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3 Gold Miners With Low-Risk Buy Patterns

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3 Gold Miners With Low-Risk Buy Patterns

By Alan Farley | September 5, 2017 — 11:25 AM EDT

Gold and gold miners are gaining ground in reaction to the North Korean crisis as well as the continued failure of world economies to generate significant inflation, despite U.S. interest rate hikes. These tailwinds are likely to continue into 2018, underpinning recovery rallies that could eventually reach two- or three-year highs. Fortunately, the upside is developing at a relatively slow pace, giving late-to-the-party bulls plenty of time to get on board.

The gold mining sector has carved dozens of low-risk buy patterns in recent weeks, offering a broad array of short-term trading choices. At the same time, the Vaneck Vectors Junior Gold Miners ETF (GDXJ) has lifted above the 200-day exponential moving average (EMA) for the first time since April, highlighting rapid improvement at the low end of the capitalization spectrum. As a result, buying the fund or a basket of low-priced components with room to run could offer the strongest returns. (See also: GDXJ: Market Vectors Junior Gold Miners ETF.)

Eldorado Gold Corporation (EGO) stock topped out just above $20 in 2010 and tested that level one year later, ahead of a steep decline that ended in the first quarter of 2016 when it found support at a 13-year low under $2.00. It rallied above $5.00 in the second quarter and stalled out, building a small double top and breaking down in a decline that undercut the 2016 low in August. Committed buyers then emerged, triggering a 2B buying signal that denotes the failure of bears to defend a new resistance level.

The stock has been grinding higher in the past five weeks, while the monthly stochastics oscillator remains stuck at the most extreme oversold level since 2013. It will take little additional upside to flip the indicator into a buying cycle that supports continued gains into the $3.00 to $3.50 resistance zone. Market players may wish to withhold long exposure until the bounce clears the top of the unfilled July 31 gap at $2.23. (For more, see: Do Gold Miners Need to Look to Emerging Markets for Growth?)

Yamana Gold Inc. (AUY) shares topped out at $19.93 in 2008 and sold off to $3.31 during the economic collapse. The stock returned to resistance in 2012 and completed a double top, ahead of a severe decline that continued into the January 2016 13-year low at $1.38. The subsequent recovery wave stalled at a 21-month high in the third quarter, giving way to a slow-motion pullback that may have ended at the .786 Fibonacci sell-off retracement level in July 2017.

A bounce into September broke a six-month trendline​ of lower highs, improving the bearish technical tone while generating a test at the 200-day EMA. A breakout above that level would mark important progress that generates the next wave of buying signals, in turn favoring upside into the 2017 high at $3.65. Meanwhile, the monthly stochastics oscillator has now lifted into its first buying cycle since September 2016, predicting another six to nine months of relative strength. (See also: Yamana Gold to Spin Off Brio Gold Subsidiary.)

B2 Gold Corp. (BTG)came public on the U.S. exchanges at $1.25 in 2010 and lifted in a steady uptrend that ran out of gas near $4.50 in 2011. It built a two-year triple top at that level and broke down, entering a volatile downtrend that posted an all-time low at 60 cents in January 2016. The subsequent bounce displayed excellent relative strength into the third quarter, lifting the stock within one point of the 2012 high.

It then eased into a symmetrical triangle pattern that is still in force nearly 13 months later. A rally above $3.65 is needed to clear resistance, while selling waves need to hold range support near $2.20. The stock is now trading 60 cents or so above that level, offering a low-risk entry that could generate a sizable profit before a breakout that tests 2012 resistance. On-balance volume (OBV) has held close to the multi-year high throughout the consolidation, offering a stiff tailwind for an eventual uptrend. (For more, see: B2Gold Stock Upgraded at Dundee Capital.)

The Bottom Line

Junior gold miner stocks are ticking higher, with geopolitical tensions and weak inflation underpinning strong buy bids. These lower-priced issues may offer superior returns in this scenario, posting the next rally legs in long-term recovery waves. (For additional reading, check out: Strike Gold With Junior Mining.)

 

Published at Tue, 05 Sep 2017 15:25:00 +0000

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Overcoming Perfectionism in Trading

 

Overcoming Perfectionism in Trading

A reader recently asked the question of how to overcome perfectionism in trading.  Like many traders, the reader recognized that the quest for perfection was actually demoralizing him and leading him to trade worse and worse. Trying to buy the bottom tick and sell the top, he was missing trades. Losing money, he became his own worse critic.  Even when he made money, he found himself focusing on how he could have made even more by holding a little longer, sizing a little larger, etc. Slowly, perfectionism was stressing him out and interfering with his trading.

Sound familiar?  It’s a fine line between being success-driven and achievement oriented and being perfectionistic.  We want to keep pushing forward, but at some point the push becomes part of a problem, not a solution.

There are two keys to understanding perfectionism:

1)  It is a way of talking to ourselves;
2)  It is a way of channeling anger and frustration.

The perfectionist is channeling anger inwardly, looking at the gap between the real (actual performance) and ideal (possible performance) and becoming frustrated at that gap.  That is why so much perfectionistic thinking is of the “should” variety:  you *should* have held the trade longer; you *should* have been sized larger; you *should have taken the trade; you *shouldn’t* have taken the trade.  It’s all frustrated self-talk.

As I discuss in my books, we generally possess enough social sensitivity that we would *never* consider talking to a friend or colleague in the tone we use with perfectionistic self-talk.  We would never get in some one else’s face and tell them all the things they *should* and *could* have done better.  We would recognize right away that there is no constructive value in such talk.  It doesn’t help anyone move forward.

That is the key point to recognize:  there is nothing constructive about perfectionism.  It’s self-abusive; it doesn’t move us forward.  It’s a dumping of anger, not an effort to learn from mistakes.

Once the trader recognizes that the problem is not their trading, but their way of thinking about their trading, then they can begin the work of recognizing the frustration in real time, interrupting the perfectionistic thoughts, and introduce self-talk that is more similar to talk one would do with valued friends and colleagues.  

In practice, the sequence looks like:  “OK, I just lost money and I’m feeling frustrated.  I can feel myself getting caught up in *should* thinking.  That is the same perfectionism that has stressed me out and hurt my decisions.  I might have made a mistake, but I don’t deserve having anger dumped on me.  Before I take my next trade, I’m going to review what might have gone wrong with the last trade and see if I can learn anything from it that will help the next trade.  I refuse to keep talking to myself in a harmful way!”

Many times, keeping a cognitive journal is a great way of structuring this process and developing new, constructive habit patterns.  The Daily Trading Coach book describes this journaling in detail; see also the reading below.  Once we become aware of the *consequences* of negative thought patterns, we can truly *regret* them, and build a determination to not repeat them.  It is very healthy to focus on self-improvement:  we move ourselves forward when we try to become better.  We shut ourselves down when we demand more.

Published at Sat, 02 Sep 2017 13:04:00 +0000

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How to Become an Accredited Investor

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How to Become an Accredited Investor

By James Garrett Baldwin | Updated September 4, 2017 — 11:38 AM EDT

It takes money to make money, and accredited investors have more opportunities to do so than non-accredited investors.

That’s because the Securities and Exchange Commission (SEC) allows companies and private funds to skip the need to register certain investments as long as the firms sell these assets to accredited investors. Accredited investors are able to invest money directly into the lucrative world of private equity, private placements, hedge funds, venture capital, and equity crowd funding. However, the requirements of who can and who cannot be an accredited investor – and can take part in these opportunities – are determined by the Security and Exchange Commission.

There is a common misconception that a “process” exists for an individual to become a an accredited investor. No government agency or independent body reviews an investors credentials and no certification exam or piece of paper exists that states a person has become an accredited investor. Instead, the companies that issue unregistered securities determine a potential investor’s status by conducting diligence prior to sale.

This article breakdowns the requirements to become accredited investor, how to determine if you qualify and the screening process completed by investment managers to verify accredited investor status.

