Archive for January, 2014

Must-see: The market’s next moves may shock you

Editor's note: Yesterday, we showed you why our colleague Jeff Clark was expecting a big short-term rally. The S&P 500 soared 20 points today, so we'd say his prediction is off to a great start. Today, Jeff is back with his thoughts on the intermediate to longer term, including why he thinks 2014 could be a very rough year for most investors… but an incredibly profitable one for some readers…
 
From Jeff Clark, editor, S&A Resource Report:
 
Stocks are not in a bear market yet. But they're headed in that direction.
 
The stock market has been forming an important long-term top for the past few months. We know this because market tops are made just about every six to seven years. The last top was in September 2007. So we're in the time frame for another right now.
 
Also, we're seeing the same sort of warning signs today that we see during every topping process. Specifically, long-term interest rates have spiked sharply higher over the past year. And investors have purchased a record amount of stock on margin.
 
But until this point, we've been missing poor price action. Despite the classic warning signs of an impending bear market, the S&P 500 continued higher into the end of 2013. It's only after the action of the past week that we can say the bear might finally be waking up…
 
Regular readers know my gauge for defining bull and bear markets is how the S&P 500 is trading relative to its 20-month exponential moving average (EMA). If the index is trading above the 20-month EMA, stocks are in a bull market. If the index is trading below the line, it's a bear market.
 
Here's how the S&P 500 looks today…
 
 
The two red circles on the chart show the previous two times the S&P 500 dipped below its 20-month EMA and entered bear-market territory. (The stock market recovered quickly following the breach of the line in 2011, and a bear market never developed.)
 
Right now, the S&P 500 is about 190 points above its 20-month EMA. It's also only down about 4% from its 2014 high. So it's way too early to be calling this a bear market.
 
But it's not too early to trade like it's one. Let me explain…
 
Contrary to popular belief, traders don't make money in bear markets by shorting stocks aggressively and holding those short positions until the final panic that marks the bottom. There are far too many whipsaws, too many one-day-wonder rallies, too many counter-trend moves. In these conditions, traders usually short stocks aggressively into weakness. Then a strong counter-trend rally blows those positions up, and traders end up taking a loss.
 
Bear markets are brutal to both the long and short sides of the market.
 
The way to profit in a bear market is to focus on the short term, take advantage of extreme moves, and take profits quickly.
 
There will be opportunities to profit on moves in both directions, up and down. In 2008 – during one of the worst bear markets of our generation – my S&A Short Report subscribers had more profitable trades from the long side of the market than from the short side.
 
Bear markets are filled with emotional moves. Investors panic to get out when it looks like stocks are ready to fall off a cliff. They panic to get in when stocks start to bounce and traders fear they've missed the bottom. All that emotion creates volatility. It creates fast moves where indicators rapidly flip back and forth between oversold and overbought conditions. And it creates lots of trading setups for traders who are looking to anticipate those moves.
 
I expect 2014 will be a rough year for most investors. But it should be enormously profitable for traders who can adapt to bear-market conditions.
 
Crux note: Jeff recently sat down for an interview explaining how you could make the biggest and fastest investment gains of your entire life in the coming bear market. Click here to view it now.
 
More on stocks:
 
 
 

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Porter Stansberry: How to profit from America’s incredible shale gas boom

From The Energy Report:
 
Are you cashing in on America's free energy source? Porter Stansberry of Stansberry & Associates is more bullish than ever on what he calls America's "free energy," natural gas.
 
He's stocked the model portfolio of his newsletter, Stansberry's Investment Advisory, with natural gas companies as well as the companies packaging it and moving it. His energy position was by far the highest-producing segment of his model portfolio over the past two years, some of those holdings even having doubled.
 
In this interview with The Energy Report, Stansberry discusses the macroeconomic climate facing North American investors and how to take advantage of a building natural gas trend.
 
… TER: Last time we interviewed you, you were very bullish on natural gas. In fact, you said, "I'm more bullish on natural gas today than I've ever been in my life." Is that still true?
 
PS: It absolutely is. I'm extremely bullish on the entire export energy complex in America: natural gas, propane, ethane, and everything that surrounds those industries like ships, pipelines and refineries.
 
The entire complex is going to boom for a wonderfully logical reason that everyone can understand: In the U.S., natural gas and its other liquid components are free. Literally, this valuable energy source is being flared, is being burned into the air at lots of drill sites because we don't have enough pipelines to collect it all yet. That is even though natural gas is going for $17/thousand cubic feet in Japan and even though propane is going for $100/barrel in Germany.
 
These are very valuable energy sources that have lots of demand globally. The only thing we have to do to make huge profits is build pipelines, refineries and ships. This is going to be a very long, wonderful market for America.
 
TER: How are you playing that opportunity?
 
 
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Watch "The Crash of 2014" before Thursday
Must-see new S&A video reveals why this year could either make you rich… or victim to the biggest crash since 2008. Includes how to claim a $4,000 bonus, till January 30, to prepare. Click here to watch now.
————————————-

 
More from Porter:
 
 
 

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This uncanny chart shows when the next major correction could bottom

From Chart in Focus:
 
The QE bubble has kept the bull market rolling longer than it was supposed to.  This is similar to the Internet bubble top for the stock market in 2000, and the real estate bubble top for stocks in 2007, both of which arrived later than they were supposed to.
 
The chart this week updates one I showed back in December 2012, exploring how the spread between the 10-year and 1-year Treasury yields can provide a leading indication for where stock prices are going to go approximately 22 months later.  It is not a perfect leading indication (I'm still looking for THAT), mostly because in a bubble the stock market can continue higher even after this messenger says it is supposed to turn down.
 
