S&P 500
1959.47
+8.65 +0.44%
Dow Indu
16766.43
+88.53 +0.53%
Nasdaq
4470.66
+17.87 +0.40%
Crude Oil
80.80
-1.29 -1.58%
Gold
1231.13
+0.68 +0.06%
Euro
1.267220
+0.001545 +0.12%
US Dollar
85.700
-0.132 -0.17%
Weak

CF Cycle for Life - INO Cares

It was a beautiful morning! Although chilly and very windy, it was still a great day for a bike ride. We bundled up, broke out the spandex and jumped on our bicycles to participate in the Cystic Fibrosis Ride for Life at Herrington Harbour in North Beach, Maryland. Our November INO Cares project was a great success. We helped the Cystic Fibrosis Foundation raise over $40K and we had two newbie cyclists each finish a 20 and 40 mile race! Family and friends came to cheer on our riders and join us for a great after-party.

The Cystic Fibrosis Foundation is a fantastic organization that funds research in hopes of finding a cure to this fatal genetic disorder. Learn more about the Cystic Fibrosis Foundation and the nationwide Cycle For Life events.

In The Week Ahead: No Clear Sign Of A Market Bottom

All major U.S. stock indices finished in the red again last week except for the Russell 2000, which gained 2.8%, reversing the pattern that we have seen for most of this year where small-cap stocks lag the market. This emerging strength in small caps may be a good sign for the market between now and year end. But, for now, the broad market SP 500, blue-chip Dow industrials and tech bellwether Nasdaq 100 are all negative for 2014 with no clear sign of a bottom in sight.

All sectors of the SP 500 posted losses last week except for industrials, materials and utilities. One potential bright spot is that my own ETF-based metric shows the biggest inflow of investor assets last week went into energy. Should this continue, it may be a leading indication of a fourth-quarter buying opportunity in this downtrodden sector. Stay tuned.

Keep Your Eyes Focused on Europe

In last week's Market Outlook, I discussed a bearish head-and-shoulders formation in Germany's DAX index that targeted an additional 11% decline to 7,800. I said the positive long-term correlation between the DAX and the SP 500 implied that the broader U.S. market may also be vulnerable to more weakness.

Despite last week's modest rebound, the 7,800 downside target remains valid as long as the March 14 and Aug. 8 lows near 8,913 loosely contain the index on the upside.

The next chart shows the SPDR Dow Jones Industrial Average ETF (NYSE: DIA) broke down last week below the $165.51 support level that I first identified in the May 12 Market Outlook. The ETF has key resistance at $165.63 to $168.78, which contains the 200-day moving average (major trend proxy), the 50% and 61.8% Fibonacci retracements of the Sept. 19 decline, and the 50-day moving average (minor trend proxy). [Read more...]

Article source: http://www.streetauthority.com/node/30487118

4 Lessons From Buffett That Every Investor Needs To Know

By: Eric Winter of Street Authority

Behind each trade or investment, they are there... lurking, waiting to reveal themselves during a moment of weakness.

They are the four fears of investing.

I learned about these early into my trading career, and I've been a victim of each one over time. All drama aside, they affect every investor or trader who actively manages his or her own money.

In no particular order, the four fears are as follows:

1. Fear Of Loss
2. Fear Of Missing Out
3. Fear Of Letting A Profit Turn Into A Loss
4. Fear Of Being Wrong

Despite their prevalence, there are fortunately many methods to help conquer each of these fears. One of these tools comes from the long career and immortalized wisdom of the Oracle of Omaha himself.

While I can't be 100% sure what Warren Buffett would say in regard to each of these problems, we can use his bank of interview quotes and newsletter excerpts to infer what the billionaire would say about understanding and conquering each problem. [Read more...]

Article source: http://www.streetauthority.com/node/30486500

Dividend Investors Rejoice: Falling Markets Mean Rising Yields

By: David Sterman of Street Authority

In the early stages of the bull market, investors flocked to companies with steady and growing dividends. Yet, since the market began to think about an eventual rise in interest rates back in May 2013, this asset class has lost a bit of luster.

The concerns were quite logical: A steady rise in fixed-income yields naturally reduces the appeal of relatively riskier stocks.

But the emerging economic crisis in Europe changes everything. It's increasingly apparent that European economic troubles are here to stay for quite some time, which is likely to keep a lid on global interest rates. It's a bit of a goldilocks scenario for the U.S. economy, as low rates will help our economic recovery to expand without a rate rise headwind.

