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In the News: An ETF Rush to Bet on Insiders

Courtesy of Sabrient Systems and Gradient Analytics

(ETFTrends.com by Todd Shriber): “Betting on insider buying is again proving to be an efficacious strategy as the Direxion All Cap Insider Sentiment Shares (NYSEArca: KNOW) has been noticeably less bad than the S&P 500 to start 2015. Add to that, investors are warming to the merits of KNOW’s insider sentiment strategy.” [Editor's note: KNOW tracks the Sabrient Multi-cap Insider/Analyst Quant-Weighted Index (SBRQAM)]. Read article





An ETF Rush to Bet on Insiders

Courtesy of Sabrient Systems and Gradient Analytics

From  ETFTrends.com: “Betting on insider buying is again proving to be an efficacious strategy as the Direxion All Cap Insider Sentiment Shares (NYSEArca: KNOW) has been noticeably less bad than the S&P 500 to start 2015. Add to that, investors are warming to the merits of KNOW’s insider sentiment strategy.” [Editor's note: KNOW tracks the Sabrient Multi-cap Insider/Analyst Quant-Weighted Index (SBRQAM)]. Read article





Sector Detector: With the Fed fading into shadows, investors look overseas for new catalysts

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Courtesy of Sabrient Systems and Gradient Analytics

By Scott Martindale

Last week, the S&P 500 put an end to its streak of weekly losses, despite giving back some gains on Friday. Thursday provided the big catalyst, with the ECB’s announcement of its bold new monetary stimulus plan. Investors were cheered and soothed for the moment. And U.S. fundamentals still look strong. But with Greece trying to turn back time, with volatility elevated (and likely to continue as such), and with the technical situation still dicey, the near term outlook is still worrisome.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-ranked stocks from the top-ranked sectors.

Market overview:

Despite the positive turn in the markets last week, this week has already brought a whole new set of issues to weigh on investors’ minds, starting with Sunday’s snap vote in Greece, which apparently has enough of the pain of austerity. Voters want to return to the past by rolling back austerity measures and thumbing their collective nose at the Eurozone and the broader international community of lenders. In reaction, the euro fell even further than it did in the face of the ECB’s stimulus announcement last week.

The ECB seeks to inflate asset prices and encourage hiring through an open-ended sovereign quantitative easing program that will inject 60 billion euros into European debt securities each month from March 2015 until at least September 2016. Heck, if it helped the U.S. recover, then why not try it everywhere? ECB President Mario Draghi, insisted that stimulus must be accompanied by reforms, because monetary policy alone will not be enough. But Europe still pines for the good old days that, unfortunately, are nothing more than nostalgia.

There is a very real danger that their QE won’t work like it did here, since the U.S. is considered the heart of the global…
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Sector Detector: New Year kicks off with new fears to keep investors on edge

Courtesy of Sabrient Systems and Gradient Analytics

As widely expected, the New Year has begun with plenty of volatility on high trading volume, as investors fear more than just a mild correction to start out the year. Despite the strong fundamentals here in the U.S., there are plenty of dangers around the rest of the world, and many fear that our cozy comfort at home simply cannot remain insulated for much longer.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-ranked stocks from the top-ranked sectors.

Market overview:

I would like to start by saying that I have been traveling a lot lately, speaking with and presenting to financial advisors to promote our annual Baker’s Dozen portfolio, which is packaged as a unit investment trust by our strategic partner First Trust Portfolios. Many of these advisors are readers of this weekly article, and I want to take this opportunity to say that I have been humbled and gratified by your tremendous interest, enthusiastic reception, and warm hospitality. We are doing our best to sustain your loyalty and respect, and of course, to continue our record of outstanding performance.

Anyway, just when we all had grown accustomed to the old Wall of Worry and the scary bogeymen under the bed, there are new bogeymen peeking out from the bedroom closet. The new sources of worry are really bigger and scarier versions of existing ones, including the continued slide in oil prices (far further than hardly anyone believed possible), worsening recession and deflation in the Eurozone (leading to drastic actions), and the global metastasis of radical Islam (despite our successes in foiling their plots and destroying their infrastructure). News headlines seem to getting worse for both issues.

