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Drought could drain California of its power

April 9, 2015

You may have heard that California is experiencing an historic drought – the worst in  200 years by some measures. While this might seem like a problem isolated to lawns... Continue Reading »

Big Nasdaq breakdowns tend to worsen before they heal, data shows

March 26, 2015

When stocks were hit with a hard left jab on Wednesday, techs and biotechs took the brunt of the impact. The Nasdaq Composite fell 2.4%, its first loss of  greater than 2%+ since October.If you have... Continue Reading »

Stocks show impatience is a virtue

March 19, 2015

Equities pulled out of a steep dive in the middle of the Wednesday session, then turned up and shot higher after the Federal Reserve announced it would stop being patient, but wouldn’t be... Continue Reading »

Daily Issues

Trading a Sideways Market

April 20, 2015

Today was all about the idea that Friday was overdone. Tomorrow may be all about the idea that today was overdone. The next day, a reverse of the reversal. And so on. This is what is known as a sideways market, where bulls and bears stare at each other across Wall Street and dare each other to break out in one direction or another. No wonder the Dow Jones Industrials is up all of 1% after almost four months of activity this year.

In such an environment, you just have to trade the creases, wrinkles and opportunities. First, I want to tell you about one of the health care stocks that we have on our list now, and then we'll look at a new short-term idea.

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Trades Update

April 17, 2015

Responsible for today's collapse are the latest acts in the Greek debt tragedy. I wish I could say that investors are overreacting to that, but I am afraid they are not. My guess is that the risk of a Greek exit from the euro system is actually underpriced at the moment because investors are not thinking about the wider implications.

I realize everyone wishes the whole Greek situation would go away, but it won't. One thing about debt is that it is a permanent anchor on your life, whether you are a country or person, until it is extinguished. You can't just wave your hand, put on a sheepish look and hope it goes away. Debts have to be paid back – even more so if you are a country, because the international lending community is very unforgiving if you try to come back from a default. Just ask Argentina. In short, there is certainly something real to panic about this time, but that kind of panic can bring opportunity, especially for traders like us who have short-side tools available.

But against this backdrop, our current list of bullish plays fared exceptionally well with just one name stopping out for a slight loss. This bodes well for their performance going forward, which is why I'm inclined to stay pat for now.

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Mixed Bag of Earnings, Economic Data Weighs Down Thursday Trading

April 16, 2015

Stocks started in the red this morning, upshifted into the black by mid-afternoon and then downshifted into the red zone again. There was a lot of churn without much change, which is one of the hallmarks of distribution. Bulls better step it up here, or they could get run over in coming weeks.

The main problem weighing on investors' minds was the sluggish rebound in March housing starts. They were up just 2% month-over-month to a 926,000 seasonally adjusted annual rate following a big decline in February. This was well below the consensus expectation of 1.04 million SAAR. There was weakness across the board and across the country.

In today's Trader's Advantage, I'll share my take on the latest headlines, from the plethora of Fed commentary to the Apple Watch. Then we'll take a look at our trades, including one we closed today and two new buy recommendations.

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Poll

Which of the following sectors of the market do you think will outperform for the balance of 2015?

  • Utilities
  • Energy
  • Healthcare
  • Technology
  • Financials
  • Industrials
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