You would suspect that the pullback in interest rates would help provide support to dividend-paying stocks, but many of them haven't been able to escape the recent market rout. If you've been tracking divided payers but found their dividend yields to be too skimpy, you're in luck. The market slump pushed many 2% yielders into the 3% range, many 3% yielders into the 4% range, etc. In the context of falling fixed income yields, such dividend yields are now comparatively appealing again. [Read more...]

Article source: http://www.streetauthority.com/node/30486109

The Winners And Losers Of The Perfect Storm Hitting Oil Prices

By: David Sterman of Street Authority

When it comes to commodities, you'll usually find a set of countervailing forces that keep prices at an equilibrium. Yet when it comes to oil, all of the factors behind price swings are heading in the same direction.  As oil prices head lower yet, investors will feel both pain and gain -- depending on the make-up of their portfolios.

A Perfect Storm

For much of the past year, a barrel of West Texas Intermediate Crude fetched around $100 a barrel on the spot market. Yet since late July, a series of factors have conspired to push prices lower:

-- A rally in the dollar, which tends to push all commodity prices lower.

-- A further slowing in the European, Japanese and Chinese economies, which crimps demand.

-- A surge in output in Libya to 800,000 barrels a day, up from 240,000 barrels a day in June amid civil war skirmishes near key oil installations.

-- An oil production surge in Russia, which is back at peak post-Soviet era levels.

-- A rapidly rising output in Kurdistan as new key oil installations come on line.

-- OPEC's recent inability to curtail production as much as the market had hoped, leading to talk that this cartel may be weakening as market share becomes more important than pricing discipline.

Of course, the elephant in the room is the United States, which is single-handedly disrupting the global supply and demand trends on a massive scale. U.S. oil production has already surged from five million barrels a day in 2008 to 8.5 million barrels a day in August 2014, according to the Energy Information Administration. The more we produce, the less oil we import. Analysts at Citigroup note that oil imports are now nine million barrels per day lower than they were in 2007. It’s important to note that some of the reduction is due to a drop in consumption as we now drive more fuel-efficient cars. [Read more...]

Article source: http://www.investinganswers.com/investment-ideas/commodities-precious-metals/winners-and-losers-perfect-storm-hitting-oil-prices

4 Variables That Could Affect Your Portfolio This Earnings Season

By: David Sterman of Street Authority

Over the past few years, a predictable trend has dominated earnings season. Analysts lower their profit forecasts in the weeks and months ahead of quarterly results, and then companies manage to slightly exceed the lowered set of expectations. It's happening again.

According to FactSet Research, on an aggregate basis, analysts lowered Q3 profit forecast by 4.2%, slightly above the typical 2.7% downward revision of the prior 20 quarters. In theory, lowering the bar further should boost the chances that companies manage to exceed current consensus forecasts.

But the typical "cut and beat" game may not be the key theme this time around. As third quarter earnings season gets underway later this week (as Alcoa (NYSE: AA) weighs in on Wednesday, October 8), a range of cross-currents promise to make this one of the more unpredictable earnings seasons in quite some time. Both positive and negative factors are likely to keep analysts and investors on their toes. This is not time to take a casual approach to earnings season. After rising 6% in the first six months of 2013, the SP 500 rose less than 1% in the third quarter.

Here are four key themes you need to monitor to help get a sense if the SP 500 can resume its upward trajectory in the fourth quarter: [Read more...]

Article source: http://www.streetauthority.com/node/30484997

Catalyst Check: Natural Resources Watchlist at Three Months

The Gold Report: Joe, some of your picks from the Natural Resources Watch list have performed quite well. Do you want to give us some updates?

Joe Mazumdar: Junior mining sector equities in the gold space, as proxied for by the Market Vectors Junior Gold Miners ETF (GDXJ:NYSE.MKT), have outperformed gold since the June Cambridge House conference. The inter-period high for gold was $1,3351,340/ounce ($1,3351.340/oz), about a 7% return. Gold is down about 3% since the conference, on the back of a strong U.S. dollar.

The benchmark Market Vectors Junior Gold Miners ETF experienced an inter-period high of about $45/share, generating a 30%+ return since the conference. But it is currently flat again. On both metrics, the ETF has outperformed the gold price. Our selections averaged an inter-period high of 50%, which included under-performers (+1826%) and some significant outperformers (+70115%). Currently, the average return for our selection since the conference is a more modest 1415%. [NOTE: Figures cited were current 9/30/14.]

