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Get your defensive plan ready

Indexes might not be in correction territory, but they're getting closer. Now's the time to consider what moves to make.


Wal-Mart, Home Depot and other big-box retailers go to great lengths to prepare for natural disasters.

By Kim Peterson Aug 26, 2011 2:30PM
Who prepares for hurricanes better than just about anyone? Wal-Mart (WMT) and Home Depot (HD).

Those big-box retailers have been in hurricane-anticipation mode for nearly a week, NPR reports. They're an important stop for worried residents seeking plywood, duct tape, bottled water and batteries.

And the last thing they want is empty shelves. 

The company's newest intern is a Brown University student who told the world how to dismantle the smartphone's security restrictions.

By Kim Peterson Aug 26, 2011 2:14PM
How do you land a coveted internship at Apple (AAPL)? Tell the world how to hack the iPhone.

Nicholas Allegra, 19, says he will start an internship at Apple in September. That's a bit of a surprise, considering that the Brown University student created the JailbreakMe code that lets people pull off the security restrictions Apple built into the iPhone.

And Allegra made it very easy to do. In fact, iPhone users just had to visit to automatically hack the device, opening up the phone to apps that were not authorized by Apple. Allegra was bold and brash and probably created some large headaches for a company that likes to keep tight control on all aspects of its products. 

Thursday’s news-driven rally fizzled out, and with ominous bear flag patterns forming on the charts for several major stock indices, the short-term market action will be critical.

By Aug 26, 2011 12:09PM

By Tom Aspray,

The close on Tuesday (August 23) suggested a short-term bottom was in place, which indicated that the major averages and ETFs should challenge or exceed last week’s highs.  Wednesday’s higher close supported this view.

Stocks started off Thursday in a bullish mood following Warren Buffett’s investment in Bank of America (BAC), but the rally fizzled, which makes Friday’s action quite important.

If the financial media is correct in concluding that the market’s strength was based on today’s speech by Fed Chairman Ben Bernanke, it suggests that the market is really in weak hands. Though it is possible Bernanke will say something supportive for the markets, basing a trading or investing strategy on this hope is not really a strategy at all.

The primary concern now is that many of the key global markets show chart formations that are commonly referred to as “bear flags.” These are continuation patterns which are an interruption or pause in the overall trend. These will be confirmed by a break below Monday’s lows, which would signal another sharp market decline.

If the NY markets were forced to close because of hurricane Irene, and with overseas markets also weak, it could make any decline even worse.


HP shares tumble after a catastrophic conference call and Verizon's union strikes out in this week's round-up of business-world blunders.

By TheStreet Staff Aug 26, 2011 11:44AM

By Greg Greenberg, TheStreet


Here is this week's round-up of the dumbest actions on Wall Street.


5. HP's catastrophic conference call


We can only believe that Bill Hewlett and Dave Packard would be rolling over in their garage if they had heard HP (HPQ) CEO Leo Apotheker on last week's catastrophic conference call.


Shares of the once-proud technology giant took their biggest intraday shellacking in three decades last Friday, tumbling 20% after Apotheker issued forecasts that missed analysts' estimates and unveiled strategic changes that had Wall Street analysts scratching their heads. In a bid to boost margins, Apotheker laid out a series of major maneuvers, including jettisoning the company's personal computer business, closing its tablet and smartphone hardware unit and acquiring the enterprise software provider Autonomy Corp. for about $10.3 billion.


Despite high expectations, the Fed chief's speech was no repeat of last year's confidence-boosting performance. That's a shame.

By Anthony Mirhaydari Aug 26, 2011 10:58AM

The cliffhanger ended in disappointment. All eyes were on Federal Reserve Chairman Ben Bernanke's speech at the Jackson Hole symposium this morning for clues, hints and winks -- anything that might suggest the central bank was willing and able to support a newly weakened economy.


Many investors were hoping for another round of money printing like the $600 billion bond-buying program that was teased at Jackson Hole last year. But as I discussed in my column this week, something less was more likely.


Yet I still expected something to sooth raw nerves. Investors, executives and consumers are all feeling like something is not right. And their caution threatens to pull a still-growing economy into outright recession. Instead, we got nothing -- aside from a promise that the Fed will reconsider additional policy options at the end of September. So the question is: Now what?


His deal with Bank of America helps us avert bigger catastrophe.

By Jim Cramer Aug 26, 2011 9:12AM

jim cramerthe streetDid Bank of America (BAC) give away the store to Warren Buffett? Does it not matter? Is Doug Kass within the realm when he says, "Say it ain't so, Brian?"


Here’s my take. I heard this same sort of criticism when Prince Alaweed took the historic plunge and bought a huge chunk of Citigroup (C) the first time it imploded, in 1990-1991. People thought that the store had been given away. That the dilution was ridiculous.


The critics were ridiculous. He saved Citigroup.


Now, Bank of America wasn’t in as bad shape as Citigroup back then. But you have to understand that the pressure on this institution’s stock was eventually going to show up on the ratings agencies’ screens. We know that they downgrade when they see stocks plummet endlessly. We saw that time and again. Even when they shouldn’t.


Sell aggressive stocks and insurers now -- and jump into Home Depot.

By InvestorPlace Aug 26, 2011 8:48AM

By Jeff Reeves, Editor,

investorplaceHurricane Irene is dominating the headlines this weekend, with the entire East Coast on high alert. The storm will strike North Carolina early Saturday morning and sweep all the way up to Maine if its current path holds, most likely roaring through New York, Boston, D.C. and Philadelphia.

