Strong Week As Fears Subside!

The S&P Index rose 3.7% in a strong week as investor fears began to subside. Economic news was encouraging as employment reports, although just okay, came in better than expected. The ISM report was also better than expected and even July pending home sales showed increases. Retailers got a boost from better than expected August same store sales. In addition, merger activity continues to heat up and overseas markets also showed strength. All of this good news led to a sharp drop in the VIX index, commonly referred to as the fear gauge. With the market rise this week, the month of September is off to a great start. We too are encouraged, but caution that the market has not yet broken through the trading range established over the past few months. We are nearing the upper end of that range, around 1120 on the S&P, which is the resistance level to watch. September and October have traditionally been months of poor performance and high volatility, so caution should remai n in force. We could easily see a minor market pullback, but do think the market will continue to hold the 1050 support level. All in all, we continue to believe the worst is over and remain optimistic the market will finish in positive territory by year end. We have a hedge in place on our largest stock portfolio to provide protection through November expiration. We make take that hedge off sooner if the market can break through and hold above the current trading range high of 1120. Investors that buy on the dips will be rewarded over the long haul as equities today are at valuation levels not seen in quite some time. Established companies paying strong dividends remains an excellent strategy particular for more risk averse investors. The best sign for us last week was the drop in volatility as measured by the VIX index. We had taken a short position expecting a drop in volatility and have profited handsomely, but more important is that this signal may prompt invest ors to begin taking more risk. As confidence grows, investors will move money back into stocks, away from the safety of cash and treasuries. Treasury yields moved up last week, another sign that demand for treasuries may begin to decline. Our largest stock portfolio is doing very well with nearly a 12% YTD return versus market loss of -.9% over the first eight months of the year. The hedge we have in place should help maintain that excess return over the market that we currently enjoy.

Momentum And Value (MAV Screen): Breakout Stocks To Buy!

What Stock Tips do we have? Our stock buy list typically grows as the market shows strength and we added three new stocks for this week. Clearwater Paper (CLW, Paper Products), Solarfun Power (SOLF, Semiconductors), and TRW Automotive (TRW, Auto Parts) all represent good buys. Clearwater showed a lot of price strength during the August swoon and has now begun to run with the September optimism. The PE is only 7.4 and the stock appears poised for more upside given EPS growth of 24%. Solarfun sells photovoltaic cells and modules primarily in international markets. The stock carries more volatility and like other semiconductor stocks took a beating in August. The stock has recovered near its one year highs, a testament to demand given the difficult summer correction. The PE remains modest at 8.8 for a company likely to experience high double digit growth. This is one of those stocks that carries higher reward, but also high risk in terms of volatility. TRW Automotive s upplies automotive systems and components to OEMs and related aftermarkets. TRW had a rocky August like many stocks but appears to have consolidated at recent levels and may be poised for a strong run over the next 12 months. The auto industry is expected to sell a record number of cars in 2011 as the economy continues to recover and consumers replace older cars held longer than usual. TRW is attractive at a PE of 7.6 in light of sales growth reaching 19%. The company recently released second quarter earnings that far exceeded analyst estimates. We think earnings will continue to surprise and the stock could really take off. We also carried over a number of stocks from our watch list last week. EBIX (Software & Programming), Credit Acceptance Corp (CACC, Financial Services), Erie Insurance (ERIE, Insurance), MV Oil Trust (MVO, Misc Financial Services), Alliance Partners (ARLP, Coal), and PAR Pharmaceutical (PRX, Biotechnology & Drugs) remain excellent picks. We dropp ed Full House Resorts as the stock appears stuck in a trading range that has been established over the past few months. In addition, Full House recently released earnings that missed estimates, not a good practice for any company. We also dropped Buckeye Holdings which is in Oil Well Services. We still like the company and consider the stock attractive, but we just like MVO as a better alternative, another pick on our watch. Last week was a great week for stocks as the market moved sharply higher. However, we have been at these levels before, and we have yet to break through the current trading range. While we remain bullish long term, we could see a pullback over the near term and now may be a good time to buy some protection.

Get Daily Updates On Breakout Stocks From: http://www.marketbeatingstocks.com