Who is an Accredited Investor?

Rule 501 of Regulation D of the Securities Act of 1933 (Reg. D) provides the definition for an accredited investor. Simply put, the SEC defines an accredited investor through the confines of income and net worth two ways:

  • “A natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year;
  • “A natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person.”

The last passage of the second bullet is critical because it is an important change that was introduced during the 2010 passage of the Dodd-Frank Act. Prior to the financial law’s passage, the primary residence was not excluded from determining a person’s net worth. Anyone who held accredited investments prior to the passage were grandfathered into the law.

Rule 501 also has provisions for corporation, partnerships, charitable organizations, and trusts, in addition to company directors, equity owners and financial institutions. However, the following formulas and screening processes are prepared for individuals or couples seeking the designation of being an accredited investor. (See also: What is required to become an accredited investor in a private placement?)

How to Determine if You’re Accredited?

Individuals who have earned $200,000 or more in income over the last two years automatically qualify as an accredited investor, as does a person whose income – when combined with a spouse’s – totals $300,000 or more.

An individual can also maintain a net worth of $1 million or more, minus the value of a primary residence. The only situation where the primary home can weigh on a net worth is when an investor has either an underwater mortgage or a balance on a home equity line of credit.

For an individual to determine if her or she qualifies as an accredited investor, they should create a personal balance sheet like the one below by subtracting the total number of liabilities against the total assets.

Allen Brian Carla
Primary Residence
Home Value $ 500,000 $ 500,000 $ 500,000
Mortgage $ 50,000 $ 300,000 $ 400,000
Home Equity Line $ 100,000
Assets
Bank Accounts $ 500,000 $ 500,000 $ 500,000
401k/IRA $ 300,000 $ 300,000 $ 300,000
Other Investments $ 400,000 $ 400,000 $ 400,000
Car $ 25,000 $ 25,000 $ 25,000
Total Included Assets $ 1,225,000 $ 1,225,000 $ 1,225,000
Liabilities
Student and vehicle loans $ 100,000 $ 100,000 $ 100,000
Other Liabilities $ 100,000 $ 100,000 $ 100,000
Underwater Mortgage $ 100,000
Balance of Home Equity Line $ 100,000
Total Included Liabilities $ 200,000 $ 300,000 $ 300,000
Net Worth $ 1,025,000 $ 925,000 $ 925,000

As noted in the example above, Allen qualifies as an accredited investor because his net worth is more than $1 million. However, both Brian and Carla do not qualify due to additional liabilities tied to their primary residence. In Brian’s case, he has a $100,000 home equity line that boosts his liabilities and drops his net worth below $1 million. Meanwhile, Carla’s underwater mortgage increases her liabilities and limits her net worth.

The Due Diligence

No formal agency or institution confirms the accreditation of an investor, and no certification is issued. However, since September 2013, the SEC has required that anyone selling to accredited investors must take a number of different steps in order to verify this status. Simply telling a firm or checking a box that signals a person is qualified is no longer allowed.

Individuals who feel they qualify can visit a fund and ask for information about potential investments. At this time, the issuer of securities will give a questionnaire to determine whether a person qualifies as an “accredited investor.” The questionnaire will also likely require the attachment of financial statements and information of other accounts in order to verify the ownership of assets listed on a balance sheet like the one above. Companies will also likely evaluate a credit report in order to assess any debts held by a person seeking accredited status.

Individuals who base their qualification on annual income will likely need to submit tax returns, W-2 forms and other documents that indicate wages. Individuals may also consider letters from reviews by CPAs, tax attorneys, investment brokers or advisors.

The Bottom Line

Accredited investors have the opportunity to invest in non-registered investments provided by companies like private equity funds, hedge funds, venture capital firms and others. But strict regulations from the SEC require that companies take a number of steps to confirm the status of an investor claiming accredited status. In order to quality, an accredited investor must surpass a certain annual income level for the two previous years or maintain a net worth above $1 million (minus the value of a primary residence).

 

Published at Mon, 04 Sep 2017 15:38:00 +0000

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New ETF plans to ‘make America great again’

 

New ETF plans to ‘make America great again’

NEW YORK (Reuters) – A planned index fund is hoping to “make America great again” by investing in companies that support the Republican Party.

The Point Bridge GOP Stock Tracker exchange-traded fund will list under the ticker “MAGA,” according to a filing with U.S. securities regulators this week, an apparent reference to the slogan repeatedly used by U.S. President Donald Trump.

A call to the fund’s sponsor, Point Bridge Capital LLC in Fort Worth, Texas, was not immediately returned. The company is planning a set of what it calls Politically Responsible Investing products.

Wall Street is building a growing number of products that cater to people hoping to express their social or political views when they invest. Current offerings include ETFs that reward companies with high gender diversity, strong environmental practices or those that meet certain religious standards.

The “MAGA” fund will invest in a group of S&P 500 .SPX companies with employees or political action committees that donate significant money to back Republican candidates for office. The data is based on public filings with the Federal Election Commission, according to the fund’s filings.

Annual expenses for the fund are at $72 a year for every $10,000 under management and it is expected to list on CBOE Holdings Inc’s (CBOE.O) Bats exchange.

A rival group, Active Weighting Advisors LLC in Cape Girardeau, Missouri, plans a Republican Policies Fund and a Democratic Policies Fund listed under the tickers GOP and DEMS.

Those funds are designed to perform better when the U.S. government is helped by each of the parties’ policies, according to filings. A spokesman for that company declined to comment.

The Republican Party, founded in 1854, is sometimes referred to as the Grand Old Party or GOP.

Reporting by Trevor Hunnicutt; Editing by Jennifer Ablan and Matthew Lewis

Our Standards:The Thomson Reuters Trust Principles.

 

Published at Thu, 31 Aug 2017 22:06:33 +0000

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Price Action in These ETFs Deserves Attention

 

Price Action in These ETFs Deserves Attention

By Cory Mitchell | August 31, 2017 — 1:00 PM EDT

Not every moment is a worthwhile time to trade. Depending on the strategy employed, the current price falls on a spectrum between between great entry point and horrible entry point. When the price is trading near a great entry point, that is obviously best, while a good entry is also acceptable if the potential reward still outweighs the risk. This is why watching price action is important, as it highlights those potentially good or great entry points.

Let’s start with the VanEck Vectors Russia ETF (RSX). After pulling back for most of 2017 from a prior uptrend, late August has seen the price surge, ending the pullback phase. From a longer-term perspective, the price could be commencing another major wave to the upside, which could unfold over the next several months to a year. The price was recently moving in a channel, which it has broken out of, providing an upside target of $23.50 or above. For an entry, catching a small pullback into the $20 region would be good, while an entry up near $21 (further away from the breakout) is not as good. This is because a stop-loss order can be placed below $19.50, so the difference in entry points dramatically affects the risk/reward of the trade. (See also: An Active Trader’s View on BRIC.)

Technical chart showing the VanEck Vectors Russia ETF (RSX) breaking out of a large channel

The Technology Select Sector SPDR Fund (XLK) has been consolidating for most of July and August. On Aug. 30, the price jumped 0.72% to close at $58.48. That is equal to the Aug. 16 intraday high. A closing price above $58.48, especially on a strong upside day, would signal a breakout from the consolidation and at least a short-term rally. The target is the top of the rising channel, near $62. The closer the entry point to the breakout, once it occurs, the better. Buying near $60 leaves little room before hitting the profit target, while purchasing near $58.50 leaves more room. With a stop-loss placed below $56.50, the lower entry provides a superior risk/reward ratio. However, it is worth noting that the risk/reward still is not ideal. The profit potential is just slightly larger than the risk. A good entry does not always mean the trade is worth taking if the risk/reward is not good. The pattern can also be used by those already in trades, as it provides an idea of where to look for an exit and potentially the level at which to trail the stop-loss. (For more, see: Two Sector ETFs to Buy in an Accelerating Economy.)

