Good morning Traders,
 
As promised, this morning we are releasing David Cohne’s Value Momentum Profit’s Hot
Stock of the week.  But before I do, let’s take a look at stock market sentiment.
 
As you recall in our last update, we were showing how rapidly traders were positioning for a move lower in the market, noting how bullish
that can be for the market on a contrarian basis.  But today, let’s take a look at the big picture.
 
Click here to access all our charts
 
One thing we like to prove with our research is that sentiment is sentiment.  No matter how you slice it, we can take entirely
different data series and show correlations.  Now these two are easy because they’re measuring similar things – with II measuring newsletter writers
(like us) and AAII measuring individual investors, like you.  But at the end of the day, we are all human and have emotions and those emotions lead to
our opinions and help cause market movements.
 
So based on this indicator, we are forming a lower high, which can be a sign of a top forming in the markets.  That being said,
there will be opportunities to profit periodically.  And here’s one.
 
Again, as promised, here is David Cohne’s Hot Stock Of The Week:
 
Click here to subscribe
 
AMCF is on the verge of a break out – you can see traders positioning ahead of the action and a break above the 2.2 level should send
this stock off to the races.  There are two ways to play stocks like this.  First is a break out – where you use a buy stop market order
above resistance to automatically place you in the trade when it does break.  Or if you are the investor type, you can start to position in it over
time, and be in it before it breaks.  Either way, this stock looks ready to break and David’s readers are on board. 
 
To view David’s current portfolio, you can subscribe for 4 weeks for only $1 – just use Discount Code VMP1 when you sign
up. 
 
 
Again – don’t forget to use DISCOUNT CODE VMP1 when signing up.
 
Regards,
 
Carl Adams, Publisher
 
PS – We are still giving out our 52 page presentation detailing the potential bubble forming in the stock market right
now.  Your subscription also includes a subscription to all our market timing research charts like the one shown today.  CLICK HERE TO SIGN UP  and don’t forget to USE DISCOUNT CODE VMP1
when signing up.

Last Week Returned 4%
3/2/2014 3:52:52 PM

Hello Traders,

Happy Sunday. I hope had a great weekend. Our portfolio returned 4% last week while the S&P 500 returned 1.3%. There is one trade this week. We are selling out of Orient Paper (ONP) and buying Newtek Business Services Inc (NEWT).

Reminder On How To Use The System:

1 Buy 5 positions on Monday’s Open.

2 Hold them through the weekend.

3 We have applied a money management system to the portfolio to prevent large losses using stops, so wait for the weekend email before doing anything.

4 Once the new email comes, make the necessary trades.

This system is an easy to follow stock portfolio plan. It was built for large gains and limited losses using a money management overlay.

Here are the Stocks for the week March 3rd-March 7th

**To see this week’s portfolio – click here  

Our Hot Pick for this week is (HIHO) Highway Holdings. The company is based out of Sheung Shui, China. The company manufactures & sells industrial goods such as metal, plastic and electrical components. Its most recent year over year quarterly earnings growth was an astounding 727.8% as it bounced back from a weaker year. It has a 14.6 trailing P/E with a 0.46 Price/Sales and 0.86 Price/Book ratios.

The company has been on an long term uptrend over the past year with occasional ups & downs providing some nice profit opportunities. It has been above its 200 Day Moving Average since late July and most recently dipped below its 50 Day Moving Average which presents a nice buying opportunity.

Happy Trading,

David Cohne

On day’s like today, I’m always reminded of my days as the Samurai Stock Trader, where I utilized Japanese Candlestick Patterns to trade a portfolio of stocks for subscribers.

What happened today that’s so critical?  First, we were in an uptrend.  Second, we started the day with a gap lower.  Third, we closed the day higher than the previous day’s trade.  That’s a classic “Last Engulfing” Japanese Candlestick Pattern. 

Last Engulfing

Here’s what that looks like:

Last Engulfing

The great thing about Japanese Candlesticks is that it shows you the emotion of the market through the additional dimension of color.  Granted, the above chart is black and white, but most charting systems will utilize white candles for up days and red candles for down days.  In the Yin and Yang that encompasses candlesticks – you can get a good feel when you see a sea of red candles.

You see, the market is made up of bulls and bears.  Note that this can be the same person and most often is as professional traders don’t care which way the market goes – they just care that 1) it goes and 2) it goes in the direction they predict.

So the set up of a Last Engulfing is a great example of the emotions that traders go through.  The market is advancing – so the bulls are confident.  The market gaps lower, so the bears are all excited, and position short to trade the downside.  The bulls are cautious of a turn lower.  Then the Market reverses sharply at the open and trades higher.  So there’s a little in it for both the bulls and bears. 

What’s it mean for tomorrow?  The day following this pattern (and most any Japanese Candlestick Pattern) is key.  You’ll want to see follow through.  The follow through in this case would be to the downside to support that it in fact is a BEARISH candlesticks pattern. 

