Tuesday, March 26, 2013
2nd Chance CLOSES 03/28/2013 @ 11:59pm EST! Click Here Now
My name is Ben Lewis, CEO and Chief Strategist on the ForexSignal Trading Desk. My 26 years of trading experience has taught me a lot about what works and what doesn't in this exciting market.
I write this from one Forex trader to another. We all know that trading can be very exciting and the potential to make some really great profits is what makes it so attractive, but in many cases, traders lose money. Why?
Mark Douglas, author and trading psycho-analyst explains; "Successful trading is 80% psychological and 20% methodological."
Here are just a few examples of experiences that happen to Forex traders. Perhaps you can relate to them if you have ever.
Not taken a great looking trade simply because of fear of what "could" happen if it doesn't work out.
Exited a seemingly flat trade with a small gain just minutes before it takes off like a rocket. (This one makes you want to cry like a baby.)
Received great information or data about the market, but not available or unable to take the trade. (It has happened to all of us).
Taken a trade because it feels right and ending up with a HUGE loss, only to look back afterwards and say "what was I thinking"?
Of course this and many similar frustrating experiences have happened to all of us, and just the thought of these moments turns the stomach. Would you not agree that it is heartbreaking watching the market move hundreds of pips, and instead of being in the trade, you are left behind.
Forex Trading - Why Such a Challenge?
After so many years of trading Forex, I have learned that there is no single surefire method to trading because there are so many types of market conditions. The Forex markets trend, reverse, break-out and consolidate. For each market condition, there are various rules and trading criteria. No single strategy to date that we know of has held up under all trading conditions.
Technology has Shown Us the Way
Various market conditions require multiple strategies used together, each one appropriate for a particular market situation. Our experiences has shown us that under certain conditions, each strategy has its place. By far, the most profitable trading scenarios we have found is by employing the multiple-strategy approach.
What about those times when there is no movement in the market for days on end and no trade is triggered? I believe that if the strict trade criteria and requirements are not met then WE SIMPLY DON'T TAKE THE TRADE, even if this situation lasts for days.
However, if all the trade criteria is achieved, then, I say, "Go for it and take the trade!" Since trading is 80% psychological, just "going for it and taking the trade" is much easier said than done. Emotion, the biggest trader killer of all, has to be removed from the equation. But how? The solution lies not just with automated trading, but with Supervised Automated Trading.
How does Supervised Automated Trading (SAT) work in Forex?
At ForexSignal, we have developed an automated trading system that is overlooked by our live trading team. The concept is simple. Think of an F-35 jet fighter that utilizes an auto-pilot computer to fly the plane, and then has a human pilot to overlook all the vital instruments and systems.
Likewise, our Forex trades are triggered by preset and tested automated Forex trading strategies. The computer executes and manages the trades when the strict criteria is met, removing all emotion from the equation. Then, our live trading desk oversees the trade to make sure trades are executed correctly and that the systems are running as programmed.
Below are a few SAT examples displaying various methods developed by our trading team, as well as proven and tested strategies designed in cooperation with one of the largest trading desks in the world, and includes a leading trade strategist from Europe.
The above trade strategies are available to be traded for you directly in your account using our SAT method. We do all the work for you and can even host your broker trading account on our server. We invite you to try it out yourself with a special offer.
Click here to view all results of our automated trading strategies.
Monday, March 25, 2013
Click Here for a Free Trial of the "Profit Rockets" Stock Pick Service
Zacks Investment Research reports Safeway has been consistently delivering positives earnings surprises as it continues to grow its margins and the market share. Further the company had been rewarding its investors with a solid dividend growth rate and attractive share repurchases. No wonder, the stock has been on a strong uptrend, but it still looks good on some of the valuation metrics.
Excellent growth potential and a solid record of returning cash to shareholders make this Zacks Rank #1 (Strong Buy) stock an attractive long-term investment.
About the Company
With 1,641 stores in the Western, Southwestern, Rocky Mountain, and Mid-Atlantic regions of the United States and in western Canada, Safeway is one of the largest food and drug retailers in North America. The company operates stores under a variety of names including Vons, Dominick's, and Randalls and Tom Thumb.
Solid Fourth Quarter Results
Safeway reported its fourth quarter 2012 results on February 21, 2013. Fourth-quarter earnings were $1.06per share, up 58% from the prior-year quarter, and significantly above Zacks consensus estimate.
According to the management, expansion of the personalized discount program “just for U”and fuel loyalty programs were instrumental in driving market share gains and profits.
This was the company’s third consecutive positive earnings surprise. Further, the management’s earnings guidance for 2013--$2.25 to $2.45 per share-- was also above street’s estimates.
With successful branding efforts, the retailer has been able to grow its margins as well as the market share. The company’s cost cutting efforts also appearing to be helping the bottom line.
Excellent Record of Returning Cash to Shareholders
Safeway also continues to reward its shareholders with attractive dividend and share repurchases. During 2012,Safeway repurchased 57.6 million shares of its common stock for a total cost of$1.24 billion—about 20% of its current market cap of $6.1 billion. Its dividends have grown at a rate of about 20% during the last five years.
Positive Earnings Estimates Revisions
As a result of solid results and updated guidance, analysts have been raising their estimates for the company. During the last 30 days, four analysts have raised their estimates for the current quarter and eight have raised their estimates for the current year.
