Posts Tagged ‘stock’

IS THE STOCK MARKET 26% OVERVALUED?

IS THE STOCK MARKET 26% OVERVALUED?

Courtesy of The Pragmatic Capitalist

The latest data from Robert Shiller’s 10 year PE ratio shows the market currently at a 20.64 multiple.  In his morning note, David Rosenberg noted that this is 26% higher than the long-run average:

“If there was an impediment, in addition to a murky economic outlook, it is valuation. There were revisions to the Shiller valuation data and the latest reading on the normalized real P/E multiple is at 20.64x, up from the 20.0x in February and 20.5x in January. The long-run trend is at 16.36x, suggesting that the S&P is currently overvalued by 26%.”

pe1 IS THE STOCK MARKET 26% OVERVALUED?

This chart provides little of utility in and of itself, but combined with a longer-term look at stock prices it raises some interesting thoughts.  As a student of and believer of mean reversion, I just can’t help but wonder if the recent recovery in stocks is nothing more than a brief respite in the long-term “chop” that has become a defining characteristic of equity prices over the last 10 years.

20100226 IS THE STOCK MARKET 26% OVERVALUED?

Source: Chartoftheday, Shiller Econ & Gluskin Sheff 

 


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The Market Is Talking

The Market Is Talking

By David Grandey

Right now the market is talking to us. We hope you are listening because we are.

One look at the indexes show a lot of talking going on right now in the form of our indicators flashing "In the Zone" or at the least be aware. This is how the market talks to us. 

First up the 20 day one-minute time frequency chart that covers the whole run off the recent lows.

These nano short term one minute charts all show the same thing:

A. Retest of the highs commonly referred to as resistance (red lines)

B. At trend channel resistance (pink lines)

Moving on to a larger time frame and frequency we see numerous things that make us super cautious on the longside. 

In each of the above charts we see the same thing brewing in all of them. 

A. RSI in overbought territory (red circles at the top of each chart)

B. Full Stochastics in over bought territory (red circles at the bottom of each chart)

C. All at trend channel resistance levels (Pink channels in OTC Comp. and Dow)

D. All are at key Fibonacci retracement levels

E. Lackluster volume on the way up in each index (not shown, but it’s there or not there shall we say)

F. In an ABC down with A is done, we are in B up (right into options expiration mind you) with a potential C down yet to rear its head. 

G. Potential retests of recent highs that if they pull away from here it’s a double top at the least resistance right here.

In Summary Big Picture:

It’s options expiration. This means we could sit here for the rest of the week and chew around more. But we see too many indicators telling us that we are in a high risk zone on the longside. Those that have been here for awhile know what this all means all too well. If that’s the case then what is that saying about our Inverse ETF’s out there? Just the opposite of course.

To learn more, sign up for our free newsletter and receive our free report — "How To Outperform 90% Of Wall Street With Just $500 A Week." 


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Why Amedisys (AMED) will hit $85

Here’s PSW member Tuscadog’s detailed analysis of the company Amedisys (AMED). Tuscadog feels this is one of the few solid opportunities in the stock market, and he suggests a massive short squeeze may be coming due to AMED’s 53% short interest. – Ilene

Amedisys, Inc. provides home health and hospice services to the chronic, co-morbid, and aging American population. Its home health services include skilled nursing and home health aide services; physical, occupational, and speech therapy; and medically oriented social work to eligible individuals who require ongoing care. The company also offers clinically focused programs for chronic conditions and various diseases,… (Yahoo financial, more here.>>)

Why Amedisys (AMED) will hit $85

Courtesy of Tuscadog, member at PSW

Doctor standing outdoors with elderly patient

Feb 23rd may be ‘Judgment Day’ for the AMED short interest.

This is a long posting based on a lot of research and high level interviews I’ve conducted. I’m a private (long term) investor in Amed and I don’t appreciate the way Amed has been ‘jerked around’ by the hedge funds with false rumors and shorting, hence my willingness to share my analysis with small investors. These are my opinions based on my own extensive research, so invest at your own risk. For background on Amed pay particular attention to the 7 articles by Daryl Davis in the ‘Financial Blogs’ section of the Yahoo Finance page for Amed.

