Broad Market Drops 1.7% As Commodities Get Hammered!

The big story last week was Commodities which got hammered shedding 9% off of the CRB index. Crude tumbled 14%, but it was silver that took top honors plummeting 27%. The volatility and selling pressure in commodities brought down equities. No doubt in our minds that this was an over correction in the commodities sector. As is typical in the market, moves get over extended to the upside and downside and that is what happened with commodities. We fully expect commodities to bounce back and now is a great time to pick up energy stocks and other commodities including silver. The US economy is showing clear signs of strength, in fact the jobs reports last week were very encouraging. The global economic growth story also seems very much on track. Commodities and equities are poised to continue their bullish runs, so take advantage and buy assets that have experienced sharp pull backs. Earnings season is winding down, and it is clear that corporate profits are very strong, another sign of an economy very much on the mend. We like to sit mostly on the sidelines during the three heaviest weeks of quarterly earnings reporting, but now are ready to get more aggressive with market trading. We have significant cash levels in our options portfolio and growth portfolios to invest, and plan more stock rotation out of our retirement portfolio. The market could remain choppy through the summer months, but we think it is worth the risk to buy ahead of what we think will be a strong fourth quarter.

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

What Stock Tips do we have? Our complete list of stocks is available on our web site. We now have nine stocks on our watch list, all for purchase, in addition to the stocks we already own. Five of the nine stocks are carryovers from our prior week list, and all remain attractively priced after the recent market pullback. We added four new stocks including Synalloy (SYNL), Credit Acceptance Corp (CACC), Altera (ALTR), and Caterpillar (CAT). Synalloy operates in two segments, metals and specialty chemicals. SYNL is a smaller company and the stock is more thinly traded, but the company has been putting up very good growth numbers. CACC is a provider of auto loans to consumers and is experiencing loan growth and improving credit quality as the economy continues to rebound. Altera designs, manufactures, and market programmable logic devices and integrated circuits. Altera 1Q performance was outstanding with EPS increasing 46%, and the company revised their revenue forecast upward for 2Q. The semiconductor sector has been beaten up as of late, but Altera has weathered the storm better than most. Caterpillar (CAT) is a well known company engaged in the manufacture of construction and mining equipment. CAT is a quality company and really is a play on the growing global economy and increasing demands for infrastructure around the world. Long term we think this is a great stock, but would prefer to buy on a larger pullback. The stock lost 4% last week in the commodities selloff, another 4 or 5% decline would make the stock very attractive to us. In summary, we plan to get more aggressive buying stocks and options now that 1ST Quarter earnings season is winding down.

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Market Continues Recovery As Volatility Drops Sharply

An encouraging sign as the market posted strong gains for the week despite the negative news that dominated the headlines. Concerns in Japan, while still high, subsided as nuclear issues appear more under control. Tensions in the Middle East continue, but avoided the major escalations that would threaten market confidence here. All of our portfolios responded nicely, with weekly gains that exceeded the market rebound. Our options portfolio saw the biggest delta, rising more than 14%, an exceptional turnaround which gets us back to a YTD return of 8.6%. This portfolio is the most volatile due to the nature of shorter term option trades, but has also been the most rewarding. For the options portfolio, we use the same stock section strategy used for stock portfolios, but instead of buying the stock outright, place options trades where pricing is reasonable. The other big event this week was the sharp decline in volatility (VIX). Generally speaking options prices become cheaper when the VIX falls, and that makes this a good time to buy long positions, both calls and puts. We plan to increase our long option positions over the next week or two. In addition, when volatility falls, that makes buying protection more affordable, a strategy that can be put in place through buying puts or long put spreads. We like to use a proxy for the market index when buying protection, for instance put options against the SPY or SPX. Our timing was perfect when we sold our protection the prior week for big profits and we may consider buying the protection once again given the recent sharp drop in volatility. We did not execute any stock transactions last week, but are looking to buy a stock or two if the market can hold the current uptrend. We remain cautious over the near term, bullish long term and encourage aggressive buying when the market comes under selling pressure. As the market finds its footing and trends upward, we plan to become more aggressive rotating out of laggards and buying those with stocks that are outperforming the market.

