Saturday, December 10, 2011
MF Global Disaster
MF Global DisasterTrading with other people's money
Collapse of the world's financial system
19 pagesclick here to view
Yum! Brands, Inc. Zacks Momentum Buy Stock
Company Description
Yum! Brands, with its subsidiaries, operates as a quick service restaurant in the United States and internationally. The company's restaurants include, KFC, Taco Bell and Pizza Hut. Yum! was founded in 1997 and has a market cap of $27 billion.
YUM has been a top performer in 2011, handily beating the averages with a fresh all-time high. That movement comes on strong international growth, on display in November with strong Q3 results that came in ahead of expectations.
Third-Quarter Results
Revenue for the period was up 14% from last year to $3.27 billion. Earnings also looked good, coming in at 83 cents, one penny ahead of the Zacks Consensus Estimate.
The big story out of YUM is the company's growth in Asia, where it has been aggressively expanding its presence. Same-store sales in China were up an eye-grabbing 19%.
Results on the domestic front were a little flat, with same-store sales down 3% from last year. The laggard of the group was Taco Bell, losing market share from stiff competition like McDonalds and Subway. That's important because Taco Bell accounts for about 60% of the company's domestic operating profit.
Estimates
We didn't see much movement in estimates off the good quarter, with the current year holding at $2.85 and the next-year estimate pegged at $3.19, a 12% growth projection.
Valuation
With a PEG ratio of 1.67, YUM trades at a premium to the benchmark of 1 for value.
12-Month Chart
On the chart, shares have been on the move since October, recently jumping into a new all-time high. Look for support from the trend on any weakness.
This Week's Momentum Zacks Rank Buy Stocks
Credit Acceptance Corp (CACC) continues to trade strong in the volatile market, recently hitting a new all-time high on another good quarter. With estimates on the rise and a bullish growth projection, this Zacks #1 Rank stock has plenty of upward momentum. Read Full Article.
Silicon Motion Technology Corp. (SIMO) has posted huge gains in 2011, up more than 300% after recently crossing the $20 mark. With estimates on the rise and a bullish growth projection, this Zacks #1 Rank stock is a small capper out of technology with plenty of momentum. Read Full Article.
Stamps.com, Inc. (STMP) has seen big gains over the last few months, recently hitting a new all-time high after reporting another strong quarter. With estimates on the rise and a bullish growth projection, this Zacks #1 Rank stock will deliver momentum to your portfolio. Read Full Article.
Americas Car Mart (CRMT) just surged into a new all-time high after reporting another strong quarter that included a 12% earnings surprise. With estimates on the rise and a bullish growth projection, this Zacks #1 Rank stock has plenty of momentum. Read Full Article.
Chart of the Day - Madison Square Gardens (MSG)
End the Fed [Audiobook, Unabridged] by Ron Paul & Bob Craig
Publisher: Hachette Audio; Unabridged edition (September 16, 2009) | ISBN: 1600248667 | Language: English | Audio CD in MP3 / 128Kbps | 350 MB
At first glance, abolishing the Federal Reserve and returning to the gold standard seems a quaintly eccentric idea, but Texas congressman Paul presents a plan to eliminate our country's central bank, and return to a private banking system, that's both serious and plausible. The questionable aspects involve Paul's predicted results: not only will ending the Fed eliminate inflation (the government cannot print more money than it has gold reserves), but also business booms and busts, wars, income inequality, trade imbalances and the growth of government. Further, and perhaps most important, it would "disempower the secretive cartel of powerful money managers who exercise disproportionate influence over the conduct of public policy." Paul tends to gloss over those periods in history, including the Panic of 1907, in which private banking and the gold standard were law: "the bad reputation of nineteenth century American banking... is largely the result of... propaganda agitating for the creation of the Fed." With respect to "secretive cartels," Paul takes up the interesting question of whether J.P. Morgan is in fact preferable to Ben Bernanke. An engaging response to big-government solutions for the financial crisis, this knowledgeable and opinionated look at U.S. economics, from a firebrand public servant, should provoke much thought.
click here for audio
John Murphy’s Ten Laws of Technical Trading
John Murphy is the Author of a few of my favorite books. He is a legend in the field of Intermarket Analysis. His website, Stockcharts.com is one of the best out there – I use it everyday.
When people ask me what they can do to start learning some Technical Analysis – I always say the same thing, “Read Technical Analysis of the Financial Markets and then read Intermarket Analysis“, both by John Murphy.
He is one of the best that ever did it. These are his Ten Laws of Technical Trading:
1. Map the Trends
Study long-term charts. Begin a chart analysis with monthly and weekly charts spanning several years. A larger scale map of the market provides more visibility and a better long-term perspective on a market. Once the long-term has been established, then consult daily and intra-day charts. A short-term market view alone can often be deceptive. Even if you only trade the very short term, you will do better if you’re trading in the same direction as the intermediate and longer term trends.