UPDATED GUIDANCE WILL BE A NIGHTMARE FOR SHORTS:

Amed will likely release 2009 EPS on Feb 23rd of around $4.90 to $5 and, more importantly, it will give guidance for 2010 based on the status quo on Medicare billing rates for 2010 (i.e. as already issued for 2010 by The Centers for Medicare & Medicaid Services, CMS). Based on the company’s growth rates and CMS’s announced approved rate increase for 2010 (which translates into a 1.8% net increase for 2010 after two flat pricing years) Amed will likely provide 2010 guidance in the $5.60 to $5.70 range.  I believe actual results outcome will likely be higher, in the $5.70 to $5.90 range.

The 15 analysts who cover AMED are likely waiting for Amed’s guidance update and to see if there are any Health-Bill developments. The Suntrust  upgrade Monday to a $70 target is using a pessimistic assumption of a revision to a retroactive 2.5% Medicare billing rate reduction for 2010. Currently, analysts eps forecasts for 2010 include varying degrees of…
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How To Destroy Value

How To Destroy Value

motorolaCourtesy of Eric J. Fox at The Market Prognosticator

It was reported today that Motorola (MOT) is shopping around its division that makes set top boxes and other equipment for cable and phone companies. The rumored asking price is around $4.5 billion.

That sounds great, but unfortunately for Motorola and its shareholders, the company paid $11 billion for it 10 years ago. Read how management gushed over it back then:

"This partnership will enable us to expand our portfolio for network access, delivering next-generation solutions along with ‘home hubs’ that will handle high-speed Internet access and video entertainment, as well as carrier-quality voice services," Motorola chief executive Christopher B. Galvin said. "People want access tailored their way and the ability to get online quickly and simply."

Some might say that Motorola didn’t really pay $11 billion since it issued its own stock to complete the purchase. This is nonsense of course.

Deals like this might be a contributing reason to explain why Motorola stock has been a disappointment to many investors.

 


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Dave’s Daily

MARKET COMMENT

Dave Fry, October 15, 2009

DIP BUYING CONTINUES

Logic argues for a rest but Mr. Market’s not giving much ground. Some of this may have to do with options expiration tomorrow as those who can hunt down strike prices forcing exercise and hitting stops. Sure, it’s a mean game.

IBM posts good earnings while GOOG beats. So, you think over the last two hours of trading some folks got the memo? Just saying… In the meantime even horrible earnings from companies like Harley-Davidson (HOG) were bid higher following the dreamy “the worst is over” buy from WFC.

Volume is still unimpressive as many individual investors are watching but not playing despite all the cheerleading from the media…

 

 

There’s quite a mania going on in Emerging Markets and some commodity sectors. This is driving prices to extreme levels (parabolic) making mincemeat of rational judgment. It’s mostly driven by peer performance pressure, excess liquidity, and low yields; but, still only modest volume. Most investors are still feeling the bitter pain of losses and seem reluctant to take Wall Street’s bait.

More here.

 


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An Anthropologist on What’s Wrong with Wall Street

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An Anthropologist on What’s Wrong with Wall Street

Courtesy of TIME, by Barbara Kiviat. 

Anthropologist on What's Wrong with Wall St.In 1996, Karen Ho got a job on Wall Street. The student of anthropology, who would later go on to get her Ph.D., was fascinated by how even in the midst of an economic boom, corporate downsizings were rampant — and how each time a company announced a major layoff, its stock rallied. What she found from her perch at Bankers Trust — and later in interviews with people at firms such as Morgan Stanley, Merrill Lynch, Lehman Brothers, Goldman Sachs, JPMorgan, Salomon Brothers, Kidder Peabody and Lazard — was that it wasn’t just an ideological commitment to boosting shareholder value that drove decisions to merge, break up and restructure companies, but also the work culture of Wall Street itself. Ho, now a professor at the University of Minnesota, talked with Barbara Kiviat about her findings, presented in Liquidated: An Ethnography of Wall Street, and how she thinks the recent financial collapse has — or hasn’t — changed things.

What do you mean when you say the American worker has become liquid?
I mean that there’s constant job insecurity, constant downsizing, constant restructuring, a constant need to retrain to have an adaptable skill set and be flexible. In a sense, job security and stability have been liquidated.

And that comes from Wall Street?
What I found in my research was that in many ways investment bankers and how they approach work became a model for how work should be conducted. Wall Street shapes not just the stock market but also the very nature of employment and what kinds of workers are valued. These firms sit at the nexus — they are the financial advisers and sources of expertise to major U.S. corporations and institutional investors — and from this highly empowered middle-man role, what they say has a lot of influence. The model that came to be dominant in the 1980s was one of constant change. The idea is that there’s a lot of dead wood out there and people should be constantly moving, in lockstep with the market. If a company isn’t constantly restructuring and changing, then it’s stagnant and inefficient, a big lumbering brick.