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

What Stock Tips do we have? Our complete list of watch list stocks can be found on our website (see link below). We have seven stocks on our watch list for purchase, in addition to the stocks we already own. For this week, we are adding one new stock to our watch list, Impax Laboratories (IPXL). Impax is a specialty pharmaceutical company that is focused on development and commercialization generic pharmaceuticals, as well as branded products. The long term story of an aging population under the microscope of government cost controls should help the generic industry expand across all competitors. As for Impax, they have grown sales and earnings at triple digit growth rates, yet the PE remains very attractive for a company experiencing strong growth. The share price has outperformed the market over the past 3, 6, and 12 months. Most recently the stock has been consolidating over the past 10 days between $24 and $25 as stock accumulation continues to climb. We think now is an excellent time to buy and could see this stock moving up 30% over the remainder of this year. Overall, as we mentioned before, we are still cautious near term, but would view additional market declines as a great buying opportunity. Generally speaking, we are not selling this market, and given the performance last week, are seeing signs of a stabilizing market. We now plan to begin gradually putting our sideline cash back into the market.

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Volatile Week As Japan and Libya Drive Headlines!

It was a very volatile week of trading as the devastation in Japan and the turmoil in Libya remained front and center. The S&P lost 1.9% for the week, all in all a good recovery after having been down nearly 5% through Wednesday. For the year, the S&P is now up only 1.7% after several weeks of selling pressure, most recently driven by the headlines from Japan and Libya. The devastation from the earthquake and subsequent tsunami has been huge in Japan. Now the Japan crisis is centered on a potential nuclear meltdown that could further trouble this country and the world with longer term economic and energy impacts. The crisis in Libya is escalating as the UN enforces a no fly zone and bombs the country with missiles. Clearly the turmoil in the Middle East creates concern not just in that region, but all over the world. With so much bad news, it is a wonder the market did not fall further. We take some solace in the fact that the market held up fairly well all things con sidered. However, clearly there is significant risk that the market could falter given selling pressures from these external events. We remain bullish for the year, but cautious over the near term and suggest letting the market stabilize before getting aggressive and investing cash from the sidelines. We bought protection in February due to the heightened risks we saw at that time. We sold that protection for a profit this week which helps offset the overall losses we experienced in long positions that fell in sympathy with the market. The value of buying protection can best be seen in our Growth Portfolio where our YTD return has remained steady at February highs despite the sharp selloff in the market since. In fact, the NASDAQ index drop 2.71% for the week, while our Growth portfolio rose 1.5%, a positive delta over 4% in just 5 days. For protection, we bought the Mar 132 SPY Put and sold the Mar 128 SPY Put to reduce the cost of this protection. This protection w orked out perfectly as the SPY index dropped from 132 to 128 just as our position was about to expire. This example shows the value of buying protection, but remember, buy protection when you can at reasonable prices, not when you have to after market volatility explodes.

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

What Stock Tips do we have? Our complete list of watch list stocks is below along with our commentary. We have six stocks on our watch list for purchase, in addition to the stocks we already own. For this week, we are adding one new stock to our watch list, Leucadia National. Leucadia (LUK) is a diversified holding company engaged in a variety of business including manufacturing, oil and gas, gaming, real estate, and medical product development. What investors are really buying is a strong management team that knows how to invest and manage profitable enterprises. Price growth over the past 3 months has been 20% and the stock price has held up especially well over the past few weeks as the market has sold off. The PE registers at just 4.5, extremely low for a company that grew earnings and sales at 251% and 129% respectively over the past 12 months. We should note however that the earnings trend over a longer horizon has been volatile, but would add that the low PE wi ll provide the stock with some downside protection. As a testament to management effectiveness, Return on Equity has been outstanding at 33%! Overall, as we mentioned before, we are still cautious near term, but would view additional declines as a great buying opportunity. Generally speaking, we are not selling this market, but do plan to wait for the market to stabilize before investing all of the cash sitting on our sideline.

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

Market Ends Flat Under Weight Of Middle East Turmoil!

