At the bottom of the pattern, there is a support level (currently at ~14,800) that the Dow has rallied off of several times. At the top of the pattern, there is a resistance level (at ~15,700) that the market has bumped its head on several times. The Dow is waiting for a major catalyst that will cause it to break out in either direction, likely resulting in a large move, and I see the prospect of a Fed taper (or lack thereof) as the most probable catalyst. Todays strong jobs report is causing traders to slightly increase their 10 best performing stocks bets that the Fed will taper at its December 17th and 18th meeting, but the general consensus is that the Fed will wait until 2014.
Managers try to impress investors by maintaining short-term earnings, and they do so by avoiding the costs of capital spending and by neglecting long-term projects. [Investor Chronicle] The short-term focus of the stock market was an issue which used to be put forward by people who were against ‘Anglo-Saxon’ shareholder capitalism, and in favor of ‘patient capital’ stakeholder capitalism. These people used to point out that whilst the US was very good at innovating (the transistor, integrated circuits, etc.), other countries (like Japan) used to have the patient capital and institutions to build industries on these. After Japan bubbled itself out of contention in the late 1980s, early 1990s, these arguments largely disappeared from the limelight, but that doesn’t mean there wasn’t anything in them. Speaking of innovation. Start-up capital The stock market still functions as a means for financing start-ups, although not really in the first stages.
A New Investment Classic: Trade Like A Stock Market Wizard
(Although the published S&P 500 returns are market capitalization weighted, my analysis is focused on the individual stocks relative characteristics, so simple averages are more appropriate.) (Data source: Financial Visualizations FinViz.com) Note the clear distinction occurring. Todays better performing stocks are this years lower ones, and vice versa. They are also the ones closer to their 200-day moving averages. From a fundamental standpoint, they are better valued with a lower forward P/E ratio (higher forward earnings yield) and a higher dividend yield. The bottom line Although no one-day performance creates a stock market trend, todays results are noteworthy because they are occurring just as a change of outlook by many market observers and participants is taking place.
The Standard & Poors 500 is up 24 per cent on the year, on course for its best year in a decade. (Richard Drew/AP) Specialists Paul Cosentino, and Michael Shearin, work on the floor of the New York Stock Exchange. The Standard & Poors 500 is up 24 per cent on the year, on course for its best year in a decade. (Richard Drew/AP)
What UPS and FedEx Stock Prices Action Signals for the Market
The companys average consensus is for earnings to grow 25% next fiscal year. But UPS and FedEx arent exceptions; so many stocks have traded like these two companies. They already appreciated considerably since the beginning of the year, but third-quarter earnings were a catalyst for more bidding by investors. This market is clearly overbought, but its likely to stay that way without a catalyst galvanizing a major change in investor sentiment. There are always trades in any market, but it is difficult to be a buyer when most stock market indices are trading at record highs. But genuine buy low/sell high trades are also difficult in this kind of market.
Later in the chapter: “Really successful companies generally report earnings increases of 30 to 40 percent or more during their superperformance phase” (pg. 127). Chapter 9, “Follow The Leaders”, sums up the kind of stocks Minervini likes: “I made 99 percent of my profits in the stock market by trading the leading names” (pg. 161). As far as timing: “More than 90 percent of superperformance stocks emerge from bear markets and general market corrections” (pg.