It’s one of the biggest and best retailers in the world with a market cap of more than $230 billion and more than 11,400 stores around the globe. These include discount stores, supermarkets, supercenters, warehouse clubs and restaurants, along with retail websites. It’s been around for decades, withstanding… Read More

#-ad_banner-#Like many of my readers, I like to set aside time every week to read the latest issue of my colleague John Kosar’s Market Outlook advisory.  If you don’t read Market Outlook, I highly recommend adding it to your list; the quality analysis from my fellow Chartered Market Technician provides an in-depth look at what’s going on in the major indices, commodities markets and important market news — information all investors should stay on top of. Plus, it comes free with every subscription to my premium advisory, Alpha Trader. In the past few issues, John’s outlook has turned cautious as… Read More

#-ad_banner-#Like many of my readers, I like to set aside time every week to read the latest issue of my colleague John Kosar’s Market Outlook advisory.  If you don’t read Market Outlook, I highly recommend adding it to your list; the quality analysis from my fellow Chartered Market Technician provides an in-depth look at what’s going on in the major indices, commodities markets and important market news — information all investors should stay on top of. Plus, it comes free with every subscription to my premium advisory, Alpha Trader. In the past few issues, John’s outlook has turned cautious as a handful of the important technical indicators he covers start to flash bright yellow warning signals. Concurrently, my Alpha Score system — which ranks stocks from 0 to 200 based on technical and fundamental indicators — has tagged fewer buy recommendations than normal.  So, what’s going on with the market? If you look solely at the major indices, nothing seems amiss — the S&P 500, Nasdaq Composite and Wilshire 5000 are off only modestly from their 52-week highs. But despite the relative calm on the surface, hundreds of stocks are quietly tanking. A classic technical indicator has confirmed my belief… Read More

Although you could not tell from looking at the Dow Jones U.S. Restaurants & Bars Index, the group has had a rough time lately. From earnings bombs to reduced outlooks, there is something ugly happening beneath the surface. And that means the restaurant sector is a prime place to look for stocks about to crack. To be sure, the index and some of the heavyweights in the group are still in rising trends, trading above their 50-day moving averages. But we do not have to look too hard to find stocks that are not quite as healthy. … Read More

Although you could not tell from looking at the Dow Jones U.S. Restaurants & Bars Index, the group has had a rough time lately. From earnings bombs to reduced outlooks, there is something ugly happening beneath the surface. And that means the restaurant sector is a prime place to look for stocks about to crack. To be sure, the index and some of the heavyweights in the group are still in rising trends, trading above their 50-day moving averages. But we do not have to look too hard to find stocks that are not quite as healthy.  #-ad_banner-# For instance, Chipotle Mexican Grill (NYSE: CMG), a market favorite for the past few years, looks ready to tumble. From a fundamental perspective, we have to wonder why restaurant fortunes in general have not improved in recent months. Over the winter, the unusually cold weather was blamed. But as the days got warmer, sales did not heat up. And even as gasoline prices plummeted diners did not open their wallets any wider.  On the sentiment front, poor action on good news is bearish. When things go wrong when there is every reason for them to go right… Read More

#-ad_banner-#When buy and sell decisions are motivated by emotion and then amplified by mindless computer programs, stock movements can become irrational. But after the dust settles and traders gather their wits, we often find prime trading opportunities. The starkest example of this recently is Apple (Nasdaq: AAPL), which has suffered a mini-crash in the past three weeks with shares down as much as 16% from their July 20 high. Ironically, Apple’s violent move lower began after the company reported record Q3 earnings, beating estimates on the top and bottom lines. However, it sold only 47.5… Read More

#-ad_banner-#When buy and sell decisions are motivated by emotion and then amplified by mindless computer programs, stock movements can become irrational. But after the dust settles and traders gather their wits, we often find prime trading opportunities. The starkest example of this recently is Apple (Nasdaq: AAPL), which has suffered a mini-crash in the past three weeks with shares down as much as 16% from their July 20 high. Ironically, Apple’s violent move lower began after the company reported record Q3 earnings, beating estimates on the top and bottom lines. However, it sold only 47.5 million iPhones, less than the 48.8 million analysts had expected. Shares immediately plummeted 6.7%, which was a gross overreaction in my opinion. But the selling continued and Apple dipped below its 200-day moving average on Aug. 3. Many consider the 200-day to be an important trend indicator. Stocks trading above this average are said to be in an uptrend, while stocks trading below it are considered to be in a downtrend. More importantly, a downside penetration of the 200-day moving average triggers sell orders. So… Read More