Technical chart showing the Technology Select Sector SPDR Fund (XLK) near breakout levels

The VanEck Vectors Semiconductor ETF (SMH) has also been consolidating for the past month and a half, just slightly below the June high of $89.72. Drawing a trendline​ along the swing highs of the consolidation reveals that the price broke out on Aug. 30. The breakout point was $87. Following prior breakouts in this long-term uptrend, the price has typically run between 8% and 14% higher. Using the 8% figure, the upside target is just below $94. Ideally, a stop-loss is placed below $84, but it could be placed near $85 to improve the risk/reward (although this would increase the chance of being prematurely stopped out). Once again, slight alterations to the entry and stop-loss can significantly affect the risk/reward. (For more, see: Top 5 Semiconductor ETFs.)

Technical chart showing the VanEck Vectors Semiconductor ETF (SMH) breaking out of a short-term pattern

The Bottom Line

RSX broke out of a large pattern recently, and depending on the entry point, the ETF may present a high reward-to-risk opportunity. XLK and SMH offer upside potential, but whether or not the trade is worth taking depends on the entry and stop-loss levels. If the reward does not justify the risk, the trade should be skipped. Risk/reward ratios utilize a profit target, which is a way of assessing trades as part of a strategy and is not meant to be a predication of exactly where the price will go. Losing trades happen, so it is important to risk only a small portion of account capital on any given trade. (For additional reading, check out: Strategies to Trade the Risk-Reward Equation.)

Charts courtesy of StockCharts.com. Disclosure: The author does not have positions in the ETFs mentioned.

 

Published at Thu, 31 Aug 2017 17:00:00 +0000

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Gilead Rally Isn’t Fully Warranted: Morgan Stanley

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Gilead Rally Isn’t Fully Warranted: Morgan Stanley

By Shoshanna Delventhal | August 31, 2017 — 4:34 PM EDT

As shares of biopharmaceutical company Gilead Sciences Inc. (GILD) continue to soar on news regarding the approval of a CAR-T treatment from Novartis AG (NVS) on Tuesday and Gilead’s acquisition of Kite Pharma Inc. (KITE) on Monday, one team of analysts finds the mixed reaction in pharma stocks rather puzzling.

Morgan Stanley’s Matthew Harrison and team indicate that while a bump in Foster City, Calif.-based Gilead’s shares following its $12 billion acquisition of Kite Pharma was expected due to investor speculation regarding increased strategic interest in the CAR-T space, the mixed reaction in stocks following Novartis’ approval may be unwarranted.

Shares Up on CAR-T Approval

Investors sent Juno Therapeutics Inc. (JUNO) falling on Tuesday, recovering 4.8% as of Thursday afternoon at $42.22 per share and reflecting a 37.3% rally this week. Gilead continues to surge after facing no pullback on Tuesday, up 2.3% on Thursday at $83.07 per share and reflecting a 12.5% jump this week. Biotechnology company Bluebird Bio Inc. (BLUE) has rallied more than 26% this week, up 10% on Thursday at $123.70 per share. (See also: Juno Stock Continues Breakout After Gilead Buys Kite.)

“Novartis outcomes-based pricing is a slight negative to the group, esp. for indications where responses are low (like DLBCL [diffuse large B-cell lymphoma]). Thus, it makes sense that JUNO saw some pressure in light of the sig. move higher this week and BLUE closed the gap with JUNO as BCMA response rates high,” wrote Harrison, speaking to B-cell maturation antigen response rates.

The analysts reiterated their perspective that initial DLBCL sales in 2018 will likely drive street sentiment for Gilead, Novartis and its peers. “We expect near-term volatility to continue as sentiment swings, but do not see greater clarity until 2018,” wrote the Morgan Stanley analysts. (See also: Why Gilead’s Acquisition of Kite Is Not Enough.)

 

Published at Thu, 31 Aug 2017 20:34:00 +0000

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Why Utility Stocks Are Looking So Attractive

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Why Utility Stocks Are Looking So Attractive

Max Ganik August 30, 2017

Published at Wed, 30 Aug 2017 14:48:00 +0000

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Upbeat U.S. growth revision drives Wall Street higher

 

Upbeat U.S. growth revision drives Wall Street higher

NEW YORK (Reuters) – U.S. stocks rose on Wednesday after stronger-than-expected U.S. economic growth outweighed concerns about escalating tensions between the United States and North Korea and uncertainty in the aftermath of Hurricane Harvey.

Gross domestic product was revised higher to show a 3.0 percent annual growth rate in the second quarter, due partly to robust consumer spending as well as strong business investment.

Adding to the positive sentiment, U.S. private-sector employers beat economists’ expectations as they hired 237,000 workers in August, marking the biggest monthly increase in five months.

“I have doubts how sustainable the macro economy is, but perceived fundamentals are still okay. GDP confirmed that,” said John Velis, macro strategist at State Street Global Markets in Boston.

“You can come up with plenty excuses to remain (invested) in the market.”

President Donald Trump said he wants to see the U.S. corporate tax rate drop to 15 percent but the White House offered no new tax plan, leaving the proposal in the hands of Congress. Tax reform was one of Trump’s main talking points during his campaign and expectations for its passage have been a main driver of stock gains since he won the presidency.

The Dow Jones Industrial Average .DJI rose 27.06 points, or 0.12 percent, to end at 21,892.43, the S&P 500 .SPX gained 11.29 points, or 0.46 percent, to 2,457.59 and the Nasdaq Composite .IXIC added 66.42 points, or 1.05 percent, to 6,368.31.

The Nasdaq closed within 1 percent of its record closing high set in late July.

Tensions between the United States and North Korea seemed to escalate after Trump dismissed any diplomatic negotiations via a tweet, saying “talking is not the answer,” a day after Pyongyang fired a ballistic missile that flew over Japan.

However, Defense Secretary Jim Mattis later said the United States still has diplomatic options.

H&R Block (HRB.N) fell 8.3 percent to $26.81 after the tax preparation service provider reported a bigger-than-expected loss.

Aerovironment (AVAV.O) rose 18.2 percent to $46.52 after the drone maker reported a smaller-than-expected loss and revenue that beat estimates.

Analog Devices (ADI.O) closed up 5.2 percent at $83.72 after the chipmaker’s quarterly earnings and forecast exceeded expectations.

Advancing issues outnumbered declining ones on the NYSE by a 1.66-to-1 ratio; on Nasdaq, a 1.69-to-1 ratio favored advancers.

Some 376 U.S.-traded issues posted new 52-week highs and there were 245 new lows. Highs were well below their average over the past year while lows were slightly above theirs.

About 5.12 billion shares changed hands in U.S. exchanges, below the 5.84 billion daily average over the last 20 sessions.

Reporting by Rodrigo Campos; Editing by James Dalgleish

Our Standards:The Thomson Reuters Trust Principles.

 

Published at Wed, 30 Aug 2017 20:29:55 +0000

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Apple Suppliers Catch Bid After Analog Devices Results

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Apple Suppliers Catch Bid After Analog Devices Results

By Alan Farley | August 30, 2017 — 11:52 AM EDT

Shares of Apple Inc. (AAPL) supplier Analog Devices, Inc. (ADI) gained more than 5% in the first hour of Wednesday’s session after the company beat fiscal third quarter profit and revenue estimates while raising fourth quarter guidance. The bullish results should generate a steady tailwind for the broad swath of companies that make iPhone components, especially with the iPhone 8 set for release in September or October.

These symbiotic issues have underperformed their benefactor throughout 2017, with the biggest names trading well below their 2017 highs while Apple stock grinds out a series of all-time highs. This laggard behavior suggests that product lines outside the iPhone universe have weighed on results, which makes sense given the highly commoditized nature of the semiconductor business. (For a refresher, see: The Industry Handbook: The Semiconductor Industry.)

