Alex Daley: Happy New Year, my fellow technophiles. I hope you had a wonderful holiday, and that the worst January start to the market in many long years hasn’t put too much of a damper on it. But in all honesty, we’ve been expecting this kind of negativity for a little while. With the split between small- and large-cap stocks in the US continuing right through Read more…
Michael Snyder: Retail sales during the four day Thanksgiving weekend were down a whopping 11 percent from last year. This is a “make or break” time of the year for many retailers, and if things don’t turn around during the coming weeks we could see a tsunami of store closings in January and February. As you read this article, there is already more than a billion Read more…
Steve Watson: Amazon drones are back in the news following the emergence of an ad by the company seeking flight operators with military experience.
While Amazon continues to test drones in the US, it seems that the company is moving further forward with its “Prime Air” delivery scheme in the UK. Read more…
originally posted at MinyanvilleÂ
Amazon says it is selling more e-books for its Kindle electronic reading device than paperback and hardback editions combined.
So it should come as no great surprise to investors that Amazon.com (AMZN) is at the forefront of the trend toward e-books. The company began as an online seller of printed books in 1995 and launched the Kindle e-reader in November 2007.
Amazon said it is selling more e-books for its Kindle electronic reading device than paperback and hardback print editions combined. It now sells 105 electronic books for every 100 printed ones. Amazon’s founder and CEO Jeff Bezos commented, â€œWe had high hopes that this would happen eventually, but we never imagined it would happen this quickly.â€
This is a trend which has been in place for roughly the last year now. Sales of e-books surpassed hardcover titles in July 2010 and overtook paperbacks six months later. And now its bested both categories combined!
A real positive is the fact that Amazon stated that this trend helped its book business do its strongest growth in more than a decade.
Amazon only released unit sales data rather than comparable revenue figures, and Kindle editions typically sell for lower prices than print titles.
However, the data did suggest that Amazon might be extending its leading market share in e-books. This follows the release six weeks ago of a cut-price Kindle at $114 for US customers willing to accept sponsored screen savers and other advertising.
Publishers, who gathered this week at the annual Book Expo America in New York, think that this trend toward e-books will continue. They believe Amazon and other e-book sellers are likely to benefit from the trouble afflicting Borders and other brick-and-mortar book sellers. Borders filed for Chapter 11 bankruptcy protection in February.
If you decide to make an investment in Amazon, be sure you have sufficiently evaluated the risk for your investment. Even though Amazon looks to be in a solid growth trend with its e-books business, it’s important to maintain an intelligent risk strategy to earn higher returns.
Buy and protect — itâ€™s the smart way of investing.
Read more here:
Amazon in Solid Growth Trend With E-Book Business
HERE IS YOUR FOOTER
BigÂ news out of SeagateÂ in announcing today theÂ Â first mobile wireless storage device for iOS devices (iPhones, iPads, and iPod Touches,(AAPL). Nothing like joining the Smartphone revolution!
“With the growth of the tablet and iPad markets and the larger volumes of high-quality media now being consumed, there is a clear need for access to content that is not plagued with the challenges of streamed video over the Internet,” said Patrick Connolly, vice president and general manager of Seagate’s retail group. “The unfortunate fact is that these popular new mobile devices are hampered by their limited storage capacity while one of their primary functions is that of media consumption”.
(so: Â http://www.seagate.com/ww/v/index.jsp?locale=en-US&name=goflex-satellite-mobile-wireless-seagate-pr&vgnextoid=0deea262bf5ef210VgnVCM1000001a48090aRCRDÂ )
TheÂ GoFlex mobile wireless storage device is a battery-powered external hard drive that can wirelessly extend the storage capacity of any Wi-Fi-enabled device.The device can store 500 gigabytes of data and extend a deviceâ€™s storage via 802.11 b/g/n wireless networking. It has enough storage capacity to back up the entire library of video, music, pictures and documents that most people have on their mobile devices. The devices can connect directly to the GoFlex Satellite drive via a free GoFlex Media app now available on iTunes and the Apple app store. GoFlex Satellite is available at online retailers such as Seagate.com, Amazon and BestBuy.com for $199. With an battery life of 5 hoursand stand-by life of 25, plus a rechargeable battery, you have plenty of time to backup that new music you just downloaded.
Having bottomed out at the $12 range, and now trading in the $16 range, now might be the time to enter.Â If you do, remember though to have your riskÂ protection strategy ready, whether for exiting or hedging. SmartStops shows today’s risk alert price points at $16.31 for short-term investors and $14.71 for longer-term investors.
Read more here:
Seagate jumps into iPhone, Pad, iPod business of Apple
HERE IS YOUR FOOTER
Â by Raghu Gullapani,Â SmartStops.net contributing editor
AAPL GOOGÂ IBMÂ AMZNÂ
Over eight months the market has steadily climbed up. This climb has been led by the technology sector. Four explosive companies have led the charge.
