Mar 18, 2010

Daily Markets - Financial News And Opinions

Daily Markets - Financial News And Opinions

Why You Should Ignore The VIX As A Market Trend Indicator

Posted: 18 Mar 2010 03:45 AM PDT

A friend said “A major correction is coming.” When I asked how they knew, the answer was “Because the VIX (^VIX) has declined significantly from its high of near 80 at the end of 2009 and is now under 18″.

If it was so easy to predict future market direction from the VIX’s level then why should I spend so much time with trendlines, moving averages and, when needed, other technical indicators like stochastics and Fibonacci levels. The answer, not surprisingly, is that the VIX isn’t a … [visit site to read more]


A Long Buy For Core Holdings

Posted: 18 Mar 2010 03:01 AM PDT

In the spirit of the ever-increasing optimism towards China, I’m picking up a decent chunk of shares in a small cellular phone producer trading on the Amex. It’s trading at extremely low multiples to earnings and sales, as well as its price to book ratio.

Here’s the breakdown on the valuations:

P/E is 1.40
PEG is 0.35
Price to NAV Ratio is 0.29
Price to Sales is 0.17
Debt to Equity is 0.18

This is a low-debt, nimble little company who have produced some award winning cell … [visit site to read more]

Forex Trading: Eurozone Trade Balance

Posted: 18 Mar 2010 03:01 AM PDT

Eurozone trade balance, which was due out at 6 am, was released earlier than expected and was negative for February coming in at -2.3B versus the forecast of 5.1B and prior reading of … [visit site to read more]

Forex Trading: Eurozone Current Account

Posted: 18 Mar 2010 02:16 AM PDT

The eurozone current account was much worse than expected at -8.1B versus 2.9B and the previous showing of 2.3B but the market was unaffected by the … [visit site to read more]

Interview With Bruce Greenwald On The Future Of Value Investing, Warren Buffett’s Purchase Of Burlington Northern, And More

Posted: 18 Mar 2010 02:01 AM PDT

Me with Bruce Greenwald

Bruce Greenwald’s bio from the Columbia Business School’s website.
Professor Bruce C. N. Greenwald holds the Robert Heilbrunn Professorship of Finance and Asset Management at Columbia Business School and is the academic Director of the Heilbrunn Center for Graham & Dodd Investing. Described by the New York Times as “a guru to Wall Street’s gurus,” Greenwald is an authority on value investing with additional expertise in productivity and the economics of … [visit site to read more]

ETFs To Play The Job Bill

Posted: 18 Mar 2010 01:01 AM PDT

In an attempt to ignite the labor markets, Congress passed a $17.6 billion measure and sent it over to President Obama to sign into law, paving the path of opportunity in some sectors.

With unemployment lingering around 9.7%, spring break right around the corner and Congressional elections looming at the end of the year, the clock was ticking and policymakers decided to agree on the Job Bill. This Job Bill is expected to exempt businesses from paying the 6.2% payroll tax on newly hired … [visit site to read more]

Video: Ford Soars On Ratings Agency Upgrade

Posted: 18 Mar 2010 01:00 AM PDT

Ford Motor Co. and Ford Motor Credit Co. were upgraded by Moody’s Investors Service. Shares of the automaker soared to five-year highs. … [visit site to read more]

Be Careful What You Wish For

Posted: 18 Mar 2010 12:28 AM PDT

File these stories under "be careful what you wish for":

Now even the World Bank has called for China to re-value the RMB. Moreover, there have been calls within the US to get tough with China on a number of fronts, e.g. label her a "currency manipulator". Mish has an insightful post that discusses the effects of a possible Chinese re-valuation:

Let’s consider the global shock effect of a sudden large revaluation of the Renmimbi. The key is the RMB does not float. To get a 40% rise in … [visit site to read more]

Pure Price Update On Crude Oil’s Daily Trading Range

Posted: 18 Mar 2010 12:01 AM PDT

I often advocate taking a pure price look at a market in order to get information on the recent “character” and “behavior” that you might miss if you have too many indicators on your chart - something we all have done at one time.