And you think that attitude follows from the way Wall Street works?
What a lot…
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Investing Education Advice if You’re New to Options Trading

Investor EducationBy Travis W of PursuingWealth.com

Finding investing education advice for stock options trading can be a frustrating endeavor at times. New traders often share with me that it feels like the options trading community is a very tight-lipped community with a high price of admission. I’ve been through that process so I’d like to offer you some advice.

Learning to invest your own money is a journey, not a destination. It takes time, patience, and education. It’s a proactive journey for those who no longer desire to be a victim of the so called experts.

Over the years I’ve made enough mistakes and have had enough successes to know that the ability to master your money is not something that just happens. It takes a bit of work on your part.

Increasing your investment IQ is a key part, especially when you’re dealing with stock options. You have to find a qualified and trustworthy source for investing education. There’s quite a bit of hype out there so you have to filter out all the "noise".

You may have already searched online for information on stock options, or read a few books. Most people are drawn to options trading by the potential to create large sums of money in a short period of time.  Here is my forewarning; having a great deal of head knowledge about stock options doesn’t necessarily mean you’ll be a great trader. It’s going to take some real world practice.

Most of what I’ve learned about investing did not come from a classroom or a book; it came from real world experiences. I found people who were willing to give me unbiased investing education and I applied the knowledge through practice and a bit of trial and error.

Financial RoadmapInvesting Education is your Financial Road Map

Investing education has a purpose in our lives like a map has a purpose to a traveler. A map can take you from point "A" to point "B" when you’re traveling. Investing education can take you from school loans, credit card debt, and no budget to debt-free with money to burn. It’s your financial map so to speak.

You could try to figure out options trading on your own, but if you’re smart and value your time you’ll find a map that can get you to your destination quicker.  It’s extremely rare for me to meet someone who doesn’t want…
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GM: The Deep, Dark Shadows of Bankruptcy

Update on GM, courtesy of TIME 

GM: The Deep, Dark Shadows of Bankruptcy

A GM dealership in Los Angeles
A GM dealership in Los Angeles
Mark Ralston / AFP / Getty 

General Motors appears to be on a fast road to bankruptcy. Chief executive officer Fritz Henderson has already described a bankruptcy filing as "probable" as the U.S. Treasury’s June 1 deadline for reorganizing the company draws near. Also, the fact that GM announced it was moving up its date for paying suppliers from June 2 to May 28 further suggests bankruptcy is likely, says Brad Coulter of O’Keefe & Associates of Bloomfield Hills, Mich., which specializes in helping distressed manufacturing companies. "To me, it’s a pretty clear indicator that they plan to file right around the June 1 deadline." At the same time, half a dozen senior GM executives have dumped shares, even though the stock has been trading for less than $2.

Meanwhile, the work necessary for averting a GM bankruptcy remains undone. Though the automaker is reportedly making progress on negotiations with the United Auto Workers (UAW), open issues remain, and the GM even got into a public spat with the UAW over importing cars from China and Mexico. The union is now demanding more assurances as to what cars GM plans to build in the U.S. in the future. (See portraits of autoworkers.)

On a more positive note, the two sides have reportedly reached agreement on how to finance the Voluntary Employees’ Beneficiary Association (VEBA), which was set up to fund retiree health-care benefits for GM’s blue-collar workforce. GM is said to be agreeing to deposit half the $20 billion it owes the VEBA and to fund the other half with GM stock. The agreement appears to be very similar to the deal Chrysler LLC reached with the UAW. That deal puts the UAW in control of the new Chrysler, with 55% of the stock. The union has also reportedly agreed to cut labor costs, though neither the union nor GM would confirm the figures.

As part of the overall restructuring plan put forward by the company, 16 manufacturing facilities in the U.S. will be closed, including four assembly plants, according to Alan Reuther, director of the UAW’s Washington office.