#-ad_banner-#Today I want to tell you about an investing strategy that defies logic. It shouldn’t work based on everything we’ve learned about the stock market. Yet it does. In fact, for over half a century, investors and traders have used this strategy to produce unparalleled results. And no, for those of you who may be wondering, this strategy doesn’t involve options, derivatives or any other obscure financial product. What’s more, what I’m about to show you can be used as part of any general investing strategy — regardless of whether you’re focusing on income, growth, blue chips, small… Read More

#-ad_banner-#Today I want to tell you about an investing strategy that defies logic. It shouldn’t work based on everything we’ve learned about the stock market. Yet it does. In fact, for over half a century, investors and traders have used this strategy to produce unparalleled results. And no, for those of you who may be wondering, this strategy doesn’t involve options, derivatives or any other obscure financial product. What’s more, what I’m about to show you can be used as part of any general investing strategy — regardless of whether you’re focusing on income, growth, blue chips, small caps or commodities. Specifically, I’m talking about relative-strength investing. Longtime readers might already be familiar with relative-strength investing. We’ve talked about it before in previous StreetAuthority Daily issues. But for those who need a refresher, allow me to provide a brief recap. Relative-strength investing is simply a type of momentum investing. It involves buying the best-performing stocks (relative to the market) and holding them until their momentum changes course. To most investors, especially those considered value investors, this strategy probably sounds ridiculous. After all, most people have heard the phrase “buy low, sell high.” Since relative-strength investors buy stocks that… Read More

While old media stocks like Viacom (Nasdaq: VIAB), Walt Disney (NYSE: DIS) and 21st Century Fox (Nasdaq: FOXA) were hit with bad news and huge losses last week, Netflix (Nasdaq: NFLX) scored three straight record closing highs before succumbing to profit-taking on Friday. Shares have been on a tear, more than doubling in the past four months. I’m sure plenty of investors are kicking themselves for missing the boat, but it’s not too late. When a stock makes a new all-time high, especially a high-momentum growth stock like NFLX, it tends to keep moving higher. And Friday’s sell-off provides an… Read More

While old media stocks like Viacom (Nasdaq: VIAB), Walt Disney (NYSE: DIS) and 21st Century Fox (Nasdaq: FOXA) were hit with bad news and huge losses last week, Netflix (Nasdaq: NFLX) scored three straight record closing highs before succumbing to profit-taking on Friday. Shares have been on a tear, more than doubling in the past four months. I’m sure plenty of investors are kicking themselves for missing the boat, but it’s not too late. When a stock makes a new all-time high, especially a high-momentum growth stock like NFLX, it tends to keep moving higher. And Friday’s sell-off provides an attractive short-term entry level. Netflix is being driven by strong growth domestically and abroad. On July 15, the video streaming giant reported better-than-expected second-quarter earnings of $0.06 per share on revenues of $1.64 billion. #-ad_banner-# At the end of the quarter, its subscriber count stood at 65.6 million globally, 31% higher than the same quarter last year. Both domestic and international subscriber gains were well ahead of estimates, and the company introduced its services in Australia and New Zealand. Now it has its sights set on Japan and Europe. The Japanese launch is set for Sept. 2. And in Europe,… Read More

Just a week after successfully rebounding from its 200-day moving average, the S&P 500 collapsed right back into this widely watched major trend proxy at the end of last week for the third time since late June.   The index’s inability to sustain a rally from a major support level like this is problematic. It suggests a lack of bullish conviction by investors and may be the precursor to the first real corrective decline in years.   #-ad_banner-# All major U.S. indices closed in the red last week, led lower by the small-cap Russell 2000, which lost 2.6%. Two weeks… Read More

Just a week after successfully rebounding from its 200-day moving average, the S&P 500 collapsed right back into this widely watched major trend proxy at the end of last week for the third time since late June.   The index’s inability to sustain a rally from a major support level like this is problematic. It suggests a lack of bullish conviction by investors and may be the precursor to the first real corrective decline in years.   #-ad_banner-# All major U.S. indices closed in the red last week, led lower by the small-cap Russell 2000, which lost 2.6%. Two weeks ago, I pointed out an emerging bearish chart pattern in this market-leading index that continues to target a decline to 1,175, which is 2.6% below Friday’s close. Defensive Utilities Stand Out In last week’s report, I said utilities were on my radar screen as a potential sector to overweight this quarter. It was actually the only sector of the S&P 500 to post a positive close last week, gaining 0.9%. Utilities now appear poised for more strength and relative outperformance.  The chart of the Utilities Select Sector SPDR ETF (NYSE: XLU) displays a bullish inverse head-and-shoulders pattern that emerged as… Read More

