Tag: street authority

How To Avoid The Mistake Most Investors Are Making

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By: Brad Briggs of Street Authority

It finally ended...

The Federal Reserve recently announced that it would end its third (and possibly final) round of quantitative easing (QE).

This brings to close the $1.7 trillion that was pumped into the economy in this round alone. October marked the last month of the $15 billion in monthly bond purchases -- down from $85 billion when QE3 started in 2012 -- and ends the nearly six-year bond purchasing program.

You can see what the program has done to the balance sheet of the Federal Reserve:

The central bank's bond purchasing program has sent the stock market soaring... and hopefully you've been able to capitalize on this tremendous bull market. Continue reading "How To Avoid The Mistake Most Investors Are Making" →

In The Week Ahead: This Stock's Breakout Signals More Gains Ahead in 2014

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By: John Kosar of Street Authority

All major U.S. stock indices finished in positive territory for the fourth consecutive week, led by the tech-heavy Nasdaq 100, which gained 1.6% and is now up 17.6% for the year. This index has been a major focus of mine since the Aug. 25 Market Outlook. Its move above major overhead resistance at 4,147 this month was an important catalyst for the recent strength in the broader market.

On a sector basis, technology, consumer discretionary and materials led. Utilities, energy and financials trailed the pack and finished the week in negative territory.

Cisco Systems Resuming 2011 Uptrend?

The recent strength and leadership shown by the technology sector resulted in a potential buying opportunity in Cisco Systems (NASDAQ: CSCO). I discussed the topic Wednesday on CNBC, just before the tech bellwether announced its fiscal first-quarter earnings.

CSCO, which is the 10th largest constituent stock comprising 3.3% of the technology sector index, broke out to the upside on Friday from 15 months of sideways action that indicated investor indecision.

CSCO Stock Market Outlook Chart

This breakout indicates that CSCO's larger August 2011 advance has resumed and targets a move to $32, 22% above Friday's close. This will remain valid as long as the upper boundary of the indecision area at $25.90 loosely contains prices on the downside as underlying support. Continue reading "In The Week Ahead: This Stock's Breakout Signals More Gains Ahead in 2014" →

How Midterm Elections Could Lead To 17.5% Returns In Less Than A Year

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By: Christian Hudspeth of Street Authority

The most recent election was a good night for Republicans, but possibly even better for investors.

That's not necessarily because Republican wins lead to better stock returns, but because historically the market performs better in the year following midterm elections.

In fact, there's a 66% chance that the market will post positive gains for 2014, according to research by StockTradersAlmanac.com.

Looking at stock market movements from every midterm election from 1970 to 2010, their research found that 66% of the time the stock market ended higher from election day to year's end.

And for all midterms since 1970, the stock market gained an average of 2.1% from election day to the end of year. You can see for yourself in the table below:

If a 2.1% gain possibility over the next two months doesn't sound groundbreaking, then this might.

Holding stocks for a full year after a midterm has historically been very profitable, according to research by Chief Equity Strategist Sam Stovall of SP Capital IQ. Continue reading "How Midterm Elections Could Lead To 17.5% Returns In Less Than A Year" →

In the Week Ahead: Is A Market Bottom Finally In Place?

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By: John Kosar of Street Authority

All major U.S. stock indices finished in positive territory last week, for only the second time since Aug. 29, led by the Russell 2000, which gained 4.9%. This is good news for the market as small-cap stocks have lagged in a big way all year. The Russell 2000 is up just 0.9% year to date compared with 15.8% for the tech-heavy Nasdaq 100 and 9.2% for the broad market SP 500.

Another good sign is that, despite the Federal Open Market Committee (FOMC) announcing the end of its bond-buying program on Wednesday, the SP 500 rose by an additional 1.7% into Friday's close. This suggests that, despite a lot of investor apprehension beforehand, the market ultimately interpreted the Federal Reserve's action as evidence that it believes the U.S. economy is finally strong enough to stand on its own two feet.

From a sector standpoint, last week's rally was led by technology, up 3.3%, and financials, up 3.2%. This is another good sign for the overall market between now and year end as these sectors typically outperform amid expectations for a strengthening U.S. economy.

Technology Stocks at a Key Inflection Point

In the Aug. 25 Market Outlook, I discussed an important overhead resistance level at 4,147 in the Nasdaq 100. I said, "Major benchmark highs like this one are seldom meaningfully and sustainably broken without at least a multi-week corrective decline first."

The index peaked three and a half weeks later, at 4,119 on Sept. 19, and then subsequently declined by 10.2% into the Oct. 15 low. The SP 500 declined by 9.8% during the same period.

The Nasdaq 100 managed to edge slightly above 4,147 last week, which represents the September 2000 benchmark high, closing at 4,158 on Friday.

The more time this market-leading index spends above 4,147, the more likely that a major breakout is emerging that would clear the way for a continued rise into year end.

Investors Breathing a Sigh of Relief Continue reading "In the Week Ahead: Is A Market Bottom Finally In Place?" →

Oil Prices Are At Two-Year Lows - Should You Buy Now?

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By: Eric Winter of Street Authority

Stock exchanges are not alone in seeing prices pull back lately. In at least one case, however, that is actually a good thing.

Drivers both state-side and abroad have no doubt felt the pain at the pump subsiding this fall. In the United States, many gas stations are now hawking unleaded for under $3.00 a gallon -- a welcome sight in my eyes, at least.

Those lower prices have come at a cost to some portfolios, however.

Oil prices have been steadily declining since making highs in June, falling from north of $104 to around $81 at the time this article was written. Considering that nearly every industry is affected by oil in some way, this means there’s a good chance some of your holdings have fallen in tandem.

Naturally, oil explorers, producers, and those along the supply chain have been hit the hardest. Exxon Mobil Corp. (NYSE: XOM), the world’s largest oil company by revenue, has fallen 11% since July. In contrast, the SP 500 is only down 2.6% in the same time period. Continue reading "Oil Prices Are At Two-Year Lows - Should You Buy Now?" →