Solid Future Growth Plans
Safeway is planning spin off its Blackhawk subsidiary. It is also working towards launching a Wellness initiative to penetrate the fast growing health care market. Further the company is also expanding its international operations.
The Bottom Line
SWY is a Zacks Rank#1 (Strong Buy) stock. It also has a longer-term Zacks recommendation of “Outperform”. Though Zacks Industry rank of 231 out of 265 indicates the likelihood of slight weakness in the short term, we think that Safeway will be able to outperform its peers in the industry.
Safeway is current trading at trailing 12-month earnings multiple of 11.1 compared with the industry average of 16.3.
Further with a dividend yield of 2.8%, excellent fundamentals, and a solid growth potential, I believe that this stock will be a nice addition to any portfolio.
Click Here for a Free Trial of Zacks Investment Research
Friday, March 22, 2013
By Dr. Van Tharp Trading Education Programs and Workshops
The financial industry is abuzz over the news coming out about Cyprus. The story begins with Cyprus finding itself as the latest country in need of a bailout. European regulators decided that it would be a good idea to have Cypriot bank depositors help pay for that bailout. The subsequent plan to levy all bank deposits raised a furor among not only the Cyprus natives, but also Cypriot leaders, German legislators — and even the Kremlin (because of the large amounts of Russian deposits in Cyprus). So much of a furor in fact, that the all-powerful regulators have been scrambling to revise the bailout plan even before it started.
So for traders and investors, the questions come fast and furiously: What does this mean in the short and intermediate term for the grinding bull market? Will we finally get a pullback? And in a broader view – how much does this news of the Cyprus bailout matter overall?
The last question is probably the best place to start — how much does the Cyprus bailout matter? From there we’ll look at some support and resistance levels to keep our eyes on if a pullback does materialize so that we can measure its severity. Let’s dig in…
How Much Does the Cyprus News Really Matter to Traders and Investors?
Let me start by telling you what I concluded and then we’ll look at some supporting data. On Monday, the markets gave us our first response that the news out of Cyprus didn’t matter that much. The markets dropped a bit in the morning, but, as many observers pointed out, in a way that did not indicate any panic. Then in the U.S. markets, prices spent the rest of the day recovering to close with a very unassuming, modestly down day.
Here’s why: financially, Cyprus is tiny, financially. In fact, Cyprus is so small that it makes Greece look like a giant. To give some perspective, if you look at the Gross Domestic Product (GDP) of the 50 states in the U.S., the most recent data shows that Vermont is ranked number 50 (lowest) with a GDP of $26.4 Billion. The GDP of Cyprus is only $25 Billion! That’s more than 11 times smaller than Greece. So in one sense, the markets are telling us that this action is like taking a bucket of water out of the Pacific — while there may be some yelling about how the bucket was used to remove the water, in the final financial analysis, no one notices that anything has changed.
But before we dismiss the incident completely, I believe that there are bigger ramifications to the European regulator’s actions — ramifications that far outweigh any immediate financial math. By confiscating bank deposits, major notions have been violated — the concept of private property rights, the notion of insured deposits not losing principal, and the broader notion that banks in general are a safe place to store your savings. Everyone chuckles at the fictional uncle Ernie who buries his savings in a coffee can in the back yard or stuffs them under the mattress. Now, no one is laughing at the people who used “non-traditional” savings methods in Cyprus and may therefore get to keep all of their money.
Next, let’s turn our attention to what happens if the EU’s attempted methods to solve the most recent bailout in Cyprus outweigh the amounts involved. How do we know that this is more than a minor blip? What if this is just the first domino that starts toppling other dominoes? The chart below of the S&P 500 ETF (symbol: SPY) is self-explanatory as we look for sign posts that could point to deeper retracements:
It’s important to note that, so far, (as of the close on Monday) the markets have once again absorbed bad news (this time about the EU and Cyprus) and held their ground. The next couple of days will tell if there are runs on banks outside of Cyprus and if this is more than a minor blip on the proverbial financial radar screen.
Click Here to Review Dr. Van Tharp's Home Study Programs
Wednesday, March 20, 2013
Click Here to Get it Before It's Over
Heads up . . .
Bill Poulos is shutting down enrollment to his brand new Forex Profit Accelerator 2.0 software TOMORROW, Thursday, at 11:59pm Eastern.
That gives you just over 24 hours to join, depending on when you get this note.
BTW, was the price of Bill's software what you thought it would be?
I think everybody was surprised. As in "jaw on the floor" surprised. Bill essentially removed price as a barrier to try this out.
Click here for the version of his enrollment video with the video controls enabled so you can scrub back and forth to check everything out, including the ridiculously low price.
There's a HUGE bonus 4th method that Bill announces in that video that was designed to spot MORE trades MORE quickly for those of you who like "action".
Tuesday, March 19, 2013
Click Here to Profit from Potential Disaster
In a desperate move to avoid a national default, the Cyprus government has agreed, in principle, to a deal with the EURO Zone's finance ministers to accept a 10 Billion Euro loan. In exchange for that loan, Cyprus is allowing the Euro Zone to grab up to 10% of every savings account in the nation. Yikes!
Looks like the rest of Europe wants the Cyprus citizens to get a little "skin in the game."