Analog Devices stock topped out at $103 in 2000 and entered a multi-year downtrend that finally bottomed out in the mid-teens in 2008. The stock returned to resistance at the 2004 swing high just above $50 in 2013 and broke out one year later, making steady progress into the May 2017 high at $90.49. It then reversed on heavy volume and sold off in a rounded correction that tested 200-day support for nearly three months.

The post-news reaction has broken the trendline of lower highs in place since June 2017 and reached the 50% sell-off retracement level above $83. The rally wave is likely to stall between that level and the .618 retracement at $85, giving way to a broader basing pattern before it tackles the multi-year high in the low $90s. Meanwhile, pullbacks to new trendline support in the $80 to $81 price zone should now offer low-risk buying opportunities. (See also: Analog Devices Beat Earnings and Revenues in Q3.)

Cirrus Logic, Inc. (CRUS) shares posted an all-time high at $61.13 in 1995 and entered a persistent decline that ground out lower lows into the October 2002 all-time low at $1.47. The stock lagged badly during the mid-decade bull market, struggling in the lower third of its multi-year trading range, and posted a higher low during the 2008 economic collapse. The stock finally completed a 100% round trip into the prior century’s high in January 2017.

Cirrus Logic stock broke out in April, hitting an all-time high at $71.97 in June before turning sharply lower, dropping into new support in the low $60s. An early August plunge completed a failed breakout that reached a five-month low last week, while this week’s news has completed a three-week basing pattern. This reversal should support a relief rally into new resistance, which is likely to deny bulls into the fourth quarter. iPhone hype at that time could then yield an even stronger recovery wave. (For more, see: 2 Suppliers Dependent on Apple for a Majority of Revenue.)

Skyworks Solutions, Inc. (SWKS) shares stalled at $78.25 in 2000 following a multi-year uptrend and sold off to $2.89 in 2002. The stock underperformed throughout the mid-decade bull market and tested the multi-year low in 2009, grinding out a long-term double bottom reversal. The subsequent uptick reached the prior decade’s high in February 2015, giving way to a second quarter breakout to an all-time high at $112.88, followed by a rounded correction that found support in the upper $50s in 2016.

Sellers took control after a steady recovery wave reached 2015 resistance in June 2017, dumping the stock to a three-month low, ahead of consolidative price action between June’s high and low. The stock struggled at the 50-day exponential moving average (EMA) into this week’s news and has turned higher but not broken key resistance now centered at $103.50. As a result, interested market players should keep their powder dry, focusing on today’s other entries or stalking this chart until price action sets off buying signals with a breakout toward $105. (See also: Chip Stocks Not Finished Yet, More Room to Run.)

The Bottom Line

Apple suppliers are gaining ground this week after Analog Devices reported surprisingly strong quarterly results while raising forward guidance. This bullish price action could mark the start of a long-term rally for the group, with many components set to hit new highs in the triple digits. (For additional reading, check out: Top 5 Semiconductor ETFs.)

 

Published at Wed, 30 Aug 2017 15:52:00 +0000

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Google Brings AR to New, Existing Android Devices

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Google Brings AR to New, Existing Android Devices

By Donna Fuscaldo | August 29, 2017 — 9:06 PM EDT

Taking a page from Apple Inc. (AAPL), Alphabet Inc.’s (GOOG) Google announced a new developer tool aimed at getting more augmented reality applications on new and existing Android mobile devices.

In a blog post, Dave Burke, Google’s VP of Android engineering, said the company has been developing the technologies to run mobile AR over the last three years via Tango, its 3D mapping system and its new tool, ARCore, builds on that. Tango relied on cameras and sensors for AR, requiring hardware upgrades from Android smartphone makers. Its new tool doesn’t require costly investments on the part of its mobile phone partners since it works with any hardware. (See also: Google Is Buying the Creator of a Selfie-Editing App.)

“ARCore will run on millions of devices, starting today [Aug. 29] with the Pixel and Samsung’s S8, running 7.0 Nougat and above. We’re targeting 100 million devices at the end of the preview. We’re working with manufacturers like Samsung, Huawei, LG, ASUS and others to make this possible with a consistent bar for quality and high performance,” Burke wrote in the blog post. The software aids mobile apps and websites in tracking and overlaying physical objects in virtual worlds.

AR All Around

Earlier this summer, rival Apple launched its own AR developer platform, ARKit. Using the tool, developers can incorporate AR into their applications and services. Google’s new tool is seen as a way to counter that as all of the technology heavy hitters are going after this burgeoning market. According to a Bloomberg report, Apple should have a better chance at getting developers to create AR apps because it can easily push out a software update for its billions of devices. Google has to work with Android software companies and hardware manufacturers to get them to use ARCore. Bloomberg noted that while the Android handset makers don’t need to use advanced camera technology, they do have to have embedded cameras that have built-in sensors in order for the software to work. That may limit adoption if they balk at adding that extra cost to their mobile devices. (See also: Why Apple’s ARKit Could Be a Game Changer.)

The market for AR has been slow to take off, although expectations are high it could morph into a big opportunity. According to Digi-Capital, a VR/AR M&A adviser, the mobile AR market could be worth $108 billion by 2021. The technology is already estimated to have hit $1.2 billion in revenues last year, primarily due to the success of Pokemon Go. In the blog post, Burke said that in addition to developing ARCore, Google has been investing in apps and services to help developers create AR experiences. The company is also working on a Visual Positioning Service, which will enable AR experiences beyond a tabletop, and is also releasing a prototype browser for web developers. The custom browsers let developers create AR-enhanced websites, Burke said, noting “ARCore is our next step in bringing AR to everyone.”

 

Published at Wed, 30 Aug 2017 01:06:00 +0000

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The Power of Regret in Trading

The Power of Regret in Trading

One of the more fascinating phenomena in trading psychology is that traders will trade poorly, miss opportunities, and lose money–and then they will proceed to do exactly the same things the next day and the next week. Finally, hurting from the losses, they seek psychological assistance.  But is the problem primarily one of psychology?
 
A close look finds that traders commonly respond to losses in two ways:  
 
1)  As frustrating events, inevitable but difficult to experience and important to move beyond;
2)  As mistakes, to be noted and learned from.
 
Not uncommonly, traders will respond in the first way and then transition to the second in order to put losses and missed opportunities behind them.
 
Then, having placed the experience behind them, the traders repeat the exact same behaviors!
 
Why?  Haven’t they done the right things, psychologically?
 
Let’s imagine a different situation.  Suppose you unwittingly hurt the feelings of someone you love and damage their reputation.  Or suppose you are entrusted with the care of young children and feed them improperly, causing great and painful illness.  How would you respond?  Would you simply deal with it as an annoying, frustrating event?  Of course not. Would you respond by merely keeping a journal and jotting down a lesson to be learned?  I don’t think so.
 
If you truly hurt people you cared for, you would feel deeply guilty.  You would be overcome with regret and you would beg their forgiveness.  You would not deal with the situation as a mere psychological issue.  You would respond to it spiritually: as something profoundly wrong requiring repentance.  You would be unlikely to repeat the hurtful situations, because your sense of regret would sear into your heart and mind a commitment to be more aware and sensitive in the future.
 
We commonly view guilt as a negative emotion to be overcome.  We view “guilt trips” as things to be avoided.  It is not by coincidence, however, that all major religions incorporate the ideas of sin, guilt, and atonement.  It is also not by coincidence that programs such as AA emphasize moral inventories and making amends for the damage created by addiction.  We don’t change because we’re frustrated by a behavior, and we don’t change because we treat that behavior as an error.  We change because we feel horror, regret, and disgust at what we’ve done and the damage we’ve created.  We move on, not by minimizing our behavior, but by fully connecting with the consequences of that behavior and then proceeding, in all sincerity, toward forgiveness.  
 