2. Spot the Trend and Go With It
Determine the trend and follow it. Market trends come in many sizes – long-term, intermediate-term and short-term. First, determine which one you’re going to trade and use the appropriate chart. Make sure you trade in the direction of that trend. Buy dips if the trend is up. Sell rallies if the trend is down. If you’re trading the intermediate trend, use daily and weekly charts. If you’re day trading, use daily and intra-day charts. But in each case, let the longer range chart determine the trend, and then use the shorter term chart for timing.
3. Find the Low and High of It
Find support and resistance levels. The best place to buy a market is near support levels. That support is usually a previous reaction low. The best place to sell a market is near resistance levels. Resistance is usually a previous peak. After a resistance peak has been broken, it will usually provide support on subsequent pullbacks. In other words, the old “high” becomes the new low. In the same way, when a support level has been broken, it will usually produce selling on subsequent rallies – the old “low” can become the new “high.”
4. Know How Far to Backtrack
Measure percentage retracements. Market corrections up or down usually retrace a significant portion of the previous trend. You can measure the corrections in an existing trend in simple percentages. A fifty percent retracement of a prior trend is most common. A minimum retracement is usually one-third of the prior trend. The maximum retracement is usually two-thirds. Fibonacci retracements of 38% and 62% are also worth watching. During a pullback in an uptrend, therefore, initial buy points are in the 33-38% retracement area.
5. Draw the Line
Draw trend lines. Trend lines are one of the simplest and most effective charting tools. All you need is a straight edge and two points on the chart. Up trend lines are drawn along two successive lows. Down trend lines are drawn along two successive peaks. Prices will often pull back to trend lines before resuming their trend. The breaking of trend lines usually signals a change in trend. A valid trend line should be touched at least three times. The longer a trend line has been in effect, and the more times it has been tested, the more important it becomes.
6. Follow that Average
Follow moving averages. Moving averages provide objective buy and sell signals. They tell you if existing trend is still in motion and help confirm a trend change. Moving averages do not tell you in advance, however, that a trend change is imminent. A combination chart of two moving averages is the most popular way of finding trading signals. Some popular futures combinations are 4- and 9-day moving averages, 9- and 18-day, 5- and 20-day. Signals are given when the shorter average line crosses the longer. Price crossings above and below a 40-day moving average also provide good trading signals. Since moving average chart lines are trend-following indicators, they work best in a trending market.
7. Learn the Turns
Track oscillators. Oscillators help identify overbought and oversold markets. While moving averages offer confirmation of a market trend change, oscillators often help warn us in advance that a market has rallied or fallen too far and will soon turn. Two of the most popular are the Relative Strength Index (RSI) and Stochastics. They both work on a scale of 0 to 100. With the RSI, readings over 70 are overbought while readings below 30 are oversold. The overbought and oversold values for Stochastics are 80 and 20. Most traders use 14-days or weeks for stochastics and either 9 or 14 days or weeks for RSI. Oscillator divergences often warn of market turns. These tools work best in a trading market range. Weekly signals can be used as filters on daily signals. Daily signals can be used as filters for intra-day charts.
8. Know the Warning Signs
Trade MACD. The Moving Average Convergence Divergence (MACD) indicator (developed by Gerald Appel) combines a moving average crossover system with the overbought/oversold elements of an oscillator. A buy signal occurs when the faster line crosses above the slower and both lines are below zero. A sell signal takes place when the faster line crosses below the slower from above the zero line. Weekly signals take precedence over daily signals. An MACD histogram plots the difference between the two lines and gives even earlier warnings of trend changes. It’s called a “histogram” because vertical bars are used to show the difference between the two lines on the chart.
9. Trend or Not a Trend
Use ADX. The Average Directional Movement Index (ADX) line helps determine whether a market is in a trending or a trading phase. It measures the degree of trend or direction in the market. A rising ADX line suggests the presence of a strong trend. A falling ADX line suggests the presence of a trading market and the absence of a trend. A rising ADX line favors moving averages; a falling ADX favors oscillators. By plotting the direction of the ADX line, the trader is able to determine which trading style and which set of indicators are most suitable for the current market environment.
10. Know the Confirming Signs
Include volume and open interest. Volume and open interest are important confirming indicators in futures markets. Volume precedes price. It’s important to ensure that heavier volume is taking place in the direction of the prevailing trend. In an uptrend, heavier volume should be seen on up days. Rising open interest confirms that new money is supporting the prevailing trend. Declining open interest is often a warning that the trend is near completion. A solid price uptrend should be accompanied by rising volume and rising open interest.
“11.”
Technical analysis is a skill that improves with experience and study. Always be a student and keep learning.
- John Murphy