Some companies hit all-time records last month, while others missed forecasts.
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The charts flashed a clear warning sign before the metal's recent decline. While the mid- to long-term trend remains positive, it's time to hedge existing long positions.
By Tom Aspray, MoneyShow.com
Longtime readers know that Starc bands are among my favorite technical tools. Still, last Thursday's column on gold, in which I pointed out that risk on the long side was uncomfortably high, was treated with a fair amount of skepticism, as some were looking for the $2000 or $2500 level to be reached before a correction began.
In that article, I pointed out that as gold was accelerating to the upside, the bearish analysts had disappeared. More importantly, the SPDR Gold Trust (GLD) was trading above both the monthly and weekly Starc+ bands. Historically, this was a very rare occurrence.
As I noted at the time, “When a market reaches a historically high-risk buying area using both the weekly and the monthly analysis, the odds of some consolidation or a more significant pullback are very high. From a money management point of view, this can allow even long-term investors to protect profits by hedging their positions.”
Given the parabolic nature of the recent rally, the correction could last for some time, but it is important to remember that the intermediate and long-term trends are still positive for gold. For those who are not accustomed to gold’s volatility, you may want to take a look at past gold corrections, as detailed in “Are You Ready for Gold’s Volatility?”
Gold futures are down another $35 in early trading on Thursday, so GLD could lose another 2.2% on the opening. The key Fibonacci retracement and chart support levels can help identify the key levels investors and traders should be watching.
Regardless of the volatility, there are still some great long-term income plays you can get into now.
It’s important for income investors to have a small and select collection of companies like the ones below, that are in differing industries but have substantial real assets behind them that generate the cash to pay bigger dividends.
The telecom has a very sticky customer base for its broadband high-speed Internet data services, wireless communications networks, cable, and other data-fed television and on-demand entertainment, along with its traditional land lines.
Revenues keep coming. And while peers around the nation have faced plenty of pain from lost customers, Otelco focuses on making the most of its customer base by focusing on their wants and needs.
Moreover, it also knows that its capital is a crucial part of the business—so management has continued to keep a firm eye on attracting and keeping individual shareholders. To do so, it continues to pay its rock-steady dividend—currently over 10%—while also watching the revenues and the balance-sheet risk so that it can keep paying up.
One look at the company's numbers tells us the Steve Jobs news was largely baked into the stock price.
Right now people are using $6.80 as their earnings-per-share (EPS) estimate for Apple's coming quarter, which is the fourth quarter of the company's fiscal year. I think that's low. Way low. To me, $9 is more like it. People are chattering about $27 for fiscal 2012. Me? I am thinking $40 if everything goes right.
If you look at the way cash is accumulating, it is reasonable to think that Apple could have $110 per share in the bank.
Now, armed with those numbers, let's say Apple is at $350. Big hit, right?
There are enough uncertainties in this mixed-up market without questioning the impact of Apple's retiring CEO. With video analysis of the transition at Apple.
By Charles Lewis Sizemore, InvestorPlace.com
Steve Jobs announced his retirement on Wednesday, as his declining health has made it impossible for him to continue as Apple's CEO. We certainly wish the best for Jobs and his family and hope he makes a full recovery. Still, Jobs' departure raises a very uncomfortable question for Apple (AAPL).
How does a company that owes so much of its success to the vision of one man cope with his absence?
Apple's stock was down 5% in midday trading Thursday, indicating traders are wondering the same thing.
The chief executive of Apple steps down, leaving investors and the tech world reeling.
The news was not unexpected, given Jobs' longstanding health issues, but it's still a shock.
The Apple chief sent an email to the world Wednesday afternoon saying he "can no longer meet his duties and expectations" as head of the world's largest company. He plans to serve as chairman, as long as the board gives its all but guaranteed approval.
Jobs didn't mention his health problems, but many people assume them to be the reason behind the resignation.
Toy store's pre-IPO expansion strategy is puzzling
By Tom Taulli, InvestorPlace.com
Since its start in 1948, Toys “R” Us has always found ways to evolve and grow. But its luck might be running out as the retail landscape is undergoing cosmic shifts. In other words, can an operator like Toys “R” Us survive the onslaught from rivals like Wal-Mart (NYSE:WMT) and Amazon (NASDAQ:AMZN)? And will the stagnant U.S. economy make things even worse?
OK, it’s unlikely that Toys “R” Us will become obsolete. This seems a bit extreme. But it’s likely the problems will grow and grow.
Faced with patent-infringement charges from Apple, Samsung claims that the iPad's design dates back to '2001: A Space Odyssey.'
The company says it couldn't possibly have stolen Apple's (AAPL) designs for the iPad because Stanley Kubrick was there first. His 1968 movie "2001: A Space Odyssey" showed the design long before Apple was founded, Samsung says.
In a federal court filing this week, Samsung even references a YouTube clip from the movie that shows two astronauts eating and using tablet computers. You can watch the clip here.
Nabbing the iPhone 5 would be a huge boost for Sprint, but the struggling carrier still needs help.