First, radical Islam has been with us for a long time, and of course it jumped to the forefront with 9/11. Today, splintered organizational infrastructures and terrorist training facilities have suffered highly-publicized defeats by the skilled efforts of the civilized world, but each of these successes consumes an incredible amount of time and resources, while the hateful ideology continues to spread…
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Sector Detector: Bulls close out another solid year with expectation of further gains but higher volatility in 2015

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Courtesy of Sabrient Systems and Gradient Analytics

By Scott Martindale

Scott MartindaleAnother solid year for U.S. equities came to a close. But it’s not like everyone is jumping up and down with enthusiasm, which is a good thing. With plenty of bogeymen in the closet and under the bed, there is little in the way of irrational exuberance. Although some commentators noted that 2014 finished up much the same as 2013, there was really quite a bit of difference between the past two years, primarily in the way of lower correlations in 2014 as opposed to the all-boats-lifted environment of 2013. Looking ahead, 2015 looks promising for further gains, but not without bouts of volatility. In fact, it might look a lot like 2014.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-ranked stocks from the top-ranked sectors.

Market overview:

As we see the close to yet another successful year for the U.S. stock market, we can look back on 2014 and recall the many bogeymen that caused investor consternation. There was the end of the Fed’s tapering of QE3 (although maturing securities are still being reinvested rather than retired). There was the huge collapse in oil prices (and still falling today), causing major disruptions in global markets. Then of course we had the slowdowns in China, Japan, and Europe — and Greece is again in crisis mode. There was major turmoil in Russia and the Ukraine. We witnessed the sudden emergence of ISIS as a terrorist organization with its own army (and social media savvy). There was the fear of Ebola spreading into a global epidemic. And here at home, we had the uncertainty surrounding implementation of Obamacare, as well as the mid-term elections putting the GOP in control of both houses of congress. Did I miss anything?

The Dow Jones Industrials blue chips, the S&P 500 large cap index,…
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Sector Detector: Fed’s patience puts bulls in a hurry

Courtesy of Sabrient Systems and Gradient Analytics

U.S. stocks found support once again last week and rallied on strong volume. Of course, the main catalyst was the FOMC policy statement on Wednesday that maintained its dovish language with a pledge of considerable time before raising the fed funds rate and adding that it would be patient as it begins the process of normalizing monetary policy. The result was yet another classic V-bottom. Ho, ho, ho. Say hello to Santa Claus.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-ranked stocks from the top-ranked sectors.

Market overview:

For the week, the S&P 500 had a total return of +3.4%, led by a huge +9.7% bounce in beleaguered Energy sector. Basic Materials also looked strong with a +5.0% rally. For the year, the S&P 500 is up nearly +12% through Friday. And then on Monday of this week, the S&P 500 logged a new closing high, although the intraday high from December 5 still stands. Last Thursday’s big move resulted in a 421-point gain for the Dow Jones Industrials, which was its best one-day performance in three years, and the 709 points totaled on Wednesday and Thursday was its best two-day performance since 2008.

With Santa lurking on the horizon, bears have run for cover from the charging bulls. Moreover, Fundstrat reported that 71% of active fund managers are trailing their respective benchmarks, which would be the worst such percentage since 1998. So, they needed to do some catch up in accumulating U.S. equities. Notably, 1998 closed with a similar end-of-year rally. Also, this is the time of year in which many companies announce increases to their dividend payments. And don’t forget, this year’s IPO market has been the busiest since the crazy days of 2000, with 273 new IPOs (compared with 406 in 2000) and $85 billion raised (vs. $97 billion in 2000).

