The bull market is back at full strength… Back in November of last year, I talked extensively about a market breadth indicator called the advance-decline line (AD line) — a technical-analysis tool that charts the number of advancing stocks minus the number of declining stocks. This indicator is a telling sign of what’s going on beneath the surface.  For instance, if the market is hitting new highs, you would look at this indicator to make sure it, too, was advancing and hitting new highs. This would show strong participation in the market and confirm the bullish trend. However, if the… Read More

The bull market is back at full strength… Back in November of last year, I talked extensively about a market breadth indicator called the advance-decline line (AD line) — a technical-analysis tool that charts the number of advancing stocks minus the number of declining stocks. This indicator is a telling sign of what’s going on beneath the surface.  For instance, if the market is hitting new highs, you would look at this indicator to make sure it, too, was advancing and hitting new highs. This would show strong participation in the market and confirm the bullish trend. However, if the AD line fails to keep pace with the underlying index, this is a sign of weakness in the market, signaling a bearish divergence. In my original discussion, I pointed out that the AD line revealed a bearish divergence in late September. A week later, the market selloff began and didn’t let up until December 24.  I touched on this indicator once again in late January, along with another one — the Coppock Curve. These two indicators, along with my Maximum Profit system, were showing bullish characteristics.  We took those bullish signals and loaded up on stocks… and we’ve been nicely… Read More

Value investing is one of the most popular investment strategies used today by individual investors and portfolio managers.  Value investors seek out stocks that can be purchased at a discount to a company’s “real” worth. It’s an approach that’s been refined over the years, but its foundation goes back roughly 85 years with the publishing of Benjamin Graham and David Dodd’s college textbook, “Security Analysis.” Benjamin Graham is properly credited as one of the fathers of value investing. Disciples of his include such notables as Warren Buffett (who is reportedly the only student to receive an “A” in his class),… Read More

Value investing is one of the most popular investment strategies used today by individual investors and portfolio managers.  Value investors seek out stocks that can be purchased at a discount to a company’s “real” worth. It’s an approach that’s been refined over the years, but its foundation goes back roughly 85 years with the publishing of Benjamin Graham and David Dodd’s college textbook, “Security Analysis.” Benjamin Graham is properly credited as one of the fathers of value investing. Disciples of his include such notables as Warren Buffett (who is reportedly the only student to receive an “A” in his class), Walter J. Schloss, Seth Klarman, and Bill Ackman. Graham’s approach was to identify stocks that were trading at a discount to their intrinsic value. And although Graham never fully explained how to determine “intrinsic” value for a stock, we do know that he felt a firm’s tangible assets were a particularly important component. Other factors included earnings, dividends, financial strength, and stability.  Graham knew that identifying such neglected, undervalued stocks was a protracted and patience-trying experience. But he also knew the rewards could be great. And so did his most famous student…  —Recommended Link— The most powerful market research you’ll… Read More

Since December 24, when the S&P 500 registered its lowest mark of 2018 (and a near 20% pullback from its September highs) we’ve seen a robust rebound. The index has rallied more than 12% since then.  I don’t know whether we’re out of the woods just yet… but between a couple of bullish indicators that I’ll discuss below, and my Maximum Profit system signaling four new buys last week, I’d say that the outlook at the moment is positive.  —Recommended Link— What would YOU do with an extra $3,080 every month for the rest of your life? Never worry… Read More

Since December 24, when the S&P 500 registered its lowest mark of 2018 (and a near 20% pullback from its September highs) we’ve seen a robust rebound. The index has rallied more than 12% since then.  I don’t know whether we’re out of the woods just yet… but between a couple of bullish indicators that I’ll discuss below, and my Maximum Profit system signaling four new buys last week, I’d say that the outlook at the moment is positive.  —Recommended Link— What would YOU do with an extra $3,080 every month for the rest of your life? Never worry about cash again. Be free to live how YOU want… go on a lavish vacation… or build up a college fund for the grandkids–it’s up to you.  Get your share here… Indicator #1 The first bullish indicator is one that I touched on previously, and that’s the Advance-Decline Line (AD Line). This is a breadth indicator that shows us how many stocks in the underlying index — the NYSE Composite Index in this case — are advancing and how many are declining. The purpose of looking at a breadth indicator is to gauge market sentiment, whether it’s leaning… Read More

Nearly everyone is anxious… There’s talk of a global recession, much of the U.S. government remains closed for business, China’s economy is looking wobbly, and then there’s the ongoing trade war with that country. Not to mention slowing sales growth from notable companies like Apple (Nasdaq: AAPL) and American Airlines (Nasdaq: AAL). And disappointing holiday sales that have crushed the share prices of many retailers, notably Macy’s (NYSE: M), which is down about 24% since January 9. The latest wall of worry for the market and the economy is that this earnings season is expected to be slower than previous… Read More

Nearly everyone is anxious… There’s talk of a global recession, much of the U.S. government remains closed for business, China’s economy is looking wobbly, and then there’s the ongoing trade war with that country. Not to mention slowing sales growth from notable companies like Apple (Nasdaq: AAPL) and American Airlines (Nasdaq: AAL). And disappointing holiday sales that have crushed the share prices of many retailers, notably Macy’s (NYSE: M), which is down about 24% since January 9. The latest wall of worry for the market and the economy is that this earnings season is expected to be slower than previous quarters. Now, keep in mind that the last three quarters have seen earnings growth of more than 24%. That’s a high standard to beat. To give you an idea of what sort of bar has been set, just look at last quarter’s performance. In the third quarter of 2018, corporate earnings grew by a massive 25.9% over the year-earlier quarter, the strongest such growth in eight years. But expectations for fourth-quarter earnings are much less lofty, as analysts steadily drop their estimates. As recently as September, analysts expected earnings to grow by 17%, but that number has been knocked down… Read More