Hoping to avoid the government theft of their private savings, Cypriots all over the island started running to any ATM to drain their accounts. Unfortunately, the ATMs around the island were drained within hours. The Cyprus government, hoping to avoid a bank run, shut down all the banks until Thursday.
What a mess for the Cypriots, and the EURO.
The Cyprus Parliament has yet to formally vote on the "one-off" savings account tax, but it is likely to be forced to do so in order to avoid default. Cyprus president, Nicolas Anastasiades, urged politicians to back the tax, saying it was essential to prevent the country falling into bankruptcy. He said, "I chose the least painful option, and I bear the political cost for this, in order to limit as much as possible the consequences for the economy and for our fellow Cypriots."
There is a lot going on in the world's currencies today. There is much talk about global currency wars, and that talk is ringing true. The countries that can print money (like the USA) and are burning up their presses in an effort to out-print other governments. If you need any proof of that, open up a EUR/JPY daily chart and see what the Japanese have been doing since November. That picture says it all.
The problem for the Cypriots, is that they are not authorized to print Euros. If they could, you can bet they would be burning their presses 24/7 in order to get themselves out of debt and lower their interest rates (just like the USA). Unfortunately, the Cypriots are unable to print money and must actually start tightening their belts. It is going to be a painful process for the citizens of that country.
Over the next several months (and couple of years), the trading world is going to see all sorts of trends develop in the Forex Markets. Be sure to pay attention to the Currency Wars, not only to the players that are participating (i.e., who can print their own currency), but to any major news coming out of these countries.
Click Here for 3 Free Forex Wealth Catalysts
Monday, March 18, 2013
Click Here for a Free Trial of the "Profit Rockets" Stock Pick Service
Zacks Investment Research reports, as a leader in their industry and a top Zacks Rank among peers, O’Reilly Auto ( ORLY ) is a stock that should not be ignored. The company has beaten the Zacks Consensus Estimate five earnings reports in a row, exceeding expectations by an average of 5%. More than that, they are in a space with strong growth and a somewhat defensive correlation to the broad market.
A Growing Industry
Things have come a long way since 1957 when O’Reilly was first formed. In 1960, there were 74 million cars on the road and 180 million people in the U.S. Today, there are over 300 million people in the U.S. and close to 250 million registered vehicles on the roads.
The DIY (do it yourself) auto repair market has grown along with the auto, truck and motorcycle industry and so have the local shops (maintainers) that do the work for us.
With parts and repair costs dropping and cars becoming more complicated, the ratio of DIY to DIFM (do-it-for-me) has been dropping as well. O’reilly is positioned to take advantage of that trend by catering to non-agency maintenance shops in addition to the DIYers looking to put in a new battery, perform minor maintenance or detail their rides.
Earnings and Revenue
ORLY currently trades at roughly 21 times trailing earnings, with a forward multiple around 18, roughly the same valuation and growth outlook as we saw in February last year with shares $25 lower.
On February 2nd the company reported its 20th consecutive year of comparable store sales growth, record revenue and operating income since becoming a public company in April of 1993. Quite a feat when you consider the two recessions they have endured.
O’Reilly’s sales for the fourth quarter ended December 31, 2012, increased $97 million, or 7%, to $1.49 billion from $1.39 billion for the same period one year ago. Gross profit for the fourth quarter increased to $750 million (or 50.4% of sales) from $695 million (or 49.9% of sales) for the same period one year ago, representing an increase of 8%.
Net income for the fourth quarter ended December 31, 2012, increased $10 million, or 8%, to $133 million (or 8.9% of sales) from $123 million (or 8.8% of sales) for the same period one year ago.
Diluted EPS for Q4 2012 increased 21% to $1.14 on 116 million shares versus $0.94 for the same period one year ago on 130 million shares.
Their industry is ranked 12th out of 265 and the stock is a Zacks Rank Buy #1.
O’reilly’s Future Growth
With 4,000 locations, O’reilly is second only to AutoZone (5,029) in store count. But the industry is still fragmented and much of it is open for O’Reilly to capture either organically or by acquisition. In fact, the top 10 auto parts chains only account for 45% of the total industry’s $231 billion per year business.
With over $6 billion in sales in 2012, the company is looking to expand their store count by 190 and capture 6.6 to 6.7 billion in sales in 2013. Same store sales growth is expected to be 3%-5% in 2013 compared to 3.8% in 2012.
Margins have been steadily on the rise since 2008, with adjusted operating margins coming in at 15.8% in 2012 and 15.8-16.2% margin expected for FY2013.
Even CNBC’s Jim Cramer is lovin’ on ORLY an gave it a “buy” nod during his lightening round on March 12th.
Early last year I wrote about ORLY with the stock in the low $80 range as a good momentum play. Shares quickly gained over 30%, peaking at over $106. It feels like a similar setup this time around with the stock consolidating close to its highs and poised for a possible breakout.
O’Reilly has formed a nice support base around the $100.50 level, below that you have some stickiness at the top of the recent earning’s gap at $99.30 and them the 50 and 200 day moving averages below at $96.77 and $90.57 respectively.
The most recent breakout occurred on January 24th when the 50 day jumped above the 200. A solid earnings report was the propellant soon after.