The market ended the week flat under the weight of ongoing turmoil in the Middle East. Libya remains front and center as the growing unrest becomes more violent. Oil prices moved higher as a result of that regional tension and fears over supply constraints. However, the US economy is the silver lining. Reports indicate money flows are showing a reversal from emerging markets which was king to US based investments. We have mentioned the importance of watching money flows in the past, and this is another bullish sign for the US stock market as increasing demand will driver prices higher. The other good news was unemployment, as private employers added more jobs than expected, helping to lower the overall unemployment rate. Economic indicators continue to support the premise that the US economy is slowly on the mend. Rising oil prices do put pressure on consumers, but we think a far greater rise is required before those effects dampen the economic recovery. As we said l ast week, we think the market could struggle over the near term with sideways trading or a small correction, but longer term we remain bullish for the rest of this year. Now is not the time to run to cash, but taking some profits is practical and smart. Reinvest your cash over time to let the market work through the current fears and establish support levels. We put some cash to work last week with the purchase of ConocoPhillips stock. Rising oil prices will juice performance for Conoco, but we think the stock can do well even if oil prices level off. The stock trades at a PE of just 10 which offers some downside protection, a great value in light of 30% sales growth over the past 12 months. Conoco is a quality company with an outstanding Return on Equity that is currently selling at a discount. We also took some profits last week after selling our positions in Amerisource Bergen (35% gain) and EBIX Systems (15.7% gain). We still like Amerisource as a long term play, but we only look to hold stocks for 1 year or less. The shorter holding period allows us to maximize portfolio returns by focusing only on those stocks that are showing the strongest momentum over 3 and 6 month periods. We had been looking to sell EBIX stock for some time and were happy to get out with a 15.7% gain. EBIX had been far more volatile than expected over our holding period and just not worth the additional risk.

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

What Stock Tips do we have? Our complete list of watch list stocks can be found on our website, see the link below. This week we are adding two new stocks, Novellus Systems (NVLS, Semiconductors) and Teradyne (TER, Semiconductors). Both are semiconductor stocks, so be careful with allocations to ensure proper diversification across your portfolio. We try to limit our industry exposure to 20% or less for the stocks we own across our portfolios. Teradyne is a supplier of automatic test equipment that supports the testing of complex electronics across the automotive, computing, telecommunications and defense industries. TER is up strong over the past three months, but has been consolidating the past two weeks as the overall market has struggled. The stock trades at a PE of 11, despite triple digit growth in sales and earnings. Industrial demand is picking up and that will translate into incremental demand for Terady ne products. Novellus develops and sells equipment used in the fabrication of integrated circuits. The semiconductor space is one of the fastest growing sectors right now and that bodes well for Novellus. The stock price has been on a steady upward trajectory and sports a PE of 15 with triple digit growth rates. There is more room to run on this one in light of what we see as steadily increasing industrial demand. We plan to look at options as another way to play our bullish outlook on Novellus. Overall, we are still cautious over the near term in terms of a correction, but would view that as a great buying opportunity if that unfolds. We do plan invest more of our cash in the coming weeks.

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

Middle East Turmoil Breaks Trend And Drives Market Lower!

The market reversed trend with a 1.7% weekly loss, the first in a month. Concerns over the Middle East turmoil took its toll as investors sold some profits and reduced risk. Egypt and now Libya have heightened concerns over Middle East stability and the obvious impact that could have on oil supply and prices. Energy companies have been the winners, while those companies heavily dependent on oil have suffered. It is interesting to note that Treasury prices rose significantly, clearly indicating a flight to safety amongst investors. The defensive posture that we now see is not surprising as we have been concerned over the possibility a small correction for a few weeks now. Volatility rose sharply, another sign of growing fear in the marketplace. The protection we purchased the prior week came just in time as those positions will help offset potential market losses. We think the market could struggle over the near term with sideways trading or a small correction, but lon ger term we remain bullish for the rest of this year. Now is not the time to run to cash, but taking some profits is practical and smart. Reinvest your cash over time to let the market work through the current fears and establish support levels. Last week we sold our Georesources stock for a 50% gain in just three short months. This oil and gas operator will likely move higher in coming weeks due to rising energy prices, but we wanted to take profits and avoid that urge to be greedy. We also recently purchased Raymond James and Corning, stocks that were added to our buy list the prior week. Both stocks lost ground as the market sold off, but we expect both to do very well over the coming six months. We plan to rotate out of a few more stocks over the next few weeks and will gradually reinvest our cash as the market stabilizes.

