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Wednesday, April 30, 2014

Apple Haircut - Finisar Success

This morning I had a nice chat with the gals who cut my hair. The older one was in disbelief that I'd own stocks at "such high prices." I reminded her that two years ago they all loved Apple and I warned them I liked other stocks like Finisar... that is now up a decent amount.

I came home, ate lunch and looked up when I wrote those Apple articles:
That was over two years ago!!! Time sure flies!!!!

So, I guess the good news for us longs is so many in the public get sucked into the hot stocks at the top just before they crash and it keeps them timid....

Right now we have the latest "hot stocks" that replaced Apple in the public's list of "must own stocks": FB, TWTR, Tesla, etc..... all having issues while the smart money owns the good stocks and collect dividends to spend and/or reinvest.

BTW, since I wrote the last article recommending Finisar at $17.50 over Apple at $633
  • Finisar is up 49% to $26.10
  • Apple is down 6% to $592
For more information, see:
Apple vs Finisar April 12, 2012 through today

Saturday, April 26, 2014

ECRI Weekly Leading Index WLI Lower but Growth is Up

The Economic Cycle Research Institute, ECRI -- a New York-based independent forecasting group, released its latest readings for its proprietary Weekly Leading Index (WLI) Friday.

For the week ending April 18, 2014:
  • WLI was 134.6 down slightly from the prior week's reading of 1134.9
  • WLI Growth was 4.1%, up from the prior week's reading of 3.9%.
Chart of WLI and WLI growth vs GDP Growth 
(click charts to expand)

Weekly ECRI Press Release Graph

 Weekly ECRI vs the S&P500 and GDP Growth
  1. Occasionally the WLI level and growth rate can move in different directions, because the latter is derived from a four-week moving average.
  2. ECRI uses the WLI level and WLI growth rate to HELP predict turns in the business cycle and growth rate cycle respectively. Those target cycles are not the same as GDP level or growth, but rather a set of coincident indicators (including production, employment income and sales) that make up the coincident index. Based on two additional decades of data not available to the general public, there are a couple of occasions (in 1951 and 1966) when WLI growth fell well below negative ten, but no recessions resulted (although there were clear growth slowdowns).
  3. For a better understanding of ECRI's indicators, read their book, "Beating the Business Cycle: How to Predict and Profit From Turning Points in the Economy
ECRI's Book

is Available on Kindle

Friday, April 25, 2014

Los Altos Home Prices Break Two Million Mark for a Modest Home

Located between Apple, Google, Facebook and Tesla and just a short drive to Stanford University, Los Altos is central to many of today's growing companies that turned founders and employees into recent millionaires.  With some of the top schools in the country, Los Altos is a prime target for young tech titans looking to diversify their stock holdings and settle down to raise a family or just live in a town with a low crime rate.

This house on 914 Mercedes Ave is a short walk to highly rated Santa Rita Elementary (942 API score) and Egan intermediate (984 API Score) schools.

Is this the top of another bubble or have towns with good schools and large lots in the Silicon Valley joined the ranks of world class locations like London, New York, Paris, etc. as places people want to live and those with money will keep the prices going up?

Wednesday, April 23, 2014

Ticker Sense Blogger Sentiment vs S&P500 Chart

This graph shows S&P500 vs Ticker Sense Blogger Sentiment as of 4/23/14.  

"Ticker Sense Blogger Sentiment" (details below) is short term market outlook for the next 30 days.

The apparent bottom of blogger sentiment matches the bottom of the recent pull-back in the S&P500.   As the chart shows, these bottoms over the past few years were followed by rallies that often went to new highs.

My newsletter "Explore Portfolio" made a new high yesterday as added I on the recent market pull-back and am now looking to take profits again.

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with "Kirk Lindstrom's Investment Letter"
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Testimonials Portfolio Returns)

Ticker Sense Blogger Sentiment Poll is a survey of the web's most prominent investment bloggers, asking "What is your outlook on the S&P 500 for the next 30 days?" Conducted on a weekly basis, the poll is sent to participants each Thursday, and the results are released on Ticker Sense each Monday. The goal of this poll is to gain a consensus view on the market from the top investment bloggers -- a community that continues to grow as a valued source of investment insight.

Monday, April 21, 2014

Gold Testing Support

Gold is testing support of a falling trend line from above.

Here is a larger chart showing the active trendlines. 