Apple (AAPL) has led the charge but of late, the charge has stalled. This slowdown in forward momentum is reminiscent of price action last summer. From a technical perspective, the stock has been forming a bull flag and has been holding above its 55 & 210 ema. I would be hesitant to invest more than a feeler at this point until it more clearly resolves to the upside and starts to break above resistance at $360.Â Â SmartStops.net indicates the short-term stop is $341.06 and the long-term stop is $339.49
Google (GOOG) has been the laggard in this group for some time now. Lower than expected earnings and the marketâ€™s disdain for new CEO Larry Page have led it down. And while it may be tempting to buy on recent news, the technicals donâ€™t bear it out. The stock is trailing the 55 and 210 ema.Â Â Smartstop.net projects the short-term stop is $527.77 and the long-term stop is $525.04
IBM (IBM) has shown relative strength, leading the 55 and 210 ema. After a brief pullback the stock looks like it may make new highs.Â Â Smartstops.netÂ has the short-term stop at $165.73 and the long-term stop at $158.75
Amazon (AMZN) has been the recent leader in this group after nearly bouncing off it 210 ema. The stock is showing a lot of relative strength and looks to continue to make new highs. Smartstops.net has the short-term stop at $187.85 and the long-term stop at 168.24
The four horsemen were leading indicators of doom.Â Â Keep an eye on leaders to protect yourself from volatile markets.Â Market leaders are known to drop 72% from their peak per Investor’s Business Daily.
Read more here:
The Four Horsemen of the Tech Market
HERE IS YOUR FOOTER
Precisely two weeks from today, on May 16, 2011, the U.S. government will exhaust its power to borrow money.
That’s the official estimate of when the U.S. Treasury bumps up into its debt ceiling … runs out of funds … and is forbidden by law to borrow a penny more.
But in the murky world of government financing, official deadlines are one thing; the real, drop-dead deadlines are another.
The reason: To postpone that day of reckoning, Secretary Geithner can shuffle some funds around, put a few creditors on hold temporarily, and keep the government running for a few more weeks — until July 8.
Then, after that date, says Geithner, it would be curtains: The U.S. would default on its maturing debts.
This Is Beyond Crazy!
Yes, we know. It’s nearly all political posturing.
But if Democrats and Republicans want to play a game of chicken on the edge of a cliff — or Russian roulette with live bullets — they should at least do it with their own money and their own financial hides at stake. Not ours!
What irks us even more, however, is their hidden agenda —
- to do everything in their power to gut the dollar …
- so they can pay back creditors with cheaper money, and …
- keep the party going regardless of some very nasty consequences!
Look. Those consequences are not some distant cloud on the far horizon. They are striking right now! Indeed …
After barely escaping a monstrous deflationary quake just two years ago, the United States has now swung 180 degrees in the opposite direction … and is about to be swept up into an inflation tornado.
Already, the U.S. dollar is collapsing, within a hair of its lowest lows of all time. And already, gold has flown past the $1,500-per-ounce level, propelled by spreading fear of paper money. But if you think that’s dramatic, consider this shocking comparison:
- In 1980, inflation soared to 13.5 percent. But the fiscal challenges back then were miniscule compared to todays.
- In 1980, the deficit equaled 2.7 percent of this country’s gross domestic product. Today’s annual deficits have been hovering near 10 percent of GDP — more than three times more.
- Also in 1980, the total national debt was a mere $900 billion. Now it’s over $14 trillion, 15 times greater!
- The 1980 deficit was only $73.8 billion. Today, it’s $1.6 trillion, nearly 22 times more.
Moreover, compared to 1980, our reliance on foreign investors for deficit financing has nearly tripled … our money-printing presses are out of control … and our influence over foreign governments — whom we’re counting on to accept our debts — is a shadow of its former self.
It’s nearly a perfect recipe for another dollar collapse and, closely on its heels, rip-roaring inflation.
Why Is It That Many Fellow
Americans Still Don’t Get It?
Maybe it’s because they haven’t lived in a country where the currency was chronically ill. I have.
Over a half century ago, my father decided he wanted to buy a second home in the tropics. He dreamed of going there to escape Wall Street winters, write quietly, and contemplate the world economy from afar.
Finally, in 1952, after three years of searching — in Costa Rica, Colombia, and Cuba — he found his dream retreat, thousands of miles to the south, in the central highlands of Brazil.
Its name was Tr
Wow – what a turn-around intraday in gold prices!Â Buyers who purchased gold or the GLD ETF on the breakout to new highs in the morning session were cursed with a mid-day reversal that triggered a Bull Trap that created an ominous looking Bearish Engulfing Candle on the daily chart.
Let’s take a moment to look at the daily chart then step inside today’s intraday action to see what went wrong and learn a lesson in protection when the obvious play becomes a vicious trap.
First, the bigger picture from the Daily Chart:
First of all, I’m showing GLD – the popular GLD ETF on the daily structure.
I’ve mentioned this in weekly reports and I believe in a blog post, but the recent action in gold has concerned me – namely that gold pushed up to a new lifetime breakout high in early March but failed to sustain it.