Let me say that again – the Last Engulfing – as shown in the above image – is a BEARISH pattern and suggests downside ahead. 

That being said, not all predicted market action from candlesticks comes to fruition.  If they did, we’d all be millionaires.  That’s where money management comes in handy.  Statistically speaking, if the market is random, and you make 5 trades, generally 2 will go up, 2 will go down and 1 will go no where.  So a stop order on your trade (in this case you’d place the stop above the top of the pattern) will ensure you’re positioned to profit and protected (somewhat) from the trade going against you.

For more advice like this, feel free to visit www.stockbarometer.com and subscribe to one of our newsletters.

When short interest builds in a stock, it means traders are bearish. If it grows too fast, then too many traders are bearish. Throw in a little relative strength, and stocks can RUN to the upside. Every month gives us a new list of short squeeze candidates. Here are the top options for June on the Nasdaq and NYSE:

Nasaq top short squeeze potential picks

Here are the NYSE Candidates:

Nyse Short Squeeze Candidates

Interested in any of our services, please visit www.stockbarometer.com

Regards,

Stock Barometer

Here’s the chart of USO, an oil ETF that moves close to the price of oil.  It’s not suggested for a long term investment due to issues with contango and how the ETF is structured.  But for a short term hedge against increased oil and gas costs, you can purchase it to help offset those costs.  The charts big, just click on it to see the larger version.  Let me know if that doesn’t work.

The way to figure out how much to buy, is to guess at what your increased cost will be.  I can’t do that calculation for you, since you only know how much you drive and how much gas you use.  For simplicity sake, say it’s $1000.  Then look at the price of USO.  To off set a $1000 increase in your gas costs, you have to make some assumptions.  If oil goes through the roof here, back up to 150/barrel, the ETF will shoot up.    Oil closed Thursday at 112.  So from 112 to 150 is a 34% gain.  With USO at 45ish, that same gain suggests it can go up to 60.  For a profit of 15/share.  $1000/15 = 67 shares.

But don’t forget, there’s a downside to hedging.  If oil crashes, you will lose money on the investment.

67 shares at $45 is only $3000.  To invest less than that, you can buy UCO, which moves at 2x the rate of movement in USO.  So you can hedge the same amount with less initial outlay.

The monthly/weekly/daily chart is below.  Let me know if you have any questions.  If I made any mistakes in the math above, let me know.  It’s early and I ran through it very quickly.

USO CHART

Regards,

Stock Barometer

The answer is a simple yes, CSCO is a buy.  But not just yet.

What’s happened with CSCO is that there has been so much negative news, that the short interest grew faster than almost any other stock in the market.  That actually makes a stock ready to rise.

I won’t get into the mechanics, but simply put – when a stock with high short interest rallies, the shorts must cover, which creates more buying.  This in turn results in higher stock prices.

But…   The stock market is going through a correction right now.  So regardless of the short interest, 8 out of 10 stocks will be heading lower.

So what’s a trader to do?  Let CSCO bottom, let the correction play out – and buy CSCO on a break of a technical resistance level – and set your stop about 8% below that.

If you want our free newsletter, feel free to click here.

 

Good Friday morning traders,

As the government prepares to shut down, oil and gold continue to rise, and the earth continues to shake, I thought I’d talk a little about the big picture.

For those of you who don’t know much about me, I am a professional trader and obviously own this financial advisory service.  But what most don’t know is my back ground.  I left a 22 year corporate career in finance with the longer term goal of eventually starting my own hedge fund.

It’s a long process and there is much to be learned.  So as I continue with that process, I came across an individual that I found very interesting.  His name is John Thomas.  And honestly, I never heard of him before.  Well, until now.  He’s considered the founding father of international hedge fund trading and has advised some pretty impressive people over the years.

Here is a link to a video where he talks about hedge funds and how they approach certain issues.  You can even gain access to his advice if you want.  It’s worth a listen.  In fact, it’s worth it to listen to it several times for educational purposes alone.  I have and that’s why I am recommending it to you.

Click here to watch the video.

Enjoy your weekend.

Regards,

Stock Barometer

TSLA Chart is very bullish here.  Upside target 35 and a break of that, it could easily double.  With higher oil prices, electric cars will continue to gain traction.  This is the best play in the arena.

ENDP is a take out – with upside pricing around 51 and if it gets taken out, I’d guess around the 70’s.  And the later they take to buy them out, the more they’ll have to pay.  So we’ll see.

That being said, the rally is getting extended.  A sell off is likely within a week.

click stock market timing to learn more.

 

The TSLA squeeze may be on!!!

Price Target 70!

ENDP – A stock we’ve been recommending in our ESA Service – has broken out and continues to run.  Upside target 51!

Click here to learn more