While ORLY’s fundamentals are compelling and the techncials show good support, the stock will still be subject to market fluctuations, though it tends to be “less market sensitive” with its low beta of 0.43. This adds a defensive element to the shares, but keep in mind that any sharp moves in either direction made by the broad market will most likely carry ORLY with them.
Click Here for a Free Trial of Zacks Investment Research
Thursday, March 14, 2013
Click Here to Get It
The Stock Market Trend & Hot Sector ETF’s by the Gold Oil Newsletter
Trading with the trend should be your main focus for long term success no matter what type of trader you are (Options Trader, Stock Trader, or ETF Trader) although it’s not as easy as it sounds.
The good news is that there is a simple trading model that removes 95% of trading analysis and greatly reduces trading related emotions because the key technical analysis rules based on one of the world’s best chart technicians (John Murphy) technical analysis methods have been applied to the chart automatically. The key is to identify the trend of the market. Once that is known you can focus on trading strategies that take advantage of the current trend.
Over the past few years I have been creating this indicator/chart layout tool which converts my chart reading experience, tips and tricks into a simple system removing analysis paralysis which cause most individuals to second guess what they see and don’t pull the trigger. Using too many indicators or read/listening several other traders commentaries with different views than you causes this paralysis.
My simple red light, green light model clearly shows a viewer the current trend and expected price range (high and low) looking forward a couple days. I uses a series of data points like volatility, volume, cycles, momentum, chart patterns and logic rules. It even shows extreme pivot points helping you find low risk entry prices for both bull and bear market conditions.
Recent trends and signals for the SP500 Index Daily Chart:
Trading With the Trend – The Sweet Spots
Knowing the direction of the market is simple using the chart system above but trading with the trend is not that simple because of natural human behavior. Instead traders fall victim to trying to pick a top or bottom because they think the price is overbought or oversold and they want to catch the next big trend change.
We all know the saying “the market climbs a wall of worry”. Well, the biggest worry most traders have is buying long in a bull market because stocks and price always look overbought and ready to top each week… This leads to people trying to get fancy picking a top only to get their head handed to them a few days or weeks later depending on how stubborn they are to exit a losing position.
The key to long term success is to buy during broad market (SP500) corrections once sentiment, cycles and momentum are starting to flash extreme oversold conditions. These show up as green arrows on the trend chart. At that point most sectors and high beta stocks like IBM, GOOG etc… should be at a key entry points with most of the downside risk removed already. Remember ¾ stocks follow the broad market so it only makes sense to follow it also.
What about a runaway stock market? This is when the stock market does not pullback but just keep grinding its way higher and higher… The only thing you can do is sit in cash, or look for a stock or sector that is having a small pause or pullback and get long with a small position until you get that broad market pullback and major by signal to add more.
Below are a few sectors showing a minor pause/pullback within this bull market.
Mid-Week Trend Conclusion:
Overall, the broad market remains in an uptrend. While I would like to see the SP500 pullback and give us another major buy signal like it did in December and February I do mind that much if prices keep running higher as it just give us more cushion and potential profits for when the trend does eventually roll over and flip signals. I hope you found this report interesting. It’s just scratching the surface of this topic but it’s a start.
Click Here to Review the Video
Wednesday, March 13, 2013
Click Here to Review this Video and ETF Trading Software
Our 5 Favorite ETFs Launched in the Past 6 Months - by Morningstar Investment Research
Some new funds may help protect against the long-term effects of quantitative easing. Others offer access to low-cost baskets of emerging-markets stocks and high-dividend-paying companies.
In an ETF Specialist article last June, we published a list of Morningstar's five favorite exchange-traded funds that had been launched in the previous year.
At that time, issuers had launched a slew of exchange-traded products--more than 240 in total--over the previous 12 months. With such a bevy of new products available to investors, we sifted through those launches to come up with five ETFs that to our way of thinking represented the best in innovation, were good uses of the ETF vehicle, offered relatively inexpensive price tags (or in some cases, were downright cheap), and were reasonably distinctive.
Since that time, things have changed in the ETF world. For one, the pace of new launches has slowed down considerably--in the past six months, just 54 exchange-traded products have launched. That implies an annual run rate of just over 100 launches, or less than half of the ETF industry's product-launch rate during 2011 and the first part of 2012. What's more, the number of liquidations of exchange-traded products has stepped up significantly. This environment suggests that issuers have become less interested in throwing anything at the wall to see what sticks. They strike us as being more likely to be thoughtful and judicious about the launches behind which they will allocate resources and less willing to prop up money-losing products.
Even in a reduced-launch environment, however, some interesting new ETFs have launched recently that we think are worthy of investors' consideration. Below we highlight five new offerings from the past six months that offer investors something new--either access to a useful strategy or a new low for an expense ratio. What's more, these all are funds we feel comfortable recommending to investors.
Easing Any Pain From Quantitative Easing: TIPS, Foreign Currency, and Bank-Loan ETFs
In the United States, quantitative easing is continuing, and the Federal Reserve has signaled its desire to keep interest rates low for the next year or two. No one knows whether quantitative easing will result in higher inflation, higher interest rates, and the debasement of the U.S. dollar, but many investors are concerned about these potential outcomes.