Crude oil has fallen -48% below the June highs, so it’s not surprising that the Energy sector led last week’s big rally. At current levels, there is more upside potential than further downside and…
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Sector Detector: Energy sector rains on bulls’ parade, but skies may clear soon

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Courtesy of Scott Martindale of Sabrient Systems and Gradient Analytics

Stocks have needed a reason to take a breather and pull back in this long-standing ultra-bullish climate, with strong economic data and seasonality providing impressive tailwinds — and plummeting oil prices certainly have given it to them. But this minor pullback was fully expected and indeed desirable for market health. The future remains bright for the U.S. economy and corporate profits despite the collapse in oil, and now the overbought technical condition has been relieved. While most sectors are gathering fundamental support and our sector rotation model remains bullish, the Energy sector looks fundamentally weak and continues to rank at the bottom of our forward-looking sector rankings.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-ranked stocks from the top-ranked sectors.

Market overview:

The fear of broader fallout from issues like Ebola, ISIS, Russian aggression, European malaise, and slowdown in China had subsided, so the market has been waiting for next big worry to spike the fear gauge and cause a selloff to test support levels. The Dow Industrials suffered its biggest weekly percentage loss in three years. After all, it is hard to break out to new highs when bullish conviction has not been recently tested and reconfirmed. Well, it found its next big worry in the fall of oil prices and all that it might be foretelling, such as defaults in the high-yield bond segment of the Financial sector and recession in global economies.

Crude oil fell another 3% on Friday to 5-year lows and 46% below the June highs after the International Energy Agency cut its outlook for 2015; and it expects prices to fall further.  Tremendous increases in domestic production through enhanced recovery techniques and the prospect of energy independence in the U.S. (which once was considered an impossibility) has…
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Sector Detector: Bulls revel in new highs and blue skies, but oil introduces a dark cloud

Courtesy of Sabrient Systems and Gradient Analytics

As everyone knows, stocks do not go up in a straight line, not even during the holidays. So although the future looks bright for U.S. equities as the major indexes continue to hit or challenge new highs, the market has been gasping for a breather to gather bullish conviction. My fear has been that we might not see it until January, which likely would have resulted in a more severe correction at that time. But falling oil prices and a weak Energy sector seems to have introduced a reason to sell this week. Correspondingly, the Energy sector is now ranked at the bottom of our fundamentals-based, forward-looking sector rankings.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-ranked stocks from the top-ranked sectors.

Market overview:

In the fall of 1999, my older daughter was in kindergarten, and I met another father at her school who had moved his family to Santa Barbara from Puerto Rico. He had enjoyed success with real estate and construction there and owned free-and-clear a large house in downtown San Juan. As his kids were ready to start attending school, he decided to monetize his big house by leasing it out. But rather than using the lease payments as income to live on, he took out a large mortgage on his house and gave it to his financial advisor back home to invest for him. After all, stocks were raging and his broker was enamored with the performance of the NASDAQ Composite Index. All his money was invested in NASDAQ stocks, particularly the Technology sector.

The following spring of 2000, as the index approached its incredible closing high of 5,048 (or 5,132 intraday), he was getting more and more anxious about the meteoric rise. And as the market began its fateful decline, his broker kept telling him not to worry because new technologies were the engine for all future of global economic growth. But fears of Y2K doom-and-gloom proved unfounded, and instead budgets were slashed for further capital upgrades. Software company valuations based solely on projected…
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Sector Detector: Holiday fever takes hold of stock investors, but a pullback is needed

Courtesy of Sabrient Systems and Gradient Analytics

With warmer weather arriving to melt the early snowfall across much of the country, investors seem to be catching a severe case of holiday fever and positioning themselves for the seasonally bullish time of the year. And to give an added boost, both Europe and Asia provided more fuel for the bull’s fire last week with stimulus announcements, particularly China’s interest rate cut. Yes, all systems are go for U.S. equities as there really is no other game in town. But nothing goes up in a straight line, not even during the holidays, so a near-term market pullback would be a healthy way to prevent a steeper correction in January.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-ranked stocks from the top-ranked sectors.

