Posted by Investing Freakon March 20, 2010 General /
Comments Off on Current Picks Updated 3-20-2010
The Current Picks page has been updated. Have a look by clicking Current Pickshere or up on the top of the page.
Below I will only mention the new signals that have occurred this week.
IWM downgraded to SELL on Mar 19th at $67.41 (BUY Feb 11 at $60.58) AAPL downgraded to SELL on Mar 19th at $222.30 (BUY Feb 25 at $202.00) DIG downgraded to SELL on Mar 19th at $33.98 (BUY Mar 1 at $33.09) DUG upgraded to BUY on Mar 19th at $12.40 (SELL Mar 1 at $12.80) SMN upgraded to BUY on Mar 19th at $7.37 (SELL Feb 9 at $9.26)
And Mitch, I tried to add MGI to the current picks list per your request on the comment box, but right now it’s been stuck in a range and gives more than one signal a week (one too many considering I only do weekly updates to the page) I will keep an eye on it once it breaks the range.
Disclaimer: I am only giving the latest signal for the stock mentioned. Use at your own risk and make sure to take the date into consideration. If you have been trading for a while you should have realized that relying solely on the strategies of others (think Analyst Opinions) will lead to failure so please only take the signals I provide just as another indicator in making your informed BUY or SELL decision. Now go Make some MONEY!
Leading Economic Indicators Point to Slowing Recovery (Econompic)
The index of U.S. leading indicators rose 0.1 percent in February, the smallest gain in almost a year, pointing to an economy that may expand at a slower pace in the second half of 2010.A pickup in manufacturing in the last half of 2009 that helped spearhead the recovery has prompted companies to slow the pace of job cuts. Stronger economic growth hinges on employment gains that have yet to occur, one reason Federal Reserve policy makers this week kept interest rates near zero.
The Fed must disclose bailout details (Calculated Risk)
The U.S. Court of Appeals in Manhattan ruled today that the Fed must release records of the unprecedented $2 trillion U.S. loan program … The ruling upholds a decision of a lower-court judge, who in August ordered that the information be released. It will be interesting to see these documents, but it might not be for a few more years.
Goldman Lowers Major Banks’ Projected Q1 EPS By 15% (ZeroHege)
German Central Bank Admits that Credit is Created Out of Thin Air (Naked Capitalism)
Germany’s central bank – the Deutsche Bundesbank (German for German Federal Bank) – has admitted in writing that banks create credit out of thin air.As the Bundesbank states in a publication entitled “Money and Monetary Policy”
The high price of failure in North Korea (The Mess That Greenspan Made)
North Korea has executed a senior official blamed for currency reforms that damaged the already ailing economy and potentially affected the succession, a news agency in South Korea reported today.Pak Nam-gi was killed by firing squad last week.
NOTE: I Will not do Weekend Updates of news. Sorry
CPI Shows Lack of Inflationary Pressure (Econompic)
U.S. consumer prices were unchanged on a seasonally adjusted basis in February, with falling energy prices offsetting increases in prices of cars, medical care and food, the Labor Department reported Thursday.In the past year, the CPI has risen 2.1%. The core rate is up 1.3% in the past year, the smallest year-over-year increase in six years.
Portugal Prepares To Sell $1 Billion Of Dollar Denominated Bonds In Goldman-Led Deal (ZeroHege)
Yet more rape and pillaging of US taxpayers as Portugal now plans to join the long and exalted list of nearly bankrupt countries who wish to join the dollar devaluation bandwagon, and issue debt denominated in dollars. The P in PIIGS is in the same position as the US, needing to plug a massive budget deficit, so it has decided to do what the US does so well – issue bonds with a $ sign on them.
China’s Exporters Hanging by a Thread? (Naked Capitalism)
China cannot tolerate much inflation. Remember, inflation will push up the price of good in local currency terms, which in a fixed peg currency regime, translates directly into price increases. Price increases from a country whose selling proposition is cheap prices would lead importers to look for substitutes in other emerging economies.
Greece Gives Germany And E.U. One Week Bailout Deadline (Bloomberg)
Greek Prime Minister George Papandreou set a one-week deadline for the European Union to craft a financial aid mechanism for Greece, challenging Germany to give up its doubts about a rescue package. Papandreou said he may turn to the International Monetary Fund to overcome Greece’s debt crisis unless leaders agree to set up a lending facility at a summit March 25-26.