Shorter-duration Treasury Inflation-Protected Securities ETFs are less exposed to interest-rate risk, relative to longer-duration TIPS funds, and tend to be more strongly correlated with inflation than long-term TIPS, according to recent research from PIMCO. One new launch in the past few months, Vanguard Short-Term Inflation Protected Securities Index ETF (VTIP), offers much to like, with both its average maturity and its average duration clocking in at 2.6 years. VTIP's 0.10% price tag is especially appealing, as it's just half the cost of several large and liquid ETF competitors.
With most investors' portfolios dominated by fixed-rate bonds that face price risk from rising interest rates, investors may want to consider diversifying their bond portfolios with floating-rate securities. One corner of the floating-rate market that has attracted interest from ETF investors is the area of bank loans. Also known as senior loans or leveraged loans, these variable-rate, senior secured debt securities are issued by highly leveraged companies. As such, this asset class is suitable for investors comfortable with the risks associated with below-investment-grade bonds. However, a basket of bank-loan securities in an ETF or mutual fund can offer decent yields for income-hungry investors. What's more, in a rising-rate environment, bank loans tend to outperform fixed-rate securities. An interesting recent launch in this space is Highland/iBoxx Senior Loan ETF (SNLN). It's the ETF marketplace's second passively managed fund devoted to bank loans, after PowerShares Senior Loan Portfolio (BKLN), which launched in March 2011 and has drawn significant inflows. Both the Highland ETF and BKLN are structured very similarly, tracking rules-based indexes of large, liquid leveraged loans. However, SNLN is cheaper at 0.55%, compared with BKLN's 0.66%. Our only area of concern with this fund relates to the general illiquidity of bank loans.
For investors concerned about the long-term outlook for the U.S. dollar, a recently launched ETF that we like is PIMCO Foreign Currency Strategy ETF (FORX). The only actively managed currency ETF holding multiple currencies, FORX holds currencies expected to appreciate relative to the dollar, along with local currency bonds. This fund's appeal comes from its diversification and the fact that it can benefit from the best of PIMCO managers' collective wisdom on where currencies are headed. A caveat: investors should always be mindful of currency investments' dismal long-term expected returns (effectively zero after adjusting for interest-rate differences), the dollar's general role as a safe haven during crises, and the fact that faster-growing foreign countries' currencies don't always appreciate relative to the dollar. However, by the same token, there's clear proof that some active managers can generate positive long-term returns by investing in currencies. In the mutual fund space, Franklin Templeton Hard Currency (ICPHX) is a great example of a currency fund that has taken advantage of the dollar's decline over the past 10 years and generated positive long-term returns. FORX, whose 0.65% price tag is far below the Templeton mutual fund's 1.06% expense ratio, will follow a similar strategy at a reduced cost.
A Cheaper MSCI Emerging-Markets ETF
In general, we are constructive on emerging markets, which enjoy many long-term growth drivers. We also expect improving growth rates in the coming one to two years in many emerging-markets countries, following accommodative monetary and fiscal policies over the past year. In addition, concerns about a hard landing in China have ebbed. With emerging-markets equity valuations low and a better macro outlook, the picture looks bright for the coming months. That said, emerging-markets countries' economies are always at risk of being affected by global market events, which tend to have an outsized negative impact on emerging markets. Slower global growth also can be a headwind.
IShares Core MSCI Emerging Markets ETF
(IEMG) launched last fall as a part of iShares' way of responding to price competition without giving up fee revenue from existing iShares funds that offer that same exposure. IEMG, which seeks to replicate a market-cap-weighted index of emerging-markets stocks, costs 0.18%, just a fraction of the 0.66% price of the popular IShares MSCI Emerging Markets Index (EEM). The biggest difference here is that IEMG includes small caps, whereas EEM does not. Over the past few years, an all-cap emerging-markets portfolio has very slightly outperformed a large- and mid-cap index on a risk-adjusted basis. The new fund also is positioned squarely up against Vanguard FTSE Emerging Markets ETF (VWO), which tracks a different index and also charges 0.18%.
High Dividend Yields and Low Volatility, All in One
With low Treasury yields, investors have flocked to high-dividend-paying ETFs for income. They also have embraced low-volatility stocks, as they've come to understand a persistent market inefficiency. Over the past 50 years, the market's least-volatile stocks have performed about as well as the market, but with considerably less risk, likely because of leverage aversion. Capitalizing on this phenomenon is the final new launch that we like, PowerShares S&P 500 High Dividend Portfolio (SPHD). The new ETF is similar to the most popular low-volatility ETF, the $3.6 billion PowerShares S&P 500 Low Volatility (SPLV). The new fund replicates an index that draws constituents from the S&P 500 Index and then screens for factors relating to dividend payouts and volatility. In particular, the index draws the companies that have shown the lowest realized volatility and that also have produced high trailing 12-month dividend yields. The benchmark then weights constituents by dividend yield. Holding 50 companies, the fund is far more concentrated than SPLV. It also offers different industry weightings than SPLV, holding more financial companies and fewer consumer staples firms. The fund charges an attractive 0.30%. We'd caution investors in this fund to be prepared when markets rise. Historically, during extended bull markets, the least-volatile stocks tend to post extended periods of underperformance.
Click Here to Review More Exchange Traded Funds Resources
Tuesday, March 12, 2013
Click Here to Get It
One of the Forex education industry's top experts just announced that he's GIVING AWAY his most popular Forex trading method.
* It's the same method that thousands of people paid a real value of $500 for in the past.