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

What Stock Tips do we have? Our complete list of watch list stocks can be found through the link below. We have seven stocks on our watch list for purchase. Six of the seven are returning stars from the prior week. This week we are adding ConocoPhillips which closed on Friday at $77.28. Conoco is a large international energy company that will benefit from rising energy prices. Oil has already risen significantly, so there is risk that prices could fall sharply when the Middle East crisis abates. Investors should be careful not to get overexposed to the energy sector. However, Conoco trades at a very reasonable multiple, a PE of just 10 despite sales growth of 30% over the past 12 months. Earnings growth has been even more eye popping at 158%. Earnings growth like that is not sustainable long term, but that risk is mitigated with such a compelling valuation. Conoco gives investors an opportunity to play the near term panic in the Middle East, as well as provide long t erm growth potential. We bought two stocks last week and plan to pick up the pace with our investment purchases as the market stabilizes. If we do get a correction, we will buy aggressively to position ourselves for the anticipated rebound over the remainder of the year.

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

Market Rises 1.4% As Mubarak Steps Down!

The market rose 1.4% in another positive showing bringing its YTD return to 5.7%. Egypt was again in the news as Mubarak bowed to pressure and finally stepped down. The quick changes that came about in Egypt may put additional pressures on other countries in the region. Those developments are probably good long term, but there is risk of greater instability over the short term. The market continues to shrug off these developments largely off the strength of corporate earnings and improving economic conditions. Earnings reports remain overwhelmling positive, although some big names have disappointed most notably Cisco last week. We also had good news over a better than expected weekly job claims report which suggests the employment picture is indeed improving. We like the strength we see in both the stock market and economy and remain long term bulls. However, as we said last week, we would not be surprised to see a minor correction of 5% or so. Volatility fell again to very low levels (15.7), and that along with falling short interest, suggest the market may move lower. When volatility and short interest are low, that means too many investors are bullish and perhaps even complacent, and that is when the market often corrects. We expect the market to move sideways or down over the near term which is why we are sitting on more cash in our portfolios. In addition, there is always more uncertainty and risk during the few weeks of each quarterly reporting season, another reason we like to go a little slower when buying stocks over this period. With volatility this low, now is a great time buy some protection using options against the VIX Index or the SPY ETF. We purchased a VIX call spread for protection last week and may try to create a hedge this week using the SPY ETF.

Broad Based Rally Pushes Market Up 4.2% YTD!

The market made most of its gain on Tuesday and held on through the rest of the week despite the turmoil in Egypt and growing Middle East concerns. Strong earnings reports have provided the market sustenance as the vast majority of reporting companies have exceeded both earnings and revenue expectations. Even retailers reported better-than-expected monthly sales in January supporting the notion that consumer spending is improving. Jobs growth also showed increases last week, but were below projections as hiring remains sticky. By most measures, the economy is showing improvement and moving in the right direction; although some sectors remain stubbornly slow to respond. The FED is providing an accommodative stance and we see no signs of that changing in the near future. The stock market advance since September has foreshadowed the improving economy. However, for perspective the broad market has risen sharply since September last year to now over 25%. That is a big move , and a minor correction would not be surprising. Many pundits are calling for a 5% correction, and that too seems reasonable to us as the market will not go up in a straight line. Volatility also fell sharply last week, perhaps a sign that investors are becoming more complacent as stocks move higher. We are sitting on some cash in our portfolios and plan to sit mostly on the sidelines again this week given the market uncertainty and are concern that a minor correction may be near. We may take some profits where we can and buy some protection given low volatility over the near term. However, this is certainly not a time to exit the market or sell stocks that you want to keep even under concerns of a looming correction. This is a longer term bull market and investors should be buying on pullbacks. We are just sitting on our cash a little longer and being slower to invest since we think there is a decent chance the market might correct in February.