Market overview:

Last Friday brought a very nice opening pop to U.S. markets when China decided to cut its lending rate, making U.S. assets more attractive to global investors. Moreover, the ECB indicated its willingness to implement greater stimulus measures, including government bond purchases. Japan has slipped into recession with GDP decreasing by -1.6% in Q3 versus expectations of +2.2%. And Germany only expanded by a paltry +0.1%. The euro fell to near 2-year lows versus the U.S. dollar, while the yen fell to new 7-year lows against the dollar.

The combination of economic weakness in these major global economies and increasing U.S. oil production continues to push down the price of oil, and the resulting wealth effect of rising equity prices and low gasoline prices is expected to create a boon for retailers this holiday season. Adding to the seasonal strength for stocks is that corporations tend to do much of their buybacks this time of the year. Also, elevated short interest can provide yet another short-term catalyst.

M&A activity is another catalyst, and last week Allergan (AGN) and Actavis plc (ACT) both rose when ACT agreed to pay about $66 billion for AGN. Also, Halliburton (HAL) announced its acquisition of Baker Hughes (BHI). All four of these companies have been Sabrient favorites and…
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Sector Detector: Investors make up new rules for their new market paradigm

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Courtesy of Sabrient Systems and Gradient Analytics

By Scott Martindale

Investors in U.S. equities seem to have embraced a new market paradigm in which upside spikes come more swiftly than the downside selloffs. Remember when it used to be the other way around? When fear was stronger than greed? The market is consolidating its gains off the early-October V-bottom reversal, and no one seems to be in any hurry to unload shares this time around, with the holidays rapidly approaching and all. After all, there are bright blue skies directly overhead giving hope and respite from the early freeze blanketing the country.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-ranked stocks from the top-ranked sectors.

Market overview:

Currency wars continue as central banks seek to stimulate their economies through devaluation in a race to the bottom, while corruption and ineptitude in places like Russia and Brazil destroy their currencies. It appears that the EU is finally starting to see some benefits, as its latest reported GDP growth showed up slightly to the positive side. Here in the U.S., GDP growth is expected to be at a 3.3% rate over the second half of 2014 and 4.4% for 2015.

As commodity prices continue to sink with a strengthening dollar and no inflation in sight, the former largest public company in the world Exxon Mobil (XOM) has seen its market cap tread water at around $403 billion), while Apple (AAPL) continues to pull further ahead ($670 billion) and Microsoft (MSFT) moves into the second spot ($409 billion). As discussed below, our fundamentals-based SectorCast rankings score Energy and Basic Materials at the bottom, primarily because of Wall Street’s continued downward revisions in forward earnings estimates. Nevertheless, both sectors have seen such price declines that their forward valuations are still quite attractive compared with the overall market.

So, how is the overall market valuation right now? On the one hand, the…
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Zero Hedge

The Future of Medicine? Forget Private Doctor Appointments, Group Medical Visits are Coming

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

According to the American Academy of Family Physicians, around 10 percent of family doctors already offer shared medical appointments, sessions that bring together a dozen or more patients with similar medical conditions to meet with a doctor for 90 minutes. With pressure from the government and insurers to bring down the cost of care while treating the increasing number of people with health insurance, patients can expect group ...



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Chart School

Moving Averages: Month-End Preview

Courtesy of Doug Short.

Here is an advance preview of the monthly moving averages I track after the close of the last business day of the month. At this point, before the open on the last day of the month, three S&P 500 strategies are now signaling "invested" -- unchanged from last month. Two of the five of the Ivy Portfolio ETFs, Vanguard FTSE All-World ex-US ETF (VEU) and PowerShares DB Commodity Index Tracking (DBC), are signal "cash" -- also unchanged from last month.

If a position is less than 2% from a signal, it is highlighted in yellow.


Note: My inclusion of the S&P 500 index updates is intended to illustrate a popular moving moving-average timing strategy. The index signals also give...



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Phil's Favorites

Greece Will Not Accept Bailout Extension or Deal With "Rottenly Constructed" Troika; Mish's Game Theory Math

Courtesy of Mish.