The Wall Street Journal reports that Sprint will sell the iPhone 5 in mid-October, at the same time Verizon (VZ) and AT&T (T) will also sell the phone. Just getting parity with those rivals is a big boost for Sprint, whose 52 million subscribers far lag the 106 million at Verizon and the 99 million at AT&T.
While it appears to be dropping, it's still more than $30 higher than it was a year ago.
By Dan Dicker, TheStreet
There has been lots of talk about the "big drop" in oil prices over the past several weeks, and talking heads have been quick to see a silver lining in the reduced input costs for manufacturers and for prices that you and I pay at the pump.
Well, I hate to rain on the parade, but the real-world physical price of oil hasn't dropped much at all and is still more than $30 a barrel higher than it was at this time last year.
That's because the "price" of oil that is universally referenced on cable television and in newspapers is the U.S. and NYMEX-traded West Texas Intermediate (WTI) futures contract, a contract with enormous physical problems which has morphed into little more than a financial tool for hedge funds and algorithmic traders, and has become irrelevant to the real world prices that are being paid.
The former offers better growth potential, an analyst says. With video.
By Shanthi Bharatwaj, TheStreet
Last week, UBS analyst William Tanona said Citigroup stock should be priced at premium over Bank of America as it faces "less dramatic uncertainties" from large, mortgage-related liabilities and stronger earnings power.
On Wednesday, Glenn Schorr at Nomura released a report, making similar arguments. While the analyst thinks the selloff in both the stocks is overdone, he still prefers Citigroup and JPMorgan Chase (JPM) over Bank of America.
Here are the 10 things that need to happen before a long-term stock market rally will gain momentum.
These are all super questions that need to be answered. But the only way I know to answer them is to go over a "to be done" list of questions, a list of questions designed to show if things have really changed or if stock prices changed but nothing more.
Yesterday was more of the latter. What makes me say that?
If the broad market finds a near-term bottom, semiconductors should also rebound.
By Tom Aspray, MoneyShow.com
The strong action in the US stock market on Tuesday came as a surprise, as there was little bullish news that the financial press could use to explain the price action. The prevailing opinion seems to be that the further signs of a weakening economy will spur Fed Chairman Ben Bernanke to say something dramatic on Friday.
Of course, from a technical perspective, any news is a distraction because if it is significant, the market usually reflects it well in advance. There has been some short-term technical improvement with Tuesday’s close, and it suggests that we should see at least a test of last week’s highs, if not a rally to stronger resistance over the near term. To support this view, the major averages will need to surpass Tuesday’s highs either Wednesday or Thursday.
The semiconductor sector has been especially weak since the May highs, and the combined analysis of a leveraged long and short semiconductor ETF suggests a potential contra-trend trading opportunity.
Premium lagers are taking the UK by storm as fans flock to their flavor and originality.
That's according to the Guardian, which found research data showing that sales of premium lagers imported from the U.S. have soared by 150% over the past year.
British pub-goers are gaga over Blue Moon and Sierra Nevada Pale Ale. UK grocer Tesco (TSCDY), sensing a trend in the making, is launching those two beers along with Goose Island and Brooklyn at 750 stores, the Guardian reports.
Agriculture commodities are on the move, breaking out of consolidation for the first time since last summer.
It's been a tough summer for stocks and other risky assets -- but the same can't be said for agricultural commodities. Hot, dry drought conditions have ruined crops all across the American growing regions. At the same time, demand remains robust thanks to the big appetites of newly empowered eaters in the developing world.
The USDA cut its forecast of how much of the standing corn crop is in good or excellent shape to just 57%, down from 60% last week and 70% a year ago. Already, with carryover stocks low from last year, a poor harvest will do further damage to meager inventories. At the same time, China has recently become a net importer of corn and last year made its largest purchase of U.S. corn in ten years. Of course, demand from ethanol production continues as well.
The combination of tighter supply and stronger demand is sending prices higher once more. As a result, as a group agricultural goods are pushing up and out of a long seven-month downtrend dating back to February. A powerful new uptrend is being established. Here's how to take advantage.
The company now counts on emerging markets for most of its sales. This isn't the Tupperware of old.
The stock is on a roll, up nearly 4% Tuesday to $62.20. Shares have soared 50% in the past year. Investors are confident that Tupperware has evolved from the jello-mold days of old into a company that now has a worldwide presence.
Tupperware has a direct sales force of 2.6 million around the world, the company tells The Associated Press. The old-fashioned Tupperware party is still around -- but now one takes place every 1.7 seconds, compared with every 2.3 seconds a few years ago.
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[BRIEFING.COM] Our sector watch section indicates the technology (0.1%), industrials (0.2), health care (0.1%), and consumer discretionary (0.1%) sectors are strong. They aren't strong in an absolute sense, only in a relative sense as they are faring better than the broader market in the early going.
Overall, there hasn't been a lot of buying interest outside of some specific stocks like Conns Inc. (CONN 66.17, +7.71), which impressed with its latest earnings report and ... More
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