Read The Harvard Thesis on The CDO Market Meltdown (Distressed Volatility)
“A.K. Barnett-Hart, a Harvard undergraduate who wrote a thesis about the market for subprime mortgage-backed CDOs Inspired Michael Lewis to write “The Big Short”. It is an unbiased report about the subprime mortgage-backed CDO meltdown by a Harvard undergraduate last year. The report is 115 pages long and packed with charts.
PPI Is Stabilizing (Econompic)
Wholesale prices fell a larger-than-expected 0.6% in February after seasonable adjustments, with energy prices falling 2.9%, the Labor Department reported Wednesday. This is the largest decline since last July. The producer price index has risen 4.4% in the past year, the government said.
437 Retail Store Closings Signal Major Brand Restructuring (RIS)
The spring thaw can’t come fast enough for retailers that haven’t yet adjusted to a retail landscape populated with bargain hunting shoppers that have limited discretionary spending. Find out which major chains, including Abercrombie & Fitch and Williams-Sonoma, are closing poorly performing stores with leases about to expire, and why one global retailer is exiting the U.S.
Now Bernanke Wants To Eliminate Reserve Requirements Completely (The Economic Collapse)
Banks have always been required to keep a small fraction of the money deposited with them for a reserve, but were allowed to loan out the rest. But now it turns out that Federal Reserve Chairman Ben Bernanke wants to completely eliminate minimum reserve requirements, which he says “impose costs and distortions on the banking system”. At least that is what a footnote to his testimony before the U.S. House of Representatives Committee on Financial Services on February 10th says. So is Bernanke actually proposing that banks should be allowed to have no reserves at all?
Tracking a Century of American Eating (Amber Waves)
A century of ERS’s food availability data reveals how the sometimes conflicting, sometimes reinforcing technological, political, social, and economic forces affect the types and amounts of commodities available for consumption. The following examples illustrate some of these forces and their impacts.
The Best 2-day Indicator (Trading SPY) (MarketSci Blog)
MarketSci puts four often used 2-day indicators to the test to see which has been the “best” measure of how overbought/oversold the market was over the last decade.
In Dod We Trust – The Daily Show (Video) Chris Dodd introduces financial reform legislation and Jon Stewart provides another hilarious clip.
Housing Starts Stagnant (Econompic)
Housing starts in the U.S. fell in February as record snowfall in parts of the country hampered construction, while fewer building permits signaled demand is stagnating. Building permits, a sign of future construction, decreased for a second month.
Meredith Whitney: Housing Market will double-dip (CNBC)
The US housing market will face another retreat while mortgage-backed securities and Treasurys are likely to go through a “material” correction, Meredith Whitney, CEO of Meredith Whitney Advisory Group, told CNBC Tuesday. “The Fed has been supporting the housing market, a third of the Fed’s balance sheet is tied to mortgages,” she said.
FOMC Statement: Economic Activity “Continued to strengthen” (Calculated Risk)
As expected, the Fed will continue to provide the trough of free money, for now. You can bet they will be acting with extreme caution when it comes to removing the liquidity so as to not snuff out what could be an actual recovery in the making.
S&P affirms Greece’s BBB+ rating (The Big Picture)
S&P affirmed Greece’s BBB+ credit rating and took them off credit watch with negative implications but the outlook is negative from stable (which reflects their view of the govt’s ability to sustain reform momentum in the medium term). They see “real GDP contracting by 4% this year.”
Our Next Economic Plague: Japan Disease (Caixin Online)
Typically provocative new Andy Xie piece out pointing to aging societies as being fundamental to why all economies are steadily catching “Japan disease”. Further, Xie goes on to argue that innovation won’t save us from debt and death. An economy ages in many ways. Growing old is hard, but watching formerly vibrant economies choke on debt and wither away is downright ugly.
NY Manufacturing Index Shows Strength (Econompic)
Manufacturing activity in the New York region continued at a solid pace in March, the New York Federal Reserve Bank said Monday. The new orders index shot up 17 points to 25.4. Shipments also moved higher. Inventories climbed above zero for the first time since August 2008.
ECRI Leading Economic Index Drops For 12th Week In A Row (ZeroHedge)
Leading indicators in the U.S. are telling a similar story about a possible double-dip. Friday’s reading from the ECRI continues to show a weakening recovery. Their leading indicator’s growth rate fell to a 31 week low. The smoothed ECRI leading economic index for the U.S. fell last week for the 12th week in a row, to stand at its lowest level since July 2009. Something tells us a slowdown is about to start.