This kind of behavior is a non-confirmation by price action and is inherently a caution/warning signal.Â We typically expect new breakout highs to be met with a rush of buyers which are joined with a frantic rush of short-sellers being forced to buy to cover their losses as price breaks through their protective stop-loss levels.
A breakout that fails to trigger an immediate feedback loop of upside action is suspect and must be monitored very closely.Â Gold seems to be displaying this non-confirm or “unexpected” breakout failure action at the moment and must therefore be watched objectively and closely.
No, it’s not true that every single bearish engulfing candle results in a trend reversal, but while price remains under the candle formation at the $139 to $141 level, then gold is in potential danger of a steeper pullback.
A firm breakout – accompanied with higher volume and momentum – negates these signals and puts them behind us, but while they exist, you’ll need to watch your open positions much more closely than otherwise.
Here, let’s step inside the hourly chart to see the progression up and today’s stunning reversal:
Here’s the recent ‘failure’ breakout to new highs in early March which eventually built-up to today’s failure breakout and reversal.
Always pay attention to price relative to momentum and volume – on guard for confirmations (higher price, volume spike/rise, momentum spike/high) or non-confirmations (divergences in volume or momentum with price highs).
Though the first push-up on March 2nd was met with confirming spikes in momentum and volume, the second push on March 7th was NOT.Â The divergences hinted at a reversal lower (short-term) and that’s what happened – as price fell along with stocks during the Japan situation to the $135.50 level (from $141).
The recent push-up initially was met with higher volume spikes and higher momentum, but the recent ’second pushes’ on March 23rd and 24th (today) were NOT met with higher momentum – the negative divergence is clear.
That was the structure going into today’s high – that of a weakening of momentum and failure to sustain above the “Resistance Band” I drew from $140 to $140.50.
A breakthrough to new highs WITHOUT a confirmation from volume and momentum is like a handful of troops breaking free from the ranks as they charge ahead into battle, only to look back to see no other soldiers are charging with them.Â The result is that the eager troops must then fall-back to the safety of the other troops.
Similar things tend to happen in the markets.
Let’s drop down to the 15-min chart to see that momentum was even worse on the lower timeframes:
The 3/10 Momentum Oscillator peaked on March 18th on the gap/surge to the upside.Â From there, price pushed to three additional highs but each time, the oscillator registered a slightly lower high.
I discuss momentum principles – both leading to the upside and forecasting reversals via divergences – in Chapter 3 of the new Trading Course book (which you may actually be able to read a portion online via Amazon).
Anyway, momentum tends to lead price, and you want to see momentum and price surging to new highs together to have confidence in a successful (high probability) buy trade (of course, relative to your timeframe/holding period).
We did initially have volume spike-up in confirmation on the 23rd and today but today, volume steadily and clearly trailed lower each 15-min period until price reversed.
So how do you protect yourself if you bought a breakout this morning?
First, don’t let your greed/emotion blind you from new price developments.
Watch for our old villains “Ownership Bias” and “Confirmation Bias” to sneak up on you – with these, we tend to ignore conflicting evidence to our position (long).Â Thus, we might ignore the previous divergences and then ignore the later price breakdowns through rising trendlines and rising moving averages on multiple intraday timeframes.
Namely, price shattered the rising intraday trendline that also happened to be the rising 20 period EMA on the 15-min chart at $140.75.Â Fifteen minutes later, price deeply sliced under the 50p EMA at $140.25 then under the key $140 level.Â That should NOT happen if you expect a big impulse breakout to happen.
Also, putting moving averages aside, price shattered under the prior support-level price low at the $140.25 region (from Wednesday).
Price also then sharply broke under the rising 20 EMA on the hourly chart – something also that should NOT happen.
The safety/protection play was to exit on the ‘unexpected’ breakdown under the $140 level – it’s that kind of action that triggers “popped stops,” which create big moves as a result of one side of the market rushing for the exits at the same time.
If you hold and hope during a collapse-down or change in chart psychology, you expose yourself to the potential for a serious and sudden loss.
That’s the main logic of protective stops – place stops under logical price levels (namely confluence support levels) under which price should NOT move.Â In the event price DOES move under those levels, take your exit gracefully and painlessly as possible.
I’m reminded of one of my favorite axioms of trading wisdom that I frequently share in the daily reports:
“If something SHOULD happen but does NOT, then it often leads to a LARGER than expected move in the OPPOSITE direction.”
Namely because one side of the market is now being unfortunately squeezed out of their positions as the other side capitalizes on this situation, thus creating a temporary but sometimes violent/powerful feedback loop of perpetual motion that cripples those who fight the move in motion.
I’ll leave it at that – trade as normal but always be on guard for surprise actions and know levels ahead of your entry where you will exit.
Today’s action makes gold very suspect – it’ll need to push on to new highs very soon, else it may be in trouble to retest lower support levels soon.Â Watch very attentively as the next few days progress.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter:Â http://twitter.com/afraidtotrade
Coreyâ€™s new book The Complete Trading Course (Wiley Finance) is now available!
Read more here:
Stepping Inside the Bearish Engulfing Bull Trap in Gold GLD