* It's been "battle-tested" over the past 5 years and is up to 86% accurate in spotting "profit pockets" in the best 8 Forex markets.
Click here to download the 2-step "blueprint" and watch the companion "how to" video that reveals exactly how to begin using it TODAY:
This is easily one of the most "real value" Forex giveaways I've ever seen, so make sure you DOWNLOAD the "blueprints" and save them to your computer while they're still online.
Click Here to Review More Valuable Forex Resources
Monday, March 11, 2013
Click Here for a Free Trial of the "Profit Rockets" Stock Picks Service
Zacks Investment Research asks how can you tell the economy is back? Because consumers are buying RVs again. Winnebago Industries, Inc. ( WGO ) managed to make it through the Great Recession, gobbling up market share along the way. This Zacks Rank #1 (Strong Buy) is now poised for triple digit earnings growth in 2013 as RV sales rebound.
Winnebago's brand recognition is so strong that when you think of RVs it's the first name that comes to mind. Founded in 1958 in Iowa, Winnebago manufactures a variety of recreation vehicles ("RVs") including motor homes, travel trailers and fifth wheel products.
Given consolidation in the industry during the Great Recession, Winnebago was able to add to its market share and now has about 20% of the RV market.
Baby Boomers And The Economic Recovery
Motor home sales peaked in 2004 at 69,000 and plunged during the Great Recession. By 2011, only 25,000 motor homes were shipped. But that number is expected to slowly rise as the economy improves and the Baby Boomers age.
The key segment of RV buyers is 55 to 64 years of age. The Baby Boomers are just on the cusp of reaching that age range right now with more to come in the next few years. That's a built-in market for RVs.
Additionally, the stock market has recovered its pre-recession highs and housing is starting to recover, both which will free up cash for Baby Boomers to take to the road.
All of this adds up to good things for the RV manufacturers. The RV and manufactured home industry has a top Zacks Industry Rank of 9 out of 265 industries.
Blew Out Fiscal First Quarter 2013
On Dec 20, Winnebago reported fiscal first quarter 2013 results and blew by the Zacks Consensus Estimate by 189%. Revenue surged 46.8% to $193.6 million in the 14-week quarter from $131.8 million in the 13-week quarter a year ago.
Inventories at dealerships are low and demand is rising. The company has had to hire additional employees to meet production demands the last two quarters. It also warned that production would slow during the winter holidays due to employees taking time off.
Given the grim years of the Great Recession, having too many orders is certainly a problem the company will gladly deal with.
2013 Zacks Consensus Estimate Rises
The tide is turning in the RV industry. Just 90 days ago, the analysts were not as bullish. The Zacks Consensus Estimate for Fiscal 2013 was just 47 cents. But given the big beat in the first quarter, the estimates surged to 80 cents.
That is earnings growth of 220% as Winnebago earned just 25 cents in 2012.
While the short term picture looks bright, the longer term outlook past 6 months is also strong for Winnebago. It has a Zacks Recommendation, which looks out further than the Zacks Rank, of Outperform.
Shares At Multi-Year High
Given the rally in the overall markets and the positive news in the RV industry, it's not surprising that shares of Winnebago have rallied to new 5-year highs.
It's not a cheap stock. It has a forward P/E of 26 but that is in line with Winnebago's 10-year average. It does have one good value metric, however. Its price-to-sales ratio is just 0.9. A P/S ratio under 1.0 usually indicates value.
Having survived the rough years of the Great Recession, Winnebago is perfectly positioned to cash in on the economic recovery and the aging of the Baby Boomers.
For investors looking to add a consumer-related stock to their portfolios, Winnebago is one that checks all the boxes.
Click Here for a Free Trial of Zacks Investment Research
Friday, March 08, 2013
Click Here for a Free Trial of Track n Trade's Candlestick Auto Recognition Trading Software
Profits Run is going to show you the stock trading strategy using Candlesticks. When looking at a chart we need to determine which type of charts we want to use. There are many different choices that we can use including line charts, bar charts, range charts and candlestick charts. Candlestick charts seem to be one of the more common types of charts used and one that you should at least be somewhat familiar with.
As traders, we need become familiar with the type of charts we are going to be using in order best understand what the charts are trying to tell us. By choosing one type of chart it can make reading the charts a bit easier.
The candlestick charts have been around since the 18th century and are thought to originate with Japanese rice traders. From then until now the use of candlestick charts have evolved into an elaborate way to identify trading opportunities. These ways include individual candlestick patterns and multiple candlestick price patterns.
In looking at an individual candlestick you will see commonly used data that forms the candlestick itself. Take a look at the pictures below to see how these are formed.
Notice that each candle, both the up and down candles, have a body which is a solid rectangle. They each also have what is called a wick or shadow. The body of the candlestick show where the price opened and where it closed. For an up candle (green) the open is at the bottom of the body and the closed price is at the top of the body. For a down candle (red) the open is at the top of the body and the closed price is at the bottom of the body. The wicks are the same for both the up candle and down candle, the top of the wick or shadow is the high price and the bottom of the wick or shadow is the low price for the candle.
Each candle represents a specific time period. Candlesticks generally range from 1 minute to 1 months. This means that the candles can look a lot different depending upon the time frame used.
