Fluor Corporation (NYSE: FLR)

It is very common for me to discuss Head and Shoulders (H&S) patterns in my articles. An H&S pattern is a reversal pattern that forms after an uptrend. A textbook H&S pattern starts to form when a stock rallies to a point and then pulls back to a particular level (shoulder #1). Next, the stock will rally again, but this time to a higher peak (head) than the previous shoulder. After forming the head, the stock will pull back to the same support as the first shoulder did. Finally, the stock rallies a 3rd time, but not as high as the head (shoulder #2). The level that has been created by all 3 of the pullbacks is simply a support level referred to as the “neckline”. The formation of an H&S pattern warns of a potential reversal of the uptrend into a possible downtrend. As with any chart pattern, a trader will usually not want to act on the pattern until the stock “confirms” the pattern. Confirmation is the break of the key level that has been created by the pattern. In the case of an H&S, confirmation would be when the stock breaks the neckline (support).

H&S patterns can also form upside-down and the pattern would be called an Inverse Head and Shoulders. It too is considered a reversal pattern after a downtrend, but it can also be a continuation pattern in an uptrend. The neckline would be a resistance rather than a support.

To see such an Inverse H&S pattern potentially being formed, please take a look at the 1-year chart of FLR (Flour Corporation) below with my added notations:
FLR rallied strongly from November through January and has since formed what appears to be an Inverse H&S (blue). I have noted the head (H) and the shoulders (S) to make the pattern more visible. (If it helps to visualize, imagine this pattern flipped upside down and you would have a regular H&S pattern.) FLR's “neckline” resistance is at the $67 level (red). FLR would confirm the pattern by breaking up through the $67 resistance, and if it does, the stock should be moving higher from there.
Keep in mind that simple is usually better. Had I never pointed out this Inverse H&S pattern, one would still think this stock is moving higher simply if it broke through the $67 resistance level. In short, whether you noticed the pattern or not, the trade would still be the same: On the break above the key $67 level. If that break occurs, the stock would also be hitting a new 52-week high.

The Tale of the Tape: FLR seems to have formed an Inverse Head & Shoulders pattern. A long trade should be entered on a breakout above the $67 level with a stop placed under that level.
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The Beginning of The Endgame for the U S Dollar?

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Warren Buffett Loves This Stock: Suncor Energy (NYSE: SU)

“Rule number one is never lose money. Rule number two is never forget rule number one,” says Warren Buffett.

He’s not just blowing hot air, either.

For proof, look no further than the performance of his holding company, Berkshire Hathaway (NYSE: BRK.A, NYSE: BRK.B). With Buffett at the helm, Berkshire shares outperformed the S&P 500 60 times between 1965 and 2005.

No wonder why, when Buffett makes a move on a stock, the world watches.

Of course, I’m not just waxing on about Buffett’s greatness. (There’s enough nauseating hero-worship out there as it is.)  (more)

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Chart of the Day - H H Gregg (HGG)

The Chart of the Day is H H Gregg (HGG).  The stock was found by sorting the New High List for frequency then using the flipchart feature for reviewing the charts.  The stock has  Trend spotter buy and 96% technical buy signals.

They are a leading specialty retailer of premium video products, appliances, audio products and accessories and currently operates seventy nine stores in Alabama, Georgia, Indiana, Kentucky, North Carolina, Ohio, South Carolina and Tennessee.
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KB Home (NYSE: KBH)

KB Home operates as a homebuilding and financial services company in the United States. The company constructs and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, move-up, and active adult homebuyers. It also provides title and insurance services to homebuyers. As of November 30, 2012, the company delivered 6,282 homes. It has operations in Arizona, California, Colorado, Florida, Maryland, Nevada, New Mexico, North Carolina, Texas, and Virginia. The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in 2001. KB Home was founded in 1957 and is headquartered in Los Angeles, California.
To review KB's stock, please take a look at the 1-year chart of KBH (KB Home) below with my added notations:
KBH has formed a nice down-channel chart pattern over the last (3) months. A channel is simply formed through the combination of a trend line support that runs parallel to a trend line resistance. When it comes to trend lines, remember that any (2) points can start a trend line, but a 3rd or more confirms it. You can see that KBH has (5) points of channel resistance (red) and (3) points of channel support (blue). Following the KBH channel can provide you with both long and short trading opportunities.
The Tale of the Tape: KBH has formed a common pattern know as a channel, in this case, a down channel. A long trade can be entered on a pullback to the channel support, which at this point seems to be around $15, or on a breakout through the channel resistance, currently sitting at $18. Short trades could also be placed at channel resistance or if KBH were to break below the channel support.
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This Could Kill the Stock Market: The 10 Year Treasury

A couple of years ago, I wrote that the S&P 500 would surpass the 1500 mark. This was during a time when investors were worried, the market appeared to be headed lower, and volume was non-existent.

Many doom and gloom experts called me a sucker. Some said I was crazy for thinking the market had the gusto to even move through 1400. They told me the fundamentals simply weren’t there.
And they were right.

The fundamentals for growth weren’t there – and they still aren’t.

Corporate earnings continue to beat analyst estimates but have seen so many downward revisions that beating market expectations doesn’t exactly mean there’s growth. (more)

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Gold Mining ETF Investing 101: GDX, GDXJ, GLDX, GGGG, NUGT, DUST, RING, PSAU

Gold miners have been pretty terrible investments for much of 2013. These miners often trade as leveraged plays on their underlying metals, and with gold floundering for much of the year, losses began to pile up for the space.

In fact, during the first seven months of the year, most gold miners lost more than 40%, further underscoring the extreme bear market conditions in the space. However, recent trading in the segment has been decidedly more bullish, leading many to believe that the worst might be over for the segment.

Gold miners have actually risen more than 15% on average in the past 10 day time frame, with a few rising more than 20% in the period. This suggests to many that gold miners—thanks to some firm trading in gold and bottom fishing—may finally be back on track and some intrepid investors may want to consider taking a closer look at the gold mining ETF space for diversified exposure.

There are a lot of options in the segment though, so some investors might be wondering which is the best choice for them. Below, we have highlighted some of the key differences between the many funds in this space for those looking to play the recent surge in gold miners in ETF form: (more)

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