TGR: During that panel discussion, you called explorers a lottery ticket and Cayden Resources Inc. (CYD:TSX.V; CDKNF:OTCQX) was a lottery ticket that paid off. What was your other "lottery ticket" pick? [Read more...]

Article source: http://feedproxy.google.com/~r/theaureport/Ajgh/~3/C7xJewqlB2g/16311

The Bottom May Be Falling Out -- Here's What To Do

By: David Sterman of Street Authority

Just a few months ago, all was quiet on the investing front, as most market indices continually broke new all-time highs. But in early August, the quiet was broken by a sudden surge by the dollar against the euro, the yen, Australian dollar and other currencies. At the time, the rallying dollar was merely seen as the beneficiary of a relatively robust U.S. economic growth rate in 2015, at least compared to Europe and Japan.

In hindsight, the currency shifts now appear to be the result of something more concerning: European economic activity has slowed to a crawl, the Chinese government is leaning towards a policy of reform over stimulus -- compounded by brewing political troubles in Hong Kong -- and U.S. investors are finally waking up to the reality that global economic growth will likely be subpar in 2015.

That dim view may also explain why West Texas Intermediate Crude Oil has now slipped below $90 a barrel for the first time in 17 months. Then again, oil prices may be slumping because the dollar is rallying, which always hurts the price of commodities such as oil. Or perhaps it's the fact that too much oil is being produced at a time when global demand is slackening.

In other words, there are now a number of moving parts in play, and the factors behind these recent shifts are likely to persist. How you position your portfolio for the changing market can spell the difference between capital preservation and capital erosion. [Read more...]

Article source: http://www.streetauthority.com/node/30484387

The Best Strategy For Reliable Income In A High-Risk Market

By: Zachary Scheidt of Street Authority

The covered call strategy is a reliable way to generate income in your investment account on a monthly basis. Basically, this investment approach captures income by selling call option contracts, which speculators purchase in hopes that they will generate outsized returns as stock prices advance. By selling call options, we allow these speculators the chance to make large profits, while we collect high-probability income payments.

Here's how the covered call process works: We purchase shares of stock the same way a traditional investor would. We then sell call option contracts against these shares (one for every 100 shares that we own). Selling these contracts obligates us to sell our stock at the option's strike price, provided the market price is above this level before the option expires.

This approach puts a cap on our potential return because regardless of how high the stock trades, we will still be obligated to sell at the strike price. However, since we are receiving a payment from selling the call contract, known as a premium, this income is very reliable and gives us a much higher probability of a positive return on our investment. So the covered call approach sacrifices the potential for a very high return in exchange for a more stable, reliable income stream.

Choosing Which Call Option Contract to Use

Option contracts are available on a monthly (and in many cases, weekly) basis, giving us more choices in terms of which contracts we want to sell. Traditional call option contracts expire on the Saturday after the third Friday of each month.

When implementing a covered call trade in our account, we must choose an expiration date. Typically, the more time left until expiration, the higher the price will be for the call option. This is because the contract is more attractive to buyers, because a longer time horizon allows the stock more time to trade higher, giving the owner a greater chance to profit. From our perspective as call sellers, a higher price means that we receive more income from selling the contract. [Read more...]

Article source: http://www.streetauthority.com/node/30483947

Why There's Upside To Silver's Four-Year Lows

By: David Sterman of Street Authority

Even as investors were re-embracing stocks in 2010 and 2011, they scored really big gains with one of the hottest commodities in the world: Silver.

The precious metal soared in price from under $20 in August 2010 to nearly $50 an ounce by the next spring. In the hindsight, the silver spike was a classic bubble, fueled by inflation concerns that simply never materialized.

Though few people could have guessed that silver would be capable of a 150% nine-month gain, few also would have predicted that the eventual slump in silver would be so extended. Silver prices fell back below $30 an ounce by the start of 2013, and they've been in freefall ever since. A snapback to 2011 peaks is out of the cards.

You can get a sense of just how painful the silver slump has been by glancing at the performance of key exchange-traded funds (ETFs). The leveraged (2-times and 3-times) funds have been among the market's worst performers.

And when it comes to the silver producers themselves, it appears as if sentiment has utterly collapsed. In recent weeks, industry share prices have slumped another 20%-to-30%. In contrast, the pullback in gold prices and shares of gold miners has not been nearly as severe. [Read more...]

Article source: http://www.streetauthority.com/node/30483117

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