In addition, candlestick can give traders an idea of the momentum or lack of momentum for the given time period. Take a look at the picture below to see how the different momentums can look with candlesticks.
With lots of momentum you can see large bodies created and with little momentum you can see small bodies. This can give the trader an idea of the amount of interest in a certain currency pair. You can also identify when there might be lots of volatility for a specific time by looking at the size of the wicks or shadow. Take a look at the picture below to see how this might show up on a candlestick.
With these candlesticks you can see that there was lots of movement without much change in price. This might indicate that there was lots of volatility happening for that specific time period.
Candlesticks may or may not be for you but now you have an idea of what they are and how you might use them. Take some time to practice with them to see what you think.
Click Here to Review More Candlestick Trading Resources and Softwares
Thursday, March 07, 2013
Final Stages of The Advance on SP 500 - The Wave Pattern by Market Trend Forecast
We have been projecting a potential rally pivot at 1552-1576 for many weeks now. The recent drop to 1485 although harrowing, was a normal fibonacci re-tracement of the last major rally leg to 1531 pivot highs. We believe that this 5 wave advance 1343 pivot lows is nearing an end based on mathematics and relationships to prior waves 1-3.
At 1569 the SP 500 would mark a perfect fibonacci relationships to waves 1-3 for this final 5th wave to the upside. In the big picture, we are still working higher off the 1010 pivot lows on the SP 500, and this rally takes 5 full waves to complete. We think we are near wave 3 highs, and wave 4 correction would be up next, followed by another thrust to highs if all goes well this year.
That all said, a multi-week correction and consolidation wave 4 pattern is likely once we pivot at 1552-1576. We should expect this correction to retrace anywhere from 80-100 points on the SP 500, but one week at a time.
Click Here for a Free Trial of Our "Profit Rockets" Stock Pick Service
Wednesday, March 06, 2013
By Mitch Zacks of Zacks Investment Research
The quantitative easing programs that are being implemented by central banks throughout the developed world have the unintended consequence of potentially starting a currency war.
A currency war basically means each country is devaluing their currency in an attempt to increase exports. This potentially could have negative consequences for investors and could lead to geopolitical conflicts.
Today, we will help you understand the currency war and how investors should respond.
Dissenting Fed Opinion
The FOMC (Federal Open Market Committee) oversees the trading desk in New York that buys U.S. Treasuries and mortgage backed securities on behalf of the Federal Reserve. In the latest meeting, Fed leaders decided to take the unique action of purchasing $85 billion in bonds each month until 2014.
Esther George, who heads the Kansas City Federal Reserve Bank, spoke in a dissenting opinion in the FOMC minutes. This dissenting opinion caused a selloff in the market. Esther is concerned that the massive monthly bond buying could spark a currency war and have a negative impact on stability of the global financial market.
Unfortunately, it appears to be the case that Esther’s cause for concern is reasonable. We are currently witnessing a sizeable effect in the world’s currency markets.
How a Currency War Happens
The current interest rate environment has created an arbitrage model for traders. Essentially, profits can be made by selling short a developed country bond, and buying an emerging market bond.
Developed countries, like the U.S., Japan and European nations, have more or less guaranteed low short-term interest rates. The central banks have communicated that these cheap fixed money rates extend to 2014 or 2015. To a savvy bond trader, the cheap short-term money can be borrowed, leveraged up, and then used to buy high interest rate paying bonds from an emerging market government or corporation.
The larger the spread of the interest rates, the better the return. The better the return, the faster the hot portfolio money flows into the currency that the high interest rate bond is priced in. The net result is the emerging market currency appreciates.
For example, consider a trader that borrows from Japan’s banks with a low interest rate of less than 1%. The trader then goes to a Brazilian bank and asks to convert the Japanese currency (Yen) into Brazilian currency (real), and uses the money to buy Brazilian bonds, real estate or stocks.
This causes an inflow of capital into the Brazilian banking system causing the Brazilian real to appreciate. The appreciation of the real will cause Brazil’s exports to be relatively more expensive and Brazil’s exports to plummet. Correspondingly, Brazil’s GDP growth falls as well.
On the other hand, the shift in currency rates is beneficial for developed countries, like the U.S., as it depreciates the dollar and improves export prices. Developed countries exports become cheaper in this scenario.
In a currency war, the exports of developed countries become cheaper while the exports of emerging market countries become more expensive. This causes geopolitical conflicts to rise as exports by developed countries increase at the expense of emerging market exports. Unfortunately, a currency war is a zero sum game.
Emerging Market Conflict
It is important to remember that many emerging market nations, such as Brazil, have huge income inequality issues. Their leaders need strong GDP growth to deal with their citizens and to pay for their burgeoning social programs.
In other words, the artificially low interest rates created by the quantitative easing programs in the U.S. and Japan erode the developing world’s social gains. This causes internal conflict in the emerging markets which could include China, India, and South Africa.
It is possible the recent increase in Chinese computer hacking that we have seen in the U.S. has been triggered by our quantitative easing.
The net effect of a currency war is that you want to allocate more towards developed markets than emerging markets. However, we believe the current situation is more likely to result in “muddle through” economies as governments deal with the impact. Effectively, we don’t believe a full blown currency war will occur.
Will Quantitative Easing End?