Disclosure: I have a small, personal position in GLD () for an attempt to profit from a counter trend rally.  I have a mental stop loss and will not post what it is or post when I take it...  I have not added this GLD trade to my newsletter explore portfolio as I am still experimenting with this idea.  Also, I have stocks I like with what I believe is far more upside in my explore portfolio  Also, I have larger personal positions in those "explore" stocks.

Tuesday, April 15, 2014

Ralph Acampora Market Warning

Today Ralph Acampora, the man who calls himself "The Godfather of Technical Analysis" on his Twitter feed, issued the following market warnings:

@Ralph_Acampora on April 15, 2014 early AM :
  1. At best, the market is now in a wide trading range; at worst, it is creating an intermediate term market top froth with failed rallies.
  2. Rally(s) from current levels will, at some point, encounter serious overhead supply.  That will be the moment of truth.
  3. April 14th witnessed a brisk over-sold rally. Further broad based upside follow through is needed to correct the recent technical damage.
Yesterday Ralph Acampora advised using rallies to lighten positions:
  1. Apr 14: Micro-Cap (IWC) broke a multi-year up trend last week. Use any rally(s) to lighten-up positions.
  2. Apr 14: S&P Retail (XRT) made a series of lower highs since Nov. 2013 and last week it broke below near-term support. Avoid.
  3. Apr 14: US Broker/Dealers (IAI) broke below its 2/4/14 low and a multi-year uptrend. This has intermediate-term negative implications.
And last week was more of the same after the DOW failed to confirm the bull market rally (via DOW Theory) with a new closing high.
  • Apr 12: The SOX Index made a lower low. Use any near-term rally(s) as an opportunity to lighten-up positions.
  • Apr 11: Many near-term support levels are breaking like 'egg shells'. Watch the Feb.5th lows; if broken it would be intermediate-term problematic.
  • Apr 10: The market suffered another failed rally this week. Unfortunately, this allowed the sellers another opportunity to liquidate.

  • Apr 5: New lower lows - now in 1 month down trends: NASDAQ Comp; QQQ and Micro-Cap (IWC).
  • Apr 5: Dow Theory: DJIA failed to re-confirm the new closing highs in the DJTA. Its secondary correction phase is still in force.
  • Apr 5: Ouch! The DJIA experienced another failed rally this week. Not a good sign. It is the only major index not to make a new 2014 closing high
  • Apr 3: S&P Sector: Technology (XLK) made a new high - much of this strength is due to older tech stocks like: MSFT, CSCO and INTC.
  • Apr 3: Wednesday the Dow Jones Industrial average closed 3.66 points away from its all time closing high of 16,576.66 made on 12/32/2013.
  • Apr 2: S&P Sector: Telecommunications (IYZ) leaped to a new high; it is now at its best reading since 1/08. This is the start of new leadership.
  • Apr 2: Dow Theory: When the DJ Industrial makes its new closing high, it will reconfirm the primary bull market.
  • Apr 2: Yesterday the DJ Transportation average made a new high; now, the DJ Industrial average is only 44.05 points from its closing high.

Learn the "Core and Explore" approach to investing
with "Kirk Lindstrom's Investment Letter"
Subscribe NOW and get the April 2014 Issue for FREE!   
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Wednesday, April 09, 2014

Market Update: The Growth to Value Rotation Continues

This chart shows well the rotation from "growth" stocks in the S&P500 into "Value" stocks.

The bottom chart shows a closeup for the past year.

Learn the "Core and Explore" approach to investing
with "Kirk Lindstrom's Investment Letter"

Subscribe NOW and get the April 2014 Issue for FREE!  
(Your 1 year, 12 issue subscription will start with next month's issue.)
(More Info, Testimonials & Portfolio Returns)

More Information:IVW = iShares S&P 500 Growth
IVE = iShares S&P 500 Value

Tuesday, April 01, 2014

49ers Trade Kaepernick for Sherman & Sign JaMarcus Russell to 5 Year Deal

In a shocking development to make room under the salary cap and receive maximum value for their  famously tattooed QB, the SF 49ers today traded much loved quarterback Colin Kaepernick for three first round draft picks and Richard Sherman from the Seahawks.  At the same time, the 49ers announced signing Jamarcus Russell to fill Kaepernick's shoes.

When asked about the QB switch, coach Harbaugh said the best way he can show he's worth $10M a year as head coach is to win with JaMarcus at the helm of his team.

Trent Baalke, General Manager of the San Francisco 49ers, said "everything you read on the internet on April first is true!"

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