Here is the 'price purism’ chart of the @CL crude oil futures contract (TradeStation):

You don’t need indicators to tell you the current structure of the crude oil market since November - it’s clearly a trading range with an upper boundary at the … [visit site to read more]

Is Warren Buffett Right About The Housing Market Recovery?

Posted: 17 Mar 2010 11:01 PM PDT

It’s one of the most pressing questions facing investors today.

Is the housing market about to recover?

With the housing market at the center of the credit crunch, any recovery in the housing market could quickly turn the Wall Street recovery into a Main Street recovery.

Consumers would start shopping again. Employment would rebound. And stocks would likely make the next move higher.

But we’re coming out of a genuine bubble decades in the making. And decades of overinvestment … [visit site to read more]

Euro Down On Bearish Bailout Comments

Posted: 17 Mar 2010 10:18 PM PDT

The U.S. Dollar finished down against most major currencies. From the start it was under pressure as trader demand for risk pressured lower yielding currencies. The early morning weakness in the Dollar helped to drive up demand for high risk equities and commodities. Tuesday’s move by the Fed to leave interest rates unchanged for a prolonged period of time set the tone for today’s weakness.
Overnight the EUR USD traded better on increased demand for higher yielding assets as well as improving … [visit site to read more]

Using ISE Put-Call Data For Gold Sentiment

Posted: 17 Mar 2010 10:05 PM PDT

I look at many things to track sentiment. In terms of Gold we have COTs and various sentiment surveys among other things. The ISE put-call data has been the most reliable for me as well as my subscribers. Here is an updated look at the ISE put-call for GLD.

In two of the past three days we have seen the two highest put-call readings over the last four months. Note that the 7-day moving average has accelerated higher in the past few weeks.

Obviously, no indicator is full-proof, … [visit site to read more]

Forex Trading: AUD/USD Continues Bullish Trend Run

Posted: 17 Mar 2010 09:05 PM PDT

Bullish price action on AUD/USD, a daily chart of which is shown, continues to follow a well-defined uptrend support line extending from the early February low. In the process, price has just reached a new 8-week high. This strong medium-term uptrend places the key 0.9325 area resistance in clear and immediate focus.

In the event of continued bullish momentum, right above the 0.9325 price region resides further major resistance in the 0.9400 region, which represents the 15-month high hit in … [visit site to read more]

Stock Picks For Thursday 18 March: Applied Materials, Level 3 Communications, Medivation

Posted: 17 Mar 2010 09:02 PM PDT

( click to enlarge )

Applied Materials (NASDAQ:AMAT) broke out of a range on Wednesday and could continue on Thursday. The stock hit a high of $12.69, which is resistance for Thursday’s follow through move. If the stock breaks resistance, expect to see heavy volume move the stock higher. Keep a close eye on AMAT as it can be a fast moving stock.

( click to enlarge )

Level 3 Communications (NASDAQ:LVLT) - Some signs of a reversal on price action mentioned on an earlier post did work out as … [visit site to read more]

Economic Calendar Events And Earnings For 03-18-2010

Posted: 17 Mar 2010 08:40 PM PDT

Economic Calendar for 03/18/2010

Consumer Price Index (CPI) - 8:30 am Consensus: 0.1%

Initial Jobless Claims - 8:30 am Consensus: 455K

Leading Indicators - 10:00 am Consensus: 0.2%

Philli Fed - 10:00 am Consensus: 18.0

Fed Presidents Speak - 8:30 am

Fed Official Elizabeth Duke Speaks - 11:30 am

Important Earnings

Pre-Open

- FedEx (FDX),

After-Close

- … [visit site to read more]

Video: The Day Ahead: U.S. CPI

Posted: 17 Mar 2010 07:00 PM PDT

The stories, data, and stocks that may have the greatest impact during the next trading session. … [visit site to read more]

Searching For A Fix

Posted: 17 Mar 2010 06:50 PM PDT

While the U.S. is not quite there (yet), a growing number of countries have reached the point where their ability to pay for the fallout from the financial crisis and past policy mistakes with loans and funny money is a challenge. So, as the New York Times notes in “Struggling Governments Get Creative to Raise Income,” they are resorting to plan B (or is it plan C, or D, or E?).

PARIS — France, promising to improve the environment, is planning to introduce a carbon tax. In Finland, where … [visit site to read more]
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