Alcoholics who hurt their health, hurt their friends, hurt their career opportunities, and hurt their spouses and children–and who don’t view all that with absolute regret and an absolute desire to change–those are alcoholics at risk for relapse.  Traders who lose their money, miss opportunities in life and in markets, who fail to support families that count on them–and who don’t look at that with a deep feeling of guilt and responsibility–those are the traders who will continue the error of their ways.
 
All the psychological techniques in the world can’t help someone who doesn’t perceive and deeply feel the need for transformation.  Pain alerts us to a situation in our body that needs to be evaluated and treated.  In that context, pain is an important part of health.  Guilt and regret are pain of the spirit. They are telling us we have been on the wrong path. That can be a very constructive element in our development.
Published at Sat, 26 Aug 2017 13:41:00 +0000

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10 Habits of Successful People

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10 Habits of Successful People

By Jim Probasco | Updated August 29, 2017 — 8:05 AM EDT

Aside from the random element of luck, much of what makes some people successful involves the cultivating of certain habits. Learning what these habits are and how to employ them in your own life is worthwhile.

To that end, here are 10 of the most often-cited habits of successful people.

1. Organization

One of the most frequently mentioned habits of those who are successful in life is organization. Organization includes planning as well as setting priorities and goals.

Joel Brown, founder of Addicted2Success.com, calls for a prioritized “To-Do List” every evening before going to bed to prepare for the next day.

According to Twitter co-founder Jack Dorsey, Sunday is an important day for organization and a time to “get ready for the rest of the week.”

2. Relaxation

It’s interesting to note that relaxing – by meditating or simply avoiding distractions – is another of the most-often mentioned habits of successful people.

Of course, relaxation comes more easily to those who are organized, so perhaps for some it is more of a natural byproduct than a conscious decision.

It may also be that the act of “taking a breath” is the successful person’s way of preparing for the effort yet to come. In fact, one of the first steps toward achieving a meditative or relaxed state is to concentrate on your own breathing for three to five minutes.

3. Taking Action

Third on the list of habits of successful people is the inevitable “action” habit. It is important to organize, to plan and to set priorities, but without action, a plan is nothing more than potential.

Successful people act – quickly and often. In addition, although it may sound counterintuitive, according to James Clear, they act (start, anyway) before they feel ready. While others come up with reasons not to act, successful people take that all-important first step – even if it seems outlandish.

4. Personal Care

Personal care with regard to diet, exercise and hygiene comes next on the list of habits of those who are successful.

For some, personal care involves a complex regimen and a highly disciplined lifestyle. For others, not so much. Elon Musk, the CEO of Tesla Motors, put it succinctly when asked what daily habit has had the largest positive impact on his life. In a tweet, Musk said simply, “Showering.”

5. Positive Attitude

According to many successful people, having a positive attitude is not just a result of being successful – it’s one of the root causes of success.

Joel Brown refers to gratitude and positive self-talk as priorities in the lives of the ultra successful. Moreover, Brown says, it’s not enough to express gratitude and a positive attitude. You must also remind yourself why you are grateful in order to achieve a deeper effect.

6. Networking

Successful people know the value of exchanging ideas with others through networking. They also know the value of collaboration and teamwork – all of which are likely when you network.

Successful people know the importance of surrounding themselves with other successful people, according to author Thomas Corley. Corley says 79% of wealthy (successful) people spend at least five hours a month networking. By contrast, only 16% of poor (unsuccessful) people network on a consistent basis. (See also: 10 Tips for Strategic Networking.)

7. Frugality

Frugal is not the same as stingy. Frugality is a habit of being thrifty, with money and resources. It is also a habit of being economical. Learning to be economical comes through avoiding waste, which automatically results in efficiency.

Corley notes that wealthy, successful people avoid overspending. Instead they comparison-shop and negotiate. The result, according to Corley, is financial success through the simple act of saving more money than they spend.

8. Rising Early

The more time one can devote to being successful, the more likely success will result. Successful people are accustomed to rising early, and that habit appears repeatedly among those who do well in life.

While the “Early Riser’s Club” has a huge membership among successful people, a few notable members include Sir Richard Branson of Virgin Group, Disney CEO Robert Iger and Yahoo’s Marissa Mayer. (See also:How did Richard Branson make his fortune?)

9. Sharing

Whether through donating to charity or the sharing of ideas, successful people have a habit of giving. They know the value of sharing and most believe their success should result in something more than the accumulation of wealth for themselves.

Some of the most well-known successful philanthropists include Bill and Melinda Gates, Oprah Winfrey and Mark Zuckerberg.

Lack of wealth does not need to be a factor when it comes to sharing. Volunteering in your community or at a local school does not cost anything but could provide help where it is needed most, as KeepInspiring.Me points out. (See also: Retirement Tips: Choose The Best Charity Annuity).

10. Reading

It’s important to note that successful people read. While they also read for pleasure, most use their reading habit as a means to gain knowledge or insight.

For anyone who needs inspiration about the value and importance of reading, look no further than the example of billionaire author, J.K. Rowling, who says she read “anything” as a child. She advises, “Read as much as you possibly can. Nothing will help you as much as reading.”

The Bottom Line

Most people have habits – some are positive, some are not. Successful people tend to have more of the kinds of habits that contribute to their success.

The good news, for those who wish to be successful, is that cultivating positive habits takes no more effort than developing bad ones.

Some of the best habits of successful people involve only conscious effort, like getting up early every day. Others, such as becoming organized, may take a little more skill and practice but ultimately result in the most desired outcome of all – success.

 

Published at Tue, 29 Aug 2017 12:05:00 +0000

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S&P, Dow flat as investors weigh impact of Harvey

S&P, Dow flat as investors weigh impact of Harvey

(Reuters) – The Dow and the S&P were unchanged in late-morning trading on Monday with losses in insurance and oil stocks offset by gains in shares of health and home improvement retail chains as investors assessed the impact of Tropical Storm Harvey.

The uncertainty pushed investors toward safe-haven assets, with U.S. Treasuries holding steady ahead of the employment data on Friday, while gold rose to its highest in more than a week.

“What it tells you is a slight risk-off trade. But nothing that is really shaking up the markets,” said Matt Lloyd, chief investment strategist at Advisors Asset Management.

Harvey – the most powerful hurricane to strike Texas in more than 50 years when it came ashore on Friday – dumped more rain on Houston on Monday, worsening the flooding that has paralyzed the country’s energy hub.

Harvey has knocked out a quarter of oil production from the Gulf of Mexico, prompting fears it could overturn years of excess U.S. oil capacity and low prices. [O/R]

U.S. crude futures CLc1, dipped 2.4 percent to $46.72 over concerns that the refinery shutdowns could reduce demand for American crude.

The energy sector’s .SPNY 0.82 percent loss led the decliners among the 11 major S&P 500 sectors.

Oil majors Exxon (XOM.N) and Chevron (CVX.N) were down about 0.5 percent. Refiner Phillips 66 (PSX.N) rose 0.44 percent and Valero Energy (VLO.N) climbed 1.20 percent.

“We’re looking at this as more of a shorter term phenomenon and the energy stocks have held in relatively well,” said Matt Miskin, market strategist at John Hancock Investments.

“The market is not seeing that as a significant move but we’ll have to see how the dynamics play out over the course of the week.”

U.S. economic growth had more than halved in the quarter after Hurricane Katrina mauled Louisiana in August 2005.

At 10:56 a.m. ET (1456 GMT), the Dow Jones Industrial Average .DJI was down 9.76 points, or 0.04 percent, at 21,803.91, the S&P 500 .SPX was up 2.74 points, or 0.11 percent, at 2,445.79.

The Nasdaq Composite .IXIC was up 24.59 points, or 0.39 percent, at 6,290.23, helped by a rise in Apple (AAPL.O) and Facebook (FB.O).

