higher before coming back to retest the first low. The important point to remember is that a double bottom is not valid until the price closes above the center peak of the "W", also known as the neckline. (For related reading, see Analyzing Chart Patterns: Double Top And Double Bottom.)
Oracle (Nasdaq:ORCL) is a good example of a stock that recently cleared the neckline of a small double bottom. While the left side of the base was a little choppy, the overall price action follows the pattern in principle. After a decline, ORCL attempted to rally reaching just over $23.50. It pulled back from this level and retested its prior lows near $21.50. It then rallied sharply to clear its June high and the neckline from the pattern. ORCL is now in the process of testing the neckline as support. If it can hold here, especially in the light of a negative IBM (NYSE:IBM) earnings report, it could rally to its projected target near $25.50. (more)
Stock Picks: Amazon.com, Goldman Sachs, IBM
By Businessweek.com and Bloomberg News StaffAmazon.com: Janney Montgomery Scott equity analyst Shawn Milne maintained a buy rating and $175 fair value estimate on shares of Amazon.com (AMZN) on July 20.
On July 19, Amazon.com, the largest Internet retailer, said growth in sales of its Kindle digital reader accelerated every month in the second quarter and that it is selling more electronic books than hardcover versions.
The rate of Kindle sales also has tripled since the company cut the device's price to $189, from $259, Amazon.com Chief Executive Officer Jeff Bezos said in a statement.
"We've reached a tipping point with the new price of Kindle," Bezos said. "Amazon.com customers now purchase more Kindle books than hardcover books—astonishing when you consider that we've been selling hardcover books for 15 years, and Kindle books for 33 months." (more)
King World News Interviews John Williams of Shadow Stats
Walter J. "John" Williams - Founder of Shadow Government Statistics Newsletter and Specialized Economic Consulting Services: Analysis Behind and Beyond Government Economic Reporting. During his career as a consulting economist, John has worked with individuals as well as Fortune 500 companies. John began a lengthy process of exploring the history and nature of economic reporting and in interviewing key people involved in the process from the early days of government reporting through the present. For a number of years he conducted surveys among business economists as to the quality of government statistics (the vast majority thought it was pretty bad), and his results led to considerable coverage in broadcast / print media and meeting with representatives of all the gov’s statistical agencies.click here for audio
Real Estate Market is Already in Depression
Simon Maierhofer,Dogs are conditioned to perform tricks in order to receive a treat. Horses are conditioned to trot or gallop at command. Humans are conditioned to deny the existence of a bear market.
Conditioning is defined as a process of behavior modification by which a subject comes to associate a desired behavior with a previously unrelated stimulus. It's ironic that Webster's uses the term stimulus' to define conditioning, because that's the same term the government has used.
In fact, the government's and stock market's actions have conditioned investors to believe that the worst is behind them. Anytime we are presented with data that points towards a recession or depression, the general consent is: 'This time is different!'
Unemployment is up, housing is down but stocks are up, so things must be different. That's at least the logical conclusion on Wall Street.
This Time is Different (more)
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