Greece Will No Longer Deal with ‘Troika’

It now strongly appears as if Greece, Germany, and the nannycrats in Brussels are all on one hell of a collision course. Both sides have dug in, and the war of words has escalated in all corners.

For example, please consider Greece Will No Longer Deal with ‘Troika’, Yanis Varoufakis Says
Greece will no longer co-operate with the “troika” of international lenders that has overseen its four-year bailout programme, the country’s finance minister said.

Yanis Varoufakis also said Greece would not accept an extension of its EU bailout, which expires at the end of February, and without which Greek banks could be shut off from European Centr...



more from Ilene

All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Sabrient

In the News: An ETF Rush to Bet on Insiders

Courtesy of Sabrient Systems and Gradient Analytics

(ETFTrends.com by Todd Shriber): "Betting on insider buying is again proving to be an efficacious strategy as the Direxion All Cap Insider Sentiment Shares (NYSEArca: KNOW) has been noticeably less bad than the S&P 500 to start 2015. Add to that, investors are warming to the merits of KNOW's insider sentiment strategy." [Editor's note: KNOW tracks the Sabrient Multi-cap Insider/Analyst Quant-Weighted Index (SBRQAM)]. Read article

...

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Market Shadows

What Would You Do?

What Would You Do?

Courtesy of Paul Price

Suppose you had the technical ability and raw materials to print up counterfeit dollars, euros or yen that were identical to the real things. Assume you could spend them as fast as you could create them with no fear of any repercussions.

Would you prudently print up only as much fresh currency as you needed for your current lifestyle? Would you create just a bit more than that to help relatives or those in need?

It is most likely you’d have your printing press running 24 hours a day, seven days a week. Becoming the richest person in the world would confer great power upon you.

You could rationalize this action because you plan to use the money for good purposes. Imagine the warm feeling you’d get by giving every person in America one million do...



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OpTrader

Swing trading portfolio - week of January 26th, 2015

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Digital Currencies

Jitters After Bitcoin Exchange Suspends Services

So as I was saying yesterday (Bitcoin: The Biggest Clown Show In History?), Bitcoin has several obstacles on the path to potential success as an alternative currency. But I forgot to mention hacking and theft at Bitcoin exchanges and other technical problems. This is related to the lack of government backing and the fact that the value of Bitcoins is based entirely on confidence.  

Jitters After Bitcoin Exchange Suspends Services 

By 



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Pharmboy

2015 - Biotech Fever

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

PSW Members - well, what a year for biotechs!   The Biotech Index (IBB) is up a whopping 40%, beating the S&P hands down!  The healthcare sector has had a number of high flying IPOs, and beat the Tech Sector in total nubmer of IPOs in the past 12 months.  What could go wrong?

Phil has given his Secret Santa Inflation Hedges for 2015, and since I have been trying to keep my head above water between work, PSW, and baseball with my boys...it is time that something is put together for PSW on biotechs in 2015.

Cancer and fibrosis remain two of the hottest areas for VC backed biotechs to invest their monies.  A number of companies have gone IPO which have drugs/technologies that fight cancer, includin...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's this week's Stock World Weekly.

Click here and sign in with your user name and password. 

 

...

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Option Review

SPX Call Spread Eyes Fresh Record Highs By Year End

Stocks got off to a rocky start on the first trading day in December, with the S&P 500 Index slipping just below 2050 on Monday. Based on one large bullish SPX options trade executed on Wednesday, however, such price action is not likely to break the trend of strong gains observed in the benchmark index since mid-October. It looks like one options market participant purchased 25,000 of the 31Dec’14 2105/2115 call spreads at a net premium of $2.70 each. The trade cost $6.75mm to put on, and represents the maximum potential loss on the position should the 2105 calls expire worthless at the end of December. The call spread could reap profits of as much as $7.30 per spread, or $18.25mm, in the event that the SPX ends the year above 2115. The index would need to rally 2.0% over the current level...



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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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