We saw that quite well back in 2000.  The Internet bubble pulled up stock prices to their highs in 2000, even though the Advance-Decline line had peaked in early 1998.  But the 2002 market bottom arrived on schedule.
 
Similarly, the real estate bubble which peaked in 2005-06 still saw stock prices continue up into 2007, but eventually the piper was paid and the 2009 stock market bottom arrived on schedule.
 
This yield spread model said that the stock market should have peaked back in…
 
 
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This opportunity ends TONIGHT…
 
Must-see new S&A video reveals why this year could either make you rich… or victim to the biggest crash since 2008. Includes how to claim a $4,000 bonus, till January 30, to prepare. Click here to watch now.
————————————-
 
More on stocks:
 
 
 

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New study shows a simple computer test can predict if you’ll die early

From Newsmax:
 
Adults with slow reaction times may have an increased risk of early death, a new study suggests.
 
British researchers looked at more than 5,000 Americans, aged 20 to 59, who had their reaction times measured using a simple test in which they had to press a button when they saw an image appear on a computer screen.
 
The participants were then followed for 15 years. During the follow-up period, 7.4 percent of the participants died. Those with slower reaction times were 25 percent more likely to die from any cause than those with average reaction times.
 
This remained true after the researchers accounted for age, sex, ethnicity, socioeconomic background and lifestyle factors, according to the study, which was published in the current issue of the journal PLoS One.
 
There was no link between…
 
 
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This opportunity ends TONIGHT…

Watch "The Crash of 2014" before Thursday
Must-see new S&A video reveals why this year could either make you rich… or victim to the biggest crash since 2008. Includes how to claim a $4,000 bonus, till January 30, to prepare. Click here to watch now.
————————————-

 
More on health:
 
 
 

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China and the United States have never agreed to this before

 
 
 

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Ten "ridiculously common" science myths you probably believe

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Your morning glass of "not from concentrate" orange juice may not be what you think

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Doc Eifrig: This is advice you’ll probably never hear from your family doctor

From Dr. David Eifrig, MD, MBA, editor, Retirement Millionaire:
 
Please, always push your doctor to back up the "conventional wisdom"… For example, doctors have long told pregnant women to avoid eating peanuts and tree nuts, and that children should avoid eating peanuts until after age three to prevent a peanut allergy. The American Academy of Pediatrics (an organization of 60,000 pediatricians with the goal of improving the health of children) has supported this claim for decades.
 
About 1% of Americans (adults and children) have a peanut allergy. While that number is small, it's rising. Between 1997 and 2007, the number of peanut allergies tripled. But there's no proof linking peanut-eating pregnant women to childhood nut allergies.
 
And researchers at Boston Children's Hospital now refute the old guidelines. They studied more than 8,000 children and their mothers. Children whose mothers ate peanuts during pregnancy were no more likely to have a peanut allergy than children whose mothers avoided peanuts.
 
So moms, don't worry about snacking on nuts… they're one of my favorite ways to sate hunger and a great source of protein.
 
Crux note: Regular Crux readers know Doc Eifrig is an expert at cutting through the "conventional wisdom" to uncover science-based, yet easy-to-understand, ways to boost your health… but he's also an expert at finding the same kind of unconventional ideas to boost your income and savings for retirement.

Recently, he found an unusual new way to make extra money for your retirement. It has absolutely nothing to do with stocks, bonds, options, or any other traditional investment… yet it can allow almost anyone to earn an extra $350 to $1000 each week. Click here for all the details.

 
More from Doc Eifrig:
 
 
 

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Gold Crybabies Are Born to Lose, Says Lawrence Roulston

January 30, 2014 (Investorideas.com Mining stocks newswire) Geologist, engineer, Midas-touch investor and financial newsletter publisher Lawrence Roulston has little patience for investors without the nerves to hold onto a good thing during tough times.

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"Dr. Doom" Marc Faber: Sell U.S. stocks and buy these surprising assets immediately

From Zero Hedge:
 
Beginning by disavowing Mario Gabelli of any belief that rising stock prices help 'most' people ("Fed data suggests half the U.S. population has seen a 40% drop in wealth since 2007"), Marc Faber discusses his increasingly imminent fears of the markets in this recent Barron's interview.
 
Quoting Hussman as a caveat, "The problem with bubbles is that they force one to decide whether to look like an idiot before the peak, or an idiot after the peak. There's no calling the top." Faber warns there are a lot of questions about the quality of earnings (from buybacks to unfunded pensions) but "statistics show that company insiders are selling their shares like crazy."
 
His first recommendation – short the Russell 2000, buy 10-year U.S. Treasuries ("there will be no magnificent US recovery"), and miners and adds "own physical gold because the old system will implode. Those who own paper assets are doomed."
 
Via Barron's:
 
Faber: This morning, I said most…
 
 
Crux note: Marc Faber may be known as "Doctor Doom" in some circles… but his prognostications have a funny way of coming true more often than not. Jeff Clark, editor of the S&A Short Report, also sees "The correction of 2014" beginning right now. His reasons mirror many of Marc's… and when two of the smartest investment gurus we know agree so closely, we pay attention.
 
Jeff's made a presentation that explains why the markets are about to get very volatile… and how you can use that volatility to profit, while those around you are frozen with fear. To view this eye-opening presentation – and learn about the "M-Wave" – click here.
 
More from Marc Faber:
 
 
 

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