S&P 500 The S&P 500 had a very volatile session on Wednesday, as we went back and forth and ended up forming a shooting star like candle. However, I do think that there is a significant amount of support at the 2120 handle, as denoted by the horizontal line on my chart. With this being the case, I believe that this market will continue to find buyers in this lower area, and once we see a bit of support, I’m not concerned about buying this market. Quite frankly, I believe that even though we’ve seen a lot of volatility here recently, but the reality is that the market is still very much in an uptrend. Because of this, I don’t r...
For generations, value investors have looked to the price-to-earnings ratio, or P/E, as a means to find value stocks. However, Benjamin Graham, long considered to be the “father” of value investing, found that a low price-to-earnings ratio wasn’t enough to unearth the true undervalued companies. Graham combined the low price-to-earnings ratios with the power of growth by using the PEG ratio. The PEG ratio is calculated by taking the price-to-earnings (P/E) ratio and dividing it by the growth rate. Normally, a stock with a PEG ratio under 1.0 is considered a “value”. With the S&P 500 and the NASDAQ trading at...
Five waves down from 0.8725 to 0.8330 confirms a change in trend from bullish to temporary bearish mode, so weakness is expected to continue if we consider that recent bounce from the low is already in three waves. Ideally A)-B)-C) rally is completed, but for final confirmation break beneath trendline support and below wave B) swing low is still needed to put bears in play. EUR/GBP, 4H...
The nation’s pre-eminent central planners just held their annual gathering at an exclusive resort just outside Jackson Hole, Wyoming and discussed how to interfere even more deeply in markets. In a speech entitled “The Federal Reserve’s Monetary Policy Toolkit: Past, Present and Future,” Fed chair Janet Yellen outlined why zero interest rate policy (ZIRP), purchases of toxic mortgage securities, and monetization of Treasury debt just aren’t adequate. Officials must add negative interest rates (NIRP) and purchases of even more sketchy assets to their “toolkit.” Yellen has spent more than a year floating the idea of negative rates...
On the basis of a measly 0.1% decline in the Case-Shiller 20-City Home Price Index, Bloomberg Econoday concludes speculation isn’t a risk. Why do I read keep reading Econoday? Entertainment value. Highlights Add Case-Shiller to the list of home-price data that are slipping. The 20-city adjusted index fell 0.1 percent in data for June for the third straight negative score. Year-on-year appreciation also continues to slip, down 2 tenths to 5.1 percent for the slowest rate since August last year. This rate peaked in January at 5.7 percent and, though still respectable, has been sliding since. Nine of the 20 cities show declines in the lates...
Bob Evans Restaurants (BOBE): The restaurant chain has fallen victim to changing consumer dining preferences. While earnings have beaten expectations in recent quarters, revenue has been sideways for almost 2 years now. The stock has been just as tepid, falling 11% in the past 12 months and nearly flat year to date. Early indications suggest tomorrow’s results will fall in line with recent performances. Management remains focused on returning to profitability in with both BEF Foods and its namesake Bob Evans Restaurants. This involves improving efficiency across the board and closing the doors on unprofitable locations. BOBE recently annou...
Psychological Risk is perhaps the biggest hurdle in trading for your own account. There are tons of books written about it. There are tons of essays discussing it and there’s even an academic study around this which is termed “Behavioral Finance“. I highly recommend taking the time to read the paper that was written by Ernst Fehr and Jean-Robert Tyran. The article is a discussion around the money illusion which I find to be a fascinating topic with how it relates to trading. Studies in behavioral finance have shown that many will inherently make the wrong choices when dealing with their own money especially when there’s risk involved....
Here’s one of the more intriguing trade setups that is out there in Goldman Sachs (GS). The consolidation was extremely tight over the past few days and now it is coming out of it quite nicely the potential for the $180’s in the coming days/weeks. You also have a major double bottom-pattern that comes in as standard-textbook formation. That has also confirmed with today’s move. Everything looks good on this chart including the intraday and weekly timeframes. ...
After last week’s surprise crude build (biggest in ~4 months) and builds across the entire complex, API reported a crude build of 942k barrels (just shy of expectations of +1.5mm) and while Cushing and Gasoline saw draws, Distillates saw a major 3mm barrel build (+275k exp). The initial reaction in crude was to extend the day’s losses, back below $46.50… API Crude +942k (+1.5mm exp) Cushing -620k Gasoline -1.6mm (-1.25mm exp) Distillates +3mm (+275k exp) Another Crude build but the big news was a major Distillates build… And the reaction in crude after a down day was an initial kneejerk lower… Charts: Bloomberg...