When it comes to technical analysis, I follow a century-old—and very effective—market direction tool called Dow theory. And right now, that indicator is flashing a red warning sign.The idea behind Dow theory is very simple. It says that for stock market prices to continue rising, both the Dow Jones Transportation Index and the Dow Jones Industrial Average need to be advancing at the same time.As it stands, this. Read More
It’s finally over…The quantitative easing programs initially started by the Federal Reserve six years ago are (for now) history.In its statement on October 29, the Federal Reserve said, “Accordingly, the Committee decided to conclude its asset purchase program this month.” (Source: “FOMC Statement,” Federal Reserve, October 29, 2014.)The reason for ending the quantitative easing: “The Committee judges that there has been a substantial improvement in the outlook. Read More
Now that the Dow Jones Industrial Average has fallen 1,035 points (six percent) from its mid-September peak, the question investors are asking is “how far will she go?” For small-cap investors, the drama is greater, as the Russell 2000 Index has fallen 12.5% from its July peak.Since 2009, every market pullback presented investors with an opportunity to get back into stocks at discounted prices. Even some editors here at. Read More
Traditionally, the first big American public company to kick off each new corporate earnings season is Alcoa Inc. (NYSE/AA). For the current quarter, Alcoa reported a net loss of $178 million, or $0.16 per diluted share. The company stated it had some special restructuring costs in the quarter; if you were to exclude them, its corporate earnings were $0.09 per share. (Source: Alcoa Inc., April 8, 2014.)As usual, investors. Read More
I was looking at the chart of priceline.com Incorporated (NASDAQ/PCLN) the other day, as the stock surpassed the $1,000 level. But why would I consider paying so much for a stock when there are cheaper comparables in the same online travel space?It’s true; there are less expensive online travel stocks than priceline.com. But when you are stock picking, you should look at the comparative valuation and growth metrics, and. Read More
Big bank stocks have had a tough year in 2011. They’ve been beaten and bruised. Some big banks, like Belgian financial giant Dexia, have needed a government bailout. During the past week, all of the big banks have had a strong rally due to the added liquidity provided by the Federal Reserve and world central bankers, but do we really know what’s going on behind the scenes?