Lame duck president + midterm elections = potential for a very special Q4 for stocks

October 1, 2014

If I told you that we are now coming into the best three-month period for stocks on a seasonal basis, you would probably say, “Everybody knows that.” I mean, most... Continue Reading »

"Death cross" for small-caps gets new life

September 23, 2014

Stocks plotzed on Monday without any specific catalyst other than some random comments out of China that maybe economic stimulus there would be muted, and some random home sales data... Continue Reading »

LUV is in the air

September 11, 2014

The investment research firm Bespoke has gotten into the business of consumer surveys, and last month they asked a representative sample of Americans to rank their most used and favorite... Continue Reading »

Daily Issues

Trades Update

October 1, 2014

The market continued its downward slide on Wednesday, with all of the major U.S. averages suffering losses greater than 1%. Most European and Asian stocks fell as well, particularly Hong Kong's Hang Seng index, although the Shanghai Composite managed a 0.3% gain.

Pain points in today's session included the first confirmed case of Ebola in the United States, the looming specter of an end to quantitative easing, and mostly weaker economic data. In today's Trader's Advantage, we entered four bearish trades and closed three bullish ones; I'll recap those outcomes and provide my outlook on our Buy List.

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Trades Update

September 30, 2014

Stocks faltered on Tuesday, with the S&P briefly retaking the 1,985 level before ultimately falling back to right around its 50-day moving average at 1,970.

The other major U.S. indexes largely followed a similar pattern, though the sell-off in the Russell 2000 small-caps was, once again, notably worse. European stocks, on the other hand, were mostly higher thanks to encouraging data on EU inflation and unemployment, as well as a solid read on August retail sales from Germany.

In today's Trader's Advantage, I have five new bearish ideas to share -- one in real estate and the others in small-cap tech -- and I'll update you on our current holdings as well.

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All Signs Point to a Fourth-Quarter Rally

September 29, 2014

Stocks sloshed around in the red today after their super-strong advance on Friday, but ended well off their lows with a faint but distinct hint of optimism shining through in the last half hour. There was no single catalyst for the early decline of more than 100 points for the Dow Jones Industrials Average, but there was some geopolitical unease that ranged from protests in Hong Kong to a sell-off in Brazil and new fears that Spain might split up.

The most obvious pain point for global equities was escalating riots in Hong Kong. Police used tear gas on student-led pro-democracy protests. The protests have been cited by many as a headwind for markets, but for the moment remain a limited and local issue.

In today's Trader's Advantage, I'll share a little-known historical trend that suggests a significant reversal higher is in the cards, despite the gloomy sentiment seen recently. We were able to take profits on our short position today; I'll review that outcome and share my latest recommendations for our remaining trades.

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Which of the following sectors of the market do you think will outperform for the balance of 2014?

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