Home Depot (HD.N) was up 1 percent, while Lowe’s (LOW.N) rose 0.52 percent as investors expected the two largest U.S. home improvement chains to be among the biggest beneficiaries of post-Harvey recovery.

Insurers Travelers (TRV.N) fell 2.74 percent, dragging on the Dow, while Allstate (ALL.N) was off 1.39 percent and Progressive (PGR.N) was down 2.44 percent.

Kite Pharmaceuticals (KITE.O) soared 28.40 percent after Gilead Sciences (GILD.O) agreed to buy the immunotherapy developer in a deal valued at $11.9 billion. Shares of Gilead gained 1.87 percent.

Expedia (EXPE.O) fell 4.37 percent after an internal memo by the online travel services company said its CEO, Dara Khosrowshahi, has been asked to lead Uber [UBER.UL].

Declining issues outnumbered advancers on the NYSE by 1,452 to 1,244. On the Nasdaq, 1,387 issues rose and 1,282 fell.

Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila

Our Standards:The Thomson Reuters Trust Principles.

 

Published at Mon, 28 Aug 2017 15:37:17 +0000

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Turning Trading Anxiety Into Growth

Turning Trading Anxiety Into Growth

Here is a powerful psychological technique that I learned from a wise therapist I saw when I was in graduate school.

Identify clearly what makes you nervous, uneasy, fearful, or anxious.  Typically, those will be situations that you find yourself avoiding.  Anxiety is a form of psychological pain. No one likes pain, and so it’s often easiest to avoid the situations that make us uncomfortable.

A good trading example would be bumping up your trading size and hence your risk-taking.  You’ve been doing well in different market conditions and would like to take greater advantage of your edge in markets.  Increasing the size of your trades, however, will increase the P/L swings for each trade, each day, and each week.  That is not necessarily comfortable.  So we may find ourselves making excuses, avoiding the situation that makes us nervous.

The therapist I met with in Kansas specialized in dream interpretation, so much of our discussion centered on my dreams from the past week.  One dream was that I was on a playground, climbing a tall slide.  At the top of the slide was a lever.  You could set the lever anywhere from 1-10.  I realized that the setting would determine how fast you went down this large slide.  I decided to be prudent in the dream and selected a “5” setting.  

Now I should mention that the issue that brought me to therapy was feeling “blah” in my life.  I didn’t feel all that much excitement about what I was doing and felt that the resulting malaise was keeping me from doing my best in all situations, from school work to relationships.

The therapist quickly perceived that the dream image of the slide with the lever was a creative metaphor for my life at the time.  I was going down the slide, but keeping my descent safe and predictable.  Perhaps it was time to try a higher setting on the slide.

That’s when the therapist offered a keen perspective.  She said that, if you’re not a person with an actual pathological anxiety disorder, your fears point the way toward your growth.  We grow by embracing and pursuing what makes us anxious.  The reason for this is that we always grow by extending our boundaries, by going beyond our natural comfort zones.  Whenever we forge new territory and push our self-defined limits, that’s scary, that’s the unknown.  

The implication is profound:  we tend to avoid what makes us uncomfortable, and our discomfort tends to occur in those areas where we most need to grow.  If you find yourself procrastinating, avoiding, nervously setting your life’s challenges at a comfortable “5”, those are the areas to pursue. In mastering those fears, we find the person we’re meant to be.

And the ride down life’s slide becomes a helluva lot more fun.

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Published at Sun, 27 Aug 2017 15:59:00 +0000

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Risk of sharp currency moves drives investors into hedged ETFs

Risk of sharp currency moves drives investors into hedged ETFs

LONDON/NEW YORK (Reuters) – Investors have been piling into currency-hedged equity tracker funds, seeking protection against big moves in foreign exchange rates.

Typically foreign investors buy un-hedged equities since share prices are usually negatively correlated to currencies. In fact, they offer a partial hedge against sharp moves in foreign exchange.

But with most equity markets near record highs and major currencies notching up double-digit gains or losses this year, investors are taking no chances.

Exchange-traded funds trade like stocks but track a wider range of securities more cheaply than buying the underlying assets. With a currency-hedged ETF, an investor pays an additional cost for hedging the foreign exchange risk, often using currency forwards or options.

“ETFs are becoming a tool also to manage currency,” said Simone Rosti, European head of passive and exchange-traded fund sales at UBS.

Investors poured some $17 billion into currency-hedged equity ETFs globally to the end of July, a sharp turnaround from the $9.1 billion of outflows seen in the same period last year.

Currency-hedged ETFs are relative newcomers and still just a drop in the ocean. They make up just $127 billion of the $3.3 trillion assets under management in equity ETFs as a whole, according to industry group ETFGI.

But their growing importance underlines the impact currency moves can have on portfolio returns.

“The performance of an equity market relative to the global benchmark can be dominated by movements in the country’s currency,” said Mark Richards of JPMorgan Asset Management.

A U.S. investor holding an MSCI Europe tracker, for example, has enjoyed returns of 15.5 percent year-to-date in dollars, while the index has gained just 3.2 percent in euro terms.

FX HEDGES

ETF providers say flows into hedged products often increase just after a big swing in a currency or when market positioning shows a preponderance of investors betting a currency will move in one direction.

For example, the euro has gained more than 12 percent so far this year and is the best performing G10 currency.

Flows into currency-hedged ETFs tracking European equities in 2017 have far outpaced last year as brokers and investors have warned in recent weeks that the euro’s rise could start to threaten the bright outlook for profits of European companies.

In the first seven months of this year investors poured $1.3 billion into these products, compared with $9.2 billion of outflows in the same period last year.

“We’ve started to see many clients moving to euro-hedged products. We see this trend continuing in the next few months,” said UBS’s Rosti.

ETFs hedged to the single currency saw a dramatic increase in inflows in April as concerns around the French election faded. They drew in $638 million that month after managing just $6 million in March.

Similarly, since the pound’s dramatic slide on the day after Britain’s Brexit vote in June 2016, the benchmark UK stock index has hit record highs as the British-based companies with large global footprints benefited from favourable currency translation boosting earnings.

Sterling fell to its lowest against the euro in eight years this week, barring a brief flash crash in October 2016 and analysts say investors are reaching for hedged ETFs to protect against a possible rebound in the pound.

Deutsche Asset Management ETF strategist Eric Wiegand said ETFs hedged against sterling are their best-selling product so far this year.

TURNING FORTUNES

While the cost of hedging foreign equity exposure can be substantial even for relatively low-cost ETFs, amounting to anything between 1 to 2 percent, investors say these products can offer valuable savings especially when markets lean towards consensus views.

For example, at the end of last year, expectations that U.S. President Donald Trump’s fiscal plans would fuel a strong dollar and prompt the Federal Reserve to raise interest rates multiple times were very popular.

But those expectations have been squashed in recent months and bets the greenback will weaken have multiplied.

Inflows into currency-hedged ETFs exposed to the United States also ballooned this year, drawing in $5.9 billion so far – already ahead of the $5.3 billion net inflows for the full year 2016.

“Is this really the time, now that the dollar has moved, that you want to go unhedged? I’d really question that,” said Jeremy Schwartz, director of research at WisdomTree Asset Management, adding U.S. investors should consider protecting against a potential rise in the dollar.

DOUBLE HEDGING

But some remain sceptical about the need for ETFs to hedge currency exposure when large multinational companies run sophisticated treasury operations that use a variety of instruments to protect themselves against currency swings.

“Buying a hedged ETF hedges the currency exposure of companies that are already hedging,” wrote Vincent Deluard, head of global macro strategy at INTL FCStone, a brokerage, in a note to clients. “Double-hedging achieves nothing other than generate extra fees and commissions.”

Though a hedge can drive outperformance during a currency shock, in the medium to long-term the performance differential between hedged and unhedged ETFs tracking the same index diminishes.

Then there are other asset classes such as fixed income where investors see more value of an FX-hedged ETF to cushion the blows from a volatile currency on tiny but steady returns from coupon payments on bonds.