In the U.S., the Fed has made it clear that quantitative easing will continue until we see a strong positive change towards the U.S. economic thresholds. We don’t foresee that landscape changing for at least a year. With sequestration occurring, and fourth quarter GDP coming in at an anemic level, we don’t expect quantitative easing to end until 2014.
Keep these broad numbers in mind: U.S. GDP growth for 2013 is expected to be +1.9%; Japan GDP growth is expected to be +1.2%; and Europe GDP is expected to be -0.5%. These poor growth numbers will keep the quantitative easing programs in place.
At the end of the day, currency effects from low interest rates should be a positive for U.S. exports and the U.S. economy. There is still a great deal of opportunity in international investments, but it is important not to over-allocate internationally despite a depreciating dollar.
Click Here to Review More Currency Trading Resources
Tuesday, March 05, 2013
3 Sentiment Indicators Warn of a Punch to Stock Portfolios by Elliott Wave International
Warren Buffett . . . When this billionaire talks, investors listen.
And here is what he's been saying:
'If you're asking me if stocks are cheaper than other forms of investment, in my view the answer is yes. We're buying stocks now. ... We're buying them because we think we're getting good value for them.' CNBC, March 4
Some investors on the sidelines may take Buffett's sentiment as a cue to buy stocks. Then again, many individual investors have already acted: Stock fund inflows saw a big jump at the start of 2013.
Retail investors fully embraced February's bull market, looking past any threat from the sequester crisis in Washington, D.C., and buying stocks more aggressively than they have in three years, according to a sentiment index from TD Ameritrade. CNBC, March 4
Professional investors have also placed bullish bets. Mutual fund cash levels recently fell to an all-time record low of 3.3%. Some of those professionals still believe stocks have a long way to rise.
General-interest magazines are shouting “BUY!” and money managers are predicting a Dow as high as 60,000. They say there is no alternative to stocks. Elliott Wave Theorist, February 2013
Other sentiment measures also indicate extreme bullishness. One such measure offers a lesson from the past.
Short sales in the Standard & Poor’s Composite 1,500 Index fell to 5.6 percent of shares available for trading in February, down from a record 12 percent during the credit crisis and the lowest ever in data compiled by Bespoke Investment Group and Bloomberg starting six years ago. The last time the number of shares borrowed and sold short approached this level, the equity gauge lost 3.3 percent in the next three months. Bloomberg Businessweek, March 4
Robert Prechter notes that, "Sentiment measures are not pinpoint indicators, but they tell you the background ..."
In a special double-issue of the Elliott Wave Theorist, he describes in vivid detail what that background is.
You can read all 22 pages and see each of the 31 charts in the latest Theorist with no obligation for 30 days. Click here to get started now.
Click here to review more Elliott Wave trading resources and software.
Monday, March 04, 2013
Click Here for a Free Trial of the "Profit Rockets" Stock Pick Service
Zacks Investment Research reports many investors were worried that the Fiscal Cliff deal would be devastating to consumer discretionary firms. The prospect of higher taxes was expected to cut into many paychecks, and curtail spending levels in the process.
This has not been the case through the first two months of the year though, as many consumer discretionary firms, and particularly several in the restaurant space, have seen great starts to 2013. This has especially been the case for the small but surging Red Robin Gourmet Burgers (RRGB).
If you haven’t heard of Red Robin, don’t be worried. The firm isn’t exactly McDonald’s (MCD), or even Wendy’s (WEN), in terms of its scope, as the Colorado-based company has less than 500 total restaurants. Still, the number of Red Robin locations is quickly surging as many consumers are embracing their lineup of burgers and various other lunch and dinner items.
Not only have customers found the burgers delicious, but investors certainly have as well. The company has seen its share price nearly double (up 80%) in the past two years, nearly quadrupling the broad market’s performance in the same time frame.
Yet even with this impressive performance, RRGB likely still has plenty of room to run. The company has a market cap just a tad over $600 million, so it is clearly has a long way to go before it reaches its growth limit.
Analysts generally tend to agree with this sentiment, at least when looking at recent estimate revisions. Of the nine estimates for the June quarter, eight have been increased in the past 30 days, while nine of 11 estimates have gone up for the full year in the same time period.
While it is true that the current quarter is a bit choppier, there is universal agreement among analysts for the longer term picture. This suggests that investors can still get in on this stock for the longer term, even if there is some volatility in RRGB over the next few weeks.
Still, even with the clouded short term earnings picture, investors should note that RRGB has a stellar record when it comes to earnings surprises. Over the past four quarters, the company has averaged a 23.9% surprise, so it definitely has a history of beating to the upside.
Thanks to this history of positive surprises and the agreement among analysts, Red Robin Gourmet Burgers currently has a Zacks Rank of 1 or ‘Strong Buy’, suggesting outperformance in the short to medium term. This is further confirmed by the relatively positive ranking of the restaurant industry from a Zacks Industry Rank perspective, meaning that RRGB is in pretty good company.
It is true that RRGB has been a solid performer, but we expect this to continue over the medium term. The company has clearly found a winning combination with its restaurants, and expansion possibilities are pretty much endless at this point in time.
Analysts seem to agree on the prospects of Red Robin too, as the company is viewed very favorably by those following the stock. So consider taking a closer look at this small cap company if you want a high growth—but volatile—play that is poised to continue its run as we push further into 2013.
Click Here for a Free Trial of Zacks Investment Research