Moody’s warns nations to cut spending or risk AAA ratings (Washington Post)
The United States and other top world economies need to make potentially painful government spending cuts or risk losing the high-grade credit ratings that have kept borrowing affordable, the Moody’s rating agency said Monday. Outlining the dilemma faced by policymakers in the United States, Great Britain, Germany and France, Moody’s said that debt levels in the four large credit-worthy economies had reached the point at which they are at risk of being downgraded — a step that would drive up interest rates, increase borrowing costs and mark a turn in perceptions about the world economy.
Germany’s Manufacturing Jobs Fell 4.9% in January (Business Insider)
The Federal Statistical Office said Monday the number of Germans employed in manufacturing fell to 4.9 million workers from about 5.15 million in January 2009.
Chinese Economic Indicators Are Starting To Roll Over (Pragmatic Capitalist)
“Early signs of softening in data momentum suggests we should be much more cautious about corrections in those markets that benefited late last, and early this year.” Despite being the strongest leg of the economic recovery, Chinese investors have turned remarkably cautious in recent months. The Shanghai Index peaked in July of 2009 and has traded down ever since. The index has declined 9.5% this year while U.S. investors have continued to run head first into stocks.
Consumers Don’t Strongly Identify with Brands (Marketing Charts)
trendwatching.com calls these products and services “functionall,” or providing function for all. Often designed for lower-income consumers in emerging markets, they also have broader crossover appeal for more affluent consumers in mature markets. Look for brand manufacturers to produce more of these products, and for more global brands to try to penetrate mature economies.
Is The US Preparing For a Strike on Iran? (HeraldScotland)
Hundreds of powerful US “bunker-buster” bombs are being shipped from California to the British island of Diego Garcia in the Indian Ocean in preparation for a possible attack on Iran.The Sunday Herald can reveal that the US government signed a contract in January to transport 10 ammunition containers to the island. According to a cargo manifest from the US navy, this included 387 “Blu” bombs used for blasting hardened or underground structures.
National credit card statement (Cracked)
A National Debt happens when governments spend more than they actually have, and everyone getting the money agrees that’s absolutely fine.
60 Minutes: Michael Lewis’ The Big Short – Video (CBSNews)
If you had to pick someone to write the autopsy report on the Wall Street financial collapse 18 months ago, you couldn’t do any better than Michael Lewis. He is one of the country’s preeminent non-fiction writers with a knack for turning complicated, mind numbing material into fascinating yarns.
I came across an interesting article today on Sotheby’s (BID). Some analysts and websites praise it for being a leading market indicator.
Since it caught my attention I decided to do some research on it.
According to Investorwalk.com
Sotheby’s (BID) is an auction house for expensive artwork, jewelry, antiques and collectibles. It could be used as a gauge to measure hot money and liquidity flowing around the world. The argument: when super rich people have too much money to burn, they will bid up the prices of expensive art sales by setting one record after another.
Using a specific stock as a leading indicator doesn’t sit well. Sure Sotherby’s might have declined a bit early than the rest of the market for a few recessions but historical data can’t really predict the future. Sotherby’s, being just another business out there, might take more risks and make wrong bets causing their price to go down while markets stay their course.
While at Artmarketmonitor.com an article got written in March of 2009 where they Quoted Barron
John Angelo, a hedge-fund manager who sits on Sotheby’s board, has bought 125,000 shares in the auction house since March 6 for about $970,000, or an average of $7.74 per share.
Granted, less than a $1 million is hardly a big play, especially for a director of the company. But when a number of smart market players make a move into Sotheby’s stock, no matter how depressed, it suggests a level of confidence about the art market in future, don’t you think?
Now we come to the point where I put my visual charts to work (I am a visual person). Bespoke Investment debunks this Sotheby’s myth but I am willing to test it right here. (Click Pictures to Enlarge)
Well I am sort of convinced. If we used BID as an entry and exit signal we would have had fewer fake-outs.
Also the March bottom is Interesting as BID took nearly two weeks in a range and finally broke out. (Below is a close up of the March 2009 Lows)
Will Sotheby’s (BID) continue to be a “leading” indicator? Like all other indicators, this stock might lose its name with time but until it’s proven wrong I am adding this to my indicator arsenal.