Big storms like this create a big fear factor because residents in affected areas don't know what to expect. Will there be flooding? Lost power? Will it all blow over? It seems prudent to prepare for the worst and hope for the best.


Investors hope to see a third round of quantitative easing, but the economy is growing strongly enough without it.

By Jim J. Jubak Aug 25, 2011 4:42PM
Jim JubakThe odds are climbing against any Federal Reserve announcement from Friday's Jackson Hole conference big enough to make global stock markets happy.

Stocks have rallied strongly this week, on hopes that Fed chief Ben Bernanke will announce a third program of quantitative easing and set off another rally in the stock market.

That would echo Bernanke's hints at a second program of quantitative easing at last year's Jackson Hole event. Those hints eventually turned into a 28% rally in stocks that peaked on April 29.

But recent data have turned against those hopes by delivering better-than-expected news. The U.S. economy isn't growing very strongly, the numbers say, but it is growing strongly enough so that dramatic action from the Fed would seem like overkill.

Berkshire Hathaway will invest $5 billion in Bank of America, and could become a major stakeholder if all warrants are exercised.

By Kim Peterson Aug 25, 2011 4:20PM
Warren Buffett to the rescue -- again.

Berkshire Hathaway (BRK.A) has agreed to invest $5 billion in Bank of America (BAC), reviving the stock price and giving investors more faith in the financial sector's future. Shares of the bank rose 15% early Thursday, but by the close had settled to a 9% gain at $7.61. 

Another round of mortgage purchases is on the menu of possible stimulus options to be unveiled during Bernanke's Jackson Hole speech.

By Anthony Mirhaydari Aug 25, 2011 2:25PM

Like children waiting impatiently for Christmas morning, Wall Street is being held in suspense. But instead of Santa Claus bearing gifts, it's all about Federal Reserve Chairman Bernanke's speech at the Jackson Hole, Wyo., summit of central bankers Friday.


Will Bernanke manage a repeat performance and unleash another stock market rally by teasing additional policy tools? That's what happened last year as he tipped what eventually became the $600 billion money printing operation that was dubbed QE2 by the press.


Unfortunately, and as I discussed in my column this week, lingering inflationary pressures will likely keep a QE3 off the table. Instead, a number of other options are available, with the most probable being an increased focus on pushing down long-term interest rates by lengthening the average maturity of the Fed's bond holdings. What I didn't discuss in my column, and what is generating increased chatter across Manhattan trading desks, is that this strategy could have a pleasant side effect: support for the beleaguered housing market.


Irene is already turning into a rare and extraordinary storm that will batter the region all the way to New England.

By Kim Peterson Aug 25, 2011 1:52PM

Updated Friday, 12:30 p.m. ET

The East Coast has begun seeing rains from Hurricane Irene, one of the most extraordinary storms to hit the country in recent history.

The storm's core is expected to hit the North Carolina coast Friday night, and by Sunday morning, it could be within miles of the New York. New York City has already evacuated nursing homes and hospitals in areas likely to be hit with storm surges.


But the region caught a small break Friday morning.


The soft-spoken, slightly reserved Southerner is ready for the biggest job in Silicon Valley.

By TheStreet Staff Aug 25, 2011 11:59AM

By James Rogers, TheStreet


Tim Cook has an unenviable task filling Steve Jobs' New Balance sneakers, although Apple (AAPL) investors have little to fear from the soft-spoken, slightly reserved Southerner who now has the highest-profile job in Silicon Valley.


Inevitably, Apple will miss Jobs' genius for innovation and predicting the next big thing in consumer technology, but Cook's talents should not be underestimated.


While Jobs is widely regarded as a visionary, Cook has developed impressive skills working behind the scenes at Apple. As an IT operations maven, Cook has expertise that will prove crucial in helping Apple roll out its ambitious cloud strategy.


To benefit from the metal's volatility, investors need a clear plan they can stick to.

By TheStreet Staff Aug 25, 2011 11:58AM

By Roger Nusbaum, TheStreetTheStreet


Gold (-GC) has been on a wild ride the past couple of weeks. It went up $100 in a few days and then went down $100 in about 24 hours.


Early Tuesday, we sold one-third of our clients' position in the SPDR Gold Trust (GLD) based on sentiment indicators like the number of analysts calling for $3,000 as the actual price was approaching $2,000 and the fact that GLD surpassed the SPDR S&P 500 ETF (SPY) as the largest ETF.


On a more fundamental level, a partial sale was warranted as our position grew well beyond our target after this most recent move to $1,900. Since then, the price has obviously gone down quickly. But the fear of U.S. dollar debasement still exists, which underpins the fundamental case for gold even if the next $150 is down and not up.


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 Aug 25, 2011 11:23AM

By Tom Aspray,

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.

By Aug 25, 2011 10:32AM
By Neil George
Special to

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.

Otelco (OTT) 
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.



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[BRIEFING.COM] The major averages finished the session on a modestly higher note, but not before heavy selling pressure sent the Nasdaq Composite (+0.3%) for a test of its 200-day moving average. The S&P 500, meanwhile, added 0.7% with all ten sectors posting gains.

Equities climbed at the open with the advance built on the relative strength of biotechnology and other momentum names. Despite the solid early gains in those areas, the market began fading from its high as multiple ... More


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