Buy the Chinese Chicken Dealer (YUM, INTC, MSFT, QQQ, XHB, IBB)

We’ve got a great deal to report this week, so buckle up and get ready to roll. We’ll start with a trade that we’re not so pleased with. It was set on June 16th in a letter called Homage to the Aged, a letter that attempted to convince you that the old-line tech stocks were where it’s at, and that concentrating on these issues over the short term would pay off handsomely. And as it turns out, we were right – even though the trade didn’t work out. As fellow Normandy analyst Matt McAbby pointed out last Thursday, it’s the big names that have thrived on the NASDAQ Composite, while the greater number of her components have actually declined. Look here – [care of Bourbon & Bayonets] Whereas companies like Cisco (NASDAQ:CSCO), Intel (NASDAQ:INTC), Microsoft (NASDAQ:MSFT) and Oracle (NASDAQ:ORCL) have all risen nicely from the time of our call, a full 47% of the index’s remaining components didn’t. They’re all at least 20% below their mid-summer highs, as the chart shows, putting them on a level that, per definition, defines