(This version of the story adds title of Jeremy Schwartz)

“Right now, if we look at our asset split, the proportion of flows into currency-hedged ETFs is larger in the fixed income space,” said Deutsche’s Wiegand. Some 37 percent of Deutsche Asset Management’s year-to-date net inflows in fixed income ETFs went into hedged products, while just 21 percent of their equity inflows were hedged.

Reporting by Helen Reid, Saikat Chatterjee and Trevor Hunnicutt Editing by Jeremy Gaunt

Our Standards:The Thomson Reuters Trust Principles.

 

Published at Fri, 25 Aug 2017 13:27:11 +0000

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Cash is king for U.S. fund investors wary of stocks

Cash is king for U.S. fund investors wary of stocks

NEW YORK (Reuters) – Investors socked savings away and opted against loading up on U.S. stocks during the latest week, Lipper data for U.S.-based funds showed on Thursday.

Money market funds, designed to hold their cash value even when markets falter, attracted $24.6 billion during the week ended Aug 23. The products are on pace for their largest monthly inflows since December 2012, having drawn $69 billion already during August, Lipper said.

Stock mutual fund and exchange-traded fund withdrawals were $3.4 billion, according to the weekly data.

Investors’ risk-averse shift came as the S&P 500 was hit by a 1.5 percent selloff last Thursday, the kind of setback that has grown increasingly rare as U.S. stocks prepare to claim a ninth straight year of positive total returns.

Investors are wary of whether tax reform and other promised U.S. government policies will come to fruition and lift markets further, said Pat Keon, senior research analyst for Thomson Reuters’ Lipper unit. A late-September deadline also loomed for U.S. officials to raise the amount of money the government can borrow, or risk default.

“People are taking money out of play,” said Keon, “waiting to see what happens before they invest.”

Meanwhile, once-popular bets on rising rates and inflation are fading as monetary policymakers convene for a summit in Wyoming.

Central bankers have kept developed economies’ interest rates near historic lows to stoke growth, and inflation has fallen short of levels that would push them to make a drastic change. Rising inflation and rates hurt a bond’s value.

Yet funds invested in certain types of bonds that gird against rising prices posted $300 million in outflows during the week, the most withdrawn since June 2016.

Loan participation funds, invested in debt that actually yields more when rates rise, recorded $377 million in weekly outflows, also their largest withdrawals in about 14 months.

Fund flows show more confidence in high-rated bonds and international stocks than in domestic stocks.

Non-domestic equity funds, which attracted $996 million in the latest week, have recorded outflows just four weeks this year, according to Lipper. Investment-grade debt funds have not seen a single week of outflows in 2017, pulling in $3.3 billion during the latest seven-day period.

By contrast, domestic stock funds posted $4.4 billion in weekly withdrawals. Technology sector funds posted $427 million in outflows, their first withdrawals in seven weeks. High-yield bond funds recorded $1 billion in outflows, Lipper said.

Reporting by Trevor Hunnicutt; Additional reporting by Kimberly Chin; Editing by James Dalgleish and Andrew Ha

 

Published at Fri, 25 Aug 2017 01:06:15 +0000

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Jeweler Stocks in Rally Mode After Strong Quarters

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Jeweler Stocks in Rally Mode After Strong Quarters

By Alan Farley | August 24, 2017 — 10:02 AM EDT

Tiffany & Co. (TIF) and Signet Jewelers Limited (SIG) reported solid second quarter results on Thursday morning, lifting off summer lows in recovery waves that could pick up steam in coming weeks. Signet’s results look stronger than those of its rival at first glance, beating quarterly estimates while raising fiscal year 2018 guidance. Tiffany also beat quarterly expectations, but revenue contracted year over year, and the company failed to raise annual projections.

The results confirm healthy consumer buying interest in the luxury segment, with folks at the top end of the financial spectrum spending freely. It matches broad optimism about tax cuts under the Trump administration, despite the lack of progress on the president’s economic agenda since he took office in January. Even so, both stocks will need weeks or months of higher prices to break long-term resistance levels and reach new highs. (For more, see: Jewelers Gaining Ground in Tough Retail Tape.)

Tiffany stock topped out at $57.34 in October 2007 following a multi-year uptrend and plunged into the mid-teens during the 2008 economic collapse. The subsequent bounce completed a round trip into the prior high in the fourth quarter of 2010 and broke out six months later, but momentum buying interest failed to develop. Choppy sideways action then took control, persisting into 2013, when the stock took off in a healthy advance that posted a series of new highs. (See also: Tiffany Stock Shines on Q2 Earnings Beat, View Intact.)

The uptrend hit an all-time high at $110.60 in December 2014, giving way to a correction that ended at a three-year low at $56.99 in June 2016. It completed a double bottom reversal five months later, breaking out in a recovery wave that stalled within two points of the .786 Fibonacci sell-off retracement level in April 2017. A July test at that harmonic barrier triggered a reversal and sell-off that found support at the 200-day exponential moving average (EMA) just ahead of this week’s bullish report.

Short-term traders looking for technical guidance should focus their attention on retracement levels generated by the four-week sell-off. This analysis highlights resistance just above $90, where the .386 retracement and broken range support have narrowly aligned. The stock is trading near $91 in the pre-market, suggesting a bullish platform for continued upside into $93, but price action during the regular session could alter that view. (For more, see: Goldman Sachs: Tiffany & Co. Is a Solid Gold Bet.)

Signet Jewelers shares topped out the low $50s in 2007 and were hurt badly during the bear market, and the company was forced to issue a one-for-two reverse split to maintain liquidity. The stock bottomed out at $5.91 in the first quarter of 2009 and entered a recovery wave that completed a round trip into the prior high in 2011. A narrow consolidation at that level yielded a healthy 2012 breakout and trend advance, lifting the stock into the October 2015 all-time high at $152.27.

The stock sold off into 2016, building a descending channel that has controlled price action into the third quarter of 2017. Selling pressure eased at a four-year low in the mid-$40s in June 2017, giving way to a bounce that failed at the 50-day EMA in the lower $60s in early August. The stock fell more than 10 points into this week’s confessional but has recouped that loss, trading as high at $62 in the pre-market. (See also: Signet’s Q2 Earnings and Sales Top the Zack’s Consensus.)

The buy-the-news reaction has remounted a small-scale head and shoulders pattern with a neckline at $55, generating new support at that level. However, it has also stalled under a trendline​ going back to February 2017, predicting additional testing at the 50-day EMA, which the stock has failed to hold for longer than a few weeks since 2015. Once mounted, bulls will face an even challenge at channel resistance near $70, with that level tightly aligned with the 200-day EMA.

The Bottom Line

Tiffany and Signet Jewelers surprised retail bears with bullish second quarter results on Thursday morning, lifting the beaten-down brick and mortar group. Both stocks have already reached short-term resistance levels following post-news rallies but could add to gains in coming weeks. Conversely, neither stock is trading close to the price levels needed to sustain new uptrends. (For additional reading, check out: Jewelers Vulnerable to Brick and Mortar Exodus.)

(Disclosure: The author held no positions in the aforementioned securities at the time of publication.)

 

Published at Thu, 24 Aug 2017 14:02:00 +0000

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Best Buy Stock Probing All-Time Highs

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Best Buy Stock Probing All-Time Highs

By Alan Farley | August 24, 2017 — 11:30 AM EDT

Best Buy Co., Inc. (BBY) defied retail sector bears on Thursday morning, rallying to an all-time high following a three-month test at 11-year resistance near $60. The stock has outperformed its brick-and-mortar peers for many months, cutting costs in a brutally adverse sales environment while enhancing its online portal to compete more effectively with Amazon.com, Inc. (AMZN) and privately held Newegg.

