The rally since the lows has been like a runaway freight train, or maybe more like a charging bear. Speaking of, this is starting to smell like a bear market rally and today was the ideal spot to lay out some call credit spreads into Fibonacci and Elliott Wave resistance.
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Todd Gordon
In case you missed it yesterday, Alibaba Group Holding Limited (NYSE:BABA), took a 5% position in Groupon Inc. (NASDAQ:GRPN) which was enough to push this stock up 40%. Yesterday's action by Alibaba was seen as a black swan event that could not be predicted by any indicator. Groupon had been in a steady decline after hitting a peak of over $27 when it began trading. Since that time, the stock has steadily moved lower and recently traded perilously close to the $2 level.
As I have said many times before, perception is very important in stocks. The fact that Alibaba took a 5% stake in this company should not be overlooked.
Technically speaking all of the Trade Triangles turned green and positive yesterday for the first time in a long, long time. You also saw a 12 month downtrend line broken to the upside which also helped change Groupon's momentum.
With all of these positives happening to Groupon, how high can this stock go? Continue reading "This Stock Could Appreciate 50% In The Next 6 To 12 Months"
A large number of investors, talking media heads, and Wall Street analysts are predicting that the US toward another recession. Even the mention of the 'R' word (recession) sends fear through not only investors blood, but nearly all American's.
Why? Because soon after hearing the word most people begin remembering 2007-08 financial crises which sent the US economy into a 19-month recession, which to make matters worse from a psychological standpoint has been coined 'The Great Recession'. Furthermore, since the 2007-09 recession is still fresh on everyone minds and was terrible in terms of job lose, declining economic activity, low 401-K balances and stock prices, when the 'R' word is used now, everyone immediately thinks of all those terrible things happening again. This causes fear and panic to quickly set in.
From a market standpoint, this can send equity and commodity prices lower, further increasing the likelihood of a recession. (Think self-fulfilling prophecy.)
But let's stop right there for a moment and look at what is really happening with the markets. Continue reading "Stocks Are Down, Talk Of A Recession Coming! It's Time To Panic! Or Is It?"
Hello MarketClub members everywhere! Here we are starting a new trading week and the big news is a sharp rally in equities and a big pullback in gold. The question on everyone's mind is, "is this for real or just a rally in a bear market in equities and a pullback in the bull market for gold?"
Let's take a look at gold, first of all. I believe that the gold (FOREX:XAUUSDO) market has finally come to life again after hitting a peak in August 2011 and then losing the half its value over a period of four years.
Looking at a long-term chart of monthly gold prices you can see that (2) was the first time that gold had moved below the RSI 50 line. This long-term indicator was showing you that gold prices were in serious trouble. It is also worth noting that the RSI indicator (3) has stopped every rally in gold. I expect to see more consolidation in this market and then see gold break over its resistance at the RSI 50 level. When that happens, expect to see a potential multiyear bull market to take place in gold.
As the political cycle unfolds into 2016, the entire healthcare cohort has posted shape declines, this was particularly true for McKesson (MCK). This shape decline coincided with heated political rhetoric aimed at the collective cohort of healthcare and more specifically biotech related companies. The cynical sentiment by political frontrunners was largely rooted in the pricing of drugs and cost effective medical access. As candidate threats via legislative action geared towards reining in the costs of drugs unfolded, these actions negatively reverberated through healthcare and biotech stocks alike. The political posturing surrounding potential plans to reign in drug costs are now largely priced into many stocks within the healthcare umbrella. I contend that after the recent sell-off, many healthcare stocks look attractive at these levels, specifically McKesson. Once the political cycle is complete in 2016, these stocks will likely benefit from the mere absence of political headwinds. McKesson has now hit a 52-week low and boasts a P/E of 16 and a PEG of 1.46. McKesson appears very attractive considering its EPS growth, dividend payout, acquisitive mindset and share buyback program. Continue reading "McKesson Has Hit A 52-Week Low - Buying Opportunity"
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