In a related move, GM announced


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Phil's Favorites

Trump Tweeting As Much As Ever Amid Twitter Standoff

 

Trump Tweeting As Much As Ever Amid Twitter Standoff

By , Statista

President Trump has signed an executive order which aims to remove some of the legal protection given to social media companies, though it is expected to face significant legal hurdles. In a nutshell, it sets out to clarify the Communications Decency Act, handing regulators the power to file legal proceedings against social media companies for the way they police content on their platforms. Trump's decision to take action comes two days after Twitter attached a fact check to one of his tweets lambasting mail-in voting. He then threatened to close ...



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ValueWalk

Gold supply chain in recovery mode after pandemic shutdown

By Michelle Jones. Originally published at ValueWalk.

The gold supply chain was largely shut down as the COVID-19 pandemic spread around the world. However, things are starting to open back up, and production is beginning again. The World Gold Council studied the gold supply chain, how it was impacted by the pandemic, and how the disruption of the supply chain has affected investment demand for the yellow metal.

Q1 2020 hedge fund letters, conferences and more

Disruption to the gold supply chain

The World Gold Council said the gold supply chain is entirely global because the metal is mined on evert continent except Antarctica and refined in nume...



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Biotech/COVID-19

Antigen tests for COVID-19 are fast and easy - and could solve the coronavirus testing problem despite being somewhat inaccurate

 

Antigen tests for COVID-19 are fast and easy – and could solve the coronavirus testing problem despite being somewhat inaccurate

Antibodies are incredibly good at finding the coronavirus. Antigen tests put them to work. Sergii Iaremenko/Science Photo Library via Getty Images

Courtesy of Eugene Wu, University of Richmond

In late February, I fell ill with a fever and a cough. As a biochemist who teaches a class on viruses, I’d been tracking the outbreak of...



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Zero Hedge

Ted Cruz Accuses Twitter Of Violating Sanctions Against Iran, Demands DoJ Probe

Courtesy of ZeroHedge View original post here.

We've mentioned in nearly every single one of our posts about this week's dustup between the president and Twitter that the Ayato...



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Kimble Charting Solutions

Tech Indicator Suggesting A Historic Top Could Be Forming?

Courtesy of Chris Kimble

Tech stocks have been the clear leader of the stock market recovery rally, this year and since the lows back in 2007!

But within the ranks of leadership, and an important ratio may be sending a caution message to investors.

In today’s chart, we look at the ratio of large-cap tech stocks (the Nasdaq 100 Index) to the broader tech market (the Nasdaq Composite) on a “monthly” basis.

The large-cap concentrated Nasdaq 100 (only 100 stocks) has been the clear leader for several years versus the ...



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The Technical Traders

M2 Velocity Collapses - Could A Bottom In Capital Velocity Be Setting Up?

Courtesy of Technical Traders

M2 Velocity is the measurement of capital circulating within the economy.  The faster capital circulates within the economy, the more that capital is being deployed within the economy to create output and opportunities for economic growth.  When M2 Velocity contracts, capital is being deployed in investments or assets that prevent that capital from further circulation within the economy – thus preventing further output and opportunity growth features.

The decline in M2 Velocity over the past 10+ years has been dramatic and consistent with the dramatic new zero US Federal Reserve interest rates initiated since just after the 2008 credit crisis market colla...



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Lee's Free Thinking

US Southern States COVID19 Cases - Let's Give Credit Where Due

 

US Southern States COVID19 Cases – Let’s Give Credit Where Due

Courtesy of  

The number of new COVID 19 cases has been falling in the Northeast, but the South is not having the same experience. The number of new cases per day in each Southern state has been rangebound for the past month.

And that’s assuming that the numbers haven’t been manipulated. We know that in Georgia’s case at least, they have been. And there are suspicions about Florida as well, as the State now engages in a smear campaign against the fired employee who built its much praised COVID19 database and dashboar...



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Chart School

Is this your local response to COVID 19

Courtesy of Read the Ticker

This is off topic, but a bit of fun!


This is the standard reaction from the control freaks.








This is the song for post lock down!







What should be made mandatory? Vaccines, hell NO! This should be mandatory: Every one taking their tops off in the sun, they do in Africa!

Guess which family gets more Vitamin D and eats less sugary carbs, TV Show



...



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Digital Currencies

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

 

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

App-etising? LDprod

Courtesy of Michael Rogerson, University of Bath and Glenn Parry, University of Surrey

Food supply chains were vulnerable long before the coronavirus pandemic. Recent scandals have ranged from modern slavery ...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

http://www.insidercow.com/ more from Insider

Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

...

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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. Contact Ilene to learn about our affiliate and content sharing programs.