However, there is little rush for market players to take new exposure because breakouts all across the market universe have developed little buying interest in recent months, often reversing into new downtrends. This conflicted behavior suggests that the stock will enter a longer testing period, with success measured by modest gains until this confused mid-year tape attracts greater public participation. (See also: Best Buy Stock Poised to Break Out Ahead of Earnings.)

BBY Long-Term Chart (1990 – 2017)

A long downtrend ended at a split-adjusted 17 cents in 1990, giving way to a healthy uptrend that topped out at $5.03 in 1995. The stock lost ground for the next two years, bottoming out at 88 cents, ahead of a powerful buying impulse that continued into the April 2000 high at $39.50. It broke a double top pattern in October and fell into the single digits two months later.

That decline posted the lowest low in the past 16 years ahead of range-bound action that persisted into a 2005 breakout. Momentum buying pressure failed to develop, yielding a secondary trading range with resistance centered at $59.50. That level is important to keep in mind because it is back in play in the second half of 2017. The range finally collapsed in September 2008, generating a vertical decline that dropped the stock nearly 70% in just two months. (For more, see: Why Is Best Buy Stock So Volatile?)

A bounce into 2010 fell short, stalling at the .618 Fibonacci retracement level, ahead of a steep decline that posted a 12-year low at $11.20 in December 2012. It completed a round trip back to the 2010 high in 2013, with that level generating intense resistance until an April 2017 breakout reached the 2006 high. It spent three months carving a small-scale cup and handle pattern at that level, ahead of this morning’s breakout attempt.

BBY Short-Term Chart (2015 – 2017)

The stock entered a broad symmetrical triangle after the February 2014 low at $22.30, posting lower highs and higher lows into August 2016, when it broke out on heavy volume. It took another three months to mount the top of the triangle in the mid-$40s and seven more months to clear that level. This stair-step price action has continued into the second half of 2017, with two more sets of higher highs up to 11-year resistance. (See also: Best Buy Stock Tanks on Amazon Service Team Report.)

The three-month cup and handle built a solid platform ahead of this morning’s breakout attempt, which has been met with aggressive selling pressure. However, bulls should eventually prevail given the well-established uptrend and solid technical characteristics. Even so, a breakdown through the mid-August low at $58.93 would undermine the bullish outlook, perhaps triggering a decline into long-term support at the 200-day exponential moving average (EMA).

On-balance volume (OBV) has carved a graceful accumulation pattern since 2014, with the long series of higher highs and higher lows into May 2017 signaling extensive institutional sponsorship that bodes well for higher prices. A minor deficit into August is not enough to signal a bearish divergence, because just one or two high-volume buying days would lift the indicator to another high. (For more, see: Sorry Amazon, Best Buy Is Still Alive and Kicking.)

The Bottom Line

Best Buy tagged an all-time high this morning before bears reversed the tape and dropped the stock back into the red. This mixed price action marks the opening shot of a breakout attempt that should eventually yield much higher prices. (For additional reading, check out: Top 3 Companies Owned by Best Buy.)

 

Published at Thu, 24 Aug 2017 15:30:00 +0000

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Gold is doing better than U.S. stocks this year

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Why gold is considered an investing safe haven
Why gold is considered an investing safe haven

 Gold is doing better than U.S. stocks this year

  @mattmegan5

Wall Street’s conflicting emotions of fear and greed are duking it out right before our eyes.

Greed is obviously alive and well. Confidence in the American economy has lifted the S&P 500 to an impressive 9% jump this year.

But gold, which is thought of as a safe place during times of fear, is doing even better. The precious metal has soared 12% this year to nearly $1,300 an ounce, putting it on track for the best performance since 2010.

So, what gives?

Believe it or not, it’s not that rare for both gold and stocks to do well at the same time.

Just last year, gold jumped 8.6%, nearly besting the S&P 500’s gain of 9.5%.

Gold also soared nearly 30% in 2010, a year when the U.S. market rose a very healthy 13%. Both gold and the S&P 500 were up about 23% in 2009 as well.

“It’s a bit surprising, but it’s not that unusual,” said Ed Yardeni, president of investment advisory Yardeni Research.

And in some ways it makes sense given the mixed emotions displayed lately by CNNMoney’s Fear & Greed Index, which measures market sentiment. Fear & Greed is currently flashing “extreme fear,” but just one month ago it was sitting comfortably in “extreme greed.”

gold versus stocks

 

One likely factor for gold’s rise: investors who’ve been forced to chase the rising stock market are trying to hedge their bets in case something goes wrong.

“Many people are concerned about stock market valuations, but they don’t want to miss out on the rally,” said Axel Merck, founder of Merck Investments.

What could go wrong? Lately, investors have been focused more on geopolitical risks like the nuclear standoff with North Korea, turmoil in Washington and the looming deadline to raise the U.S. debt ceiling. President Trump’s unpredictable style of governance is also keeping investors on their toes, to say the least.

“Trump’s twitter handle still stirs nervousness in the marketplace,” Lindsey Bell, investment strategist at CFRA Research, wrote in a report on Thursday.

Looking ahead to the battles in Washington this fall, Bell said gold is a “smart and defensive way” for investors to diversify their portfolio “ahead of an increasingly uncertain near-term environment.”

Russ Koesterich, portfolio manager for BlackRock’s global allocation team, agrees that gold is benefiting from rising uncertainty over U.S. economic policy. He said gold could tumble if Washington gets its act together — but he’s not banking on that happening.

“I would prefer to bet on gold’s diversifying properties rather than political stability,” Koesterich wrote in a report.

Ray Dalio, the mercurial founder of the world’s biggest hedge fund, warned that investors should have 5% to 10% of their assets in gold due to the risks of political instability. The Bridgewater Associates founder recently said on LinkedIn that “risks are rising” and investors need hedges in case “things go badly.”

Gold and large U.S. stocks have also had a common tailwind: the slumping U.S. dollar. A cheaper dollar makes it easier for multinationals to sell their goods overseas. And weaker currencies often encourage people to buy gold as a hedge against inflation.

Still, some say gold’s rise this year calls into question its role as a safe haven during scary times.

Andres Garcia-Amaya, global market strategist at Zoe Financial, has spent dozens of hours studying what makes gold goes up — and he’s been left as confused as ever. His research found that there’s often no rhyme or reason for why gold goes up or down.

“It’s one of the most unreliable, inconsistent asset classes I’ve seen during my time on Wall Street. It’s an enigma,” Garcia-Amaya said.

Published at Thu, 24 Aug 2017 19:34:56 +0000

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U.S. stock fund withdrawals largest of 2017: ICI

 

U.S. stock fund withdrawals largest of 2017: ICI

NEW YORK (Reuters) – Investors battered U.S.-based stock funds with the largest withdrawals this year as wild trading disrupted the market’s summertime calm, Investment Company Institute (ICI) data showed on Wednesday.

Nearly $9.2 billion flowed out of equity mutual funds and exchange-traded funds during the week through Aug. 16, with a 37th week of inflows for international shares only slightly offsetting $11.3 billion of withdrawals for domestic stocks, according to the trade group.

U.S. stocks remained on pace to deliver their ninth straight year of positive returns.

Yet two pullbacks of more than 1 percent in S&P 500 index .SPX this month jolted markets following geopolitical tensions between the United States and North Korea as well as questions surrounding U.S. President Donald Trump’s administration bringing its economic agenda to fruition.

Equity mutual fund outflows of $9.9 billion compared with $1.4 billion of stock ETF withdrawals, according to ICI.

“Investors have favored international equity and bond fund strategies as alternatives,” said Todd Rosenbluth, director of ETF and mutual fund research at CFRA.

Investors turned to perceived safe-haven funds, with taxable bond funds attracting $3.8 billion in their 37th straight week of inflows, ICI said. Funds that invest in commodities like gold pulled in $881 million, their best week since June.

Reporting by Trevor Hunnicutt; Editing by Meredith Mazzilli

 

Published at Wed, 23 Aug 2017 17:05:47 +0000

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