Studies have shown that a large portion of a stock’s gain can be attributed to the sector it is in. With that in mind, the food products group is now outperforming the market, and the Dow Jones U.S. Food Products Index recently broke out to a 52-week high. #-ad_banner-# Within that group is Hershey (NYSE: HSY), which I highlighted last week. Also represented are cereal makers Kellogg (NYSE: K) and General Mills (NYSE: GIS). Both of these brand-name stocks have already scored technical breakouts of their own. Today, I want to highlight a little-known food company that… Read More

Studies have shown that a large portion of a stock’s gain can be attributed to the sector it is in. With that in mind, the food products group is now outperforming the market, and the Dow Jones U.S. Food Products Index recently broke out to a 52-week high. #-ad_banner-# Within that group is Hershey (NYSE: HSY), which I highlighted last week. Also represented are cereal makers Kellogg (NYSE: K) and General Mills (NYSE: GIS). Both of these brand-name stocks have already scored technical breakouts of their own. Today, I want to highlight a little-known food company that is just starting to make a move higher — Flowers Foods (NYSE: FLO). The company makes and markets bakery products, including the Nature’s Own, Wonder and Tastykake brands. What initially put Flowers Foods on my radar screen was the failed rebound attempt in wheat prices. The commodity is now back down near 52-week lows. Beyond the fundamentals of falling input prices, FLO sports a chart with a fledgling technical breakout and is supported by strong sector performance even as the broader market struggles. The technicals are not fancy. On-balance volume during the May-to-July decline was flat instead of… Read More

One of the proven ways to become a great investor is to study great investors. Every time an investing legend makes a successful trade, a clue is left behind. For instance, every buy and sell decision Warren Buffett makes tells us more about his process, and those insights can help us create our own success. Today, I’m going to focus on an important lesson from a lesser-known, but wildly successful investor. While I’m sure you’re familiar with Buffett, Peter Lynch and other well-known investors, you might not be familiar with Lynn Tilton. Tilton is the CEO of the $8 billion… Read More

One of the proven ways to become a great investor is to study great investors. Every time an investing legend makes a successful trade, a clue is left behind. For instance, every buy and sell decision Warren Buffett makes tells us more about his process, and those insights can help us create our own success. Today, I’m going to focus on an important lesson from a lesser-known, but wildly successful investor. While I’m sure you’re familiar with Buffett, Peter Lynch and other well-known investors, you might not be familiar with Lynn Tilton. Tilton is the CEO of the $8 billion private equity firm Patriarch Partners and one of the more obscure money managers I follow. She has a number of critics and has seen her fair share of controversy. But many of her investments have been successful and uncontroversial, and we can learn a great deal from them. Tilton is known for her ability to turn around struggling companies in basic industries, and she’s credited with saving 700,000 jobs at the roughly 75 companies Patriarch invests in, including MD Helicopters, Stila Cosmetics and Gorham Paper and Tissue. Tilton has often pointed out that one of the “universal lies” companies tell… Read More

For the fourth time since February, the bellwether S&P 500 tested and successfully rallied last week from its 200-day moving average — a widely watched major trend proxy currently situated at 2,068 — to lead yet another broader market rebound. Last week’s rally was again driven by the Pavlovian “buy the dip” mentality that investors have been conditioned with following years of quantitative easing by the Federal Reserve. While QE officially ended in October, as long as this strategy continues to work, investors are likely to keep doing it. Meanwhile, the S&P 500 continues to ping-pong within a tight, 4%-to-5%… Read More

For the fourth time since February, the bellwether S&P 500 tested and successfully rallied last week from its 200-day moving average — a widely watched major trend proxy currently situated at 2,068 — to lead yet another broader market rebound. Last week’s rally was again driven by the Pavlovian “buy the dip” mentality that investors have been conditioned with following years of quantitative easing by the Federal Reserve. While QE officially ended in October, as long as this strategy continues to work, investors are likely to keep doing it. Meanwhile, the S&P 500 continues to ping-pong within a tight, 4%-to-5% trading range. Despite a lot of choppy trading and historically large daily trading ranges, the index closed July up only a meager 2.2% for the year. #-ad_banner-# All sectors of the S&P 500 ended in positive territory last week except for beleaguered energy, which lost 0.2%. Leading last week’s rebound was defensive utilities, which gained 3.9%, while quietly becoming the best-performing sector of the past month.   Utilities are now on my radar screen as a potential sector to overweight this quarter. However, I want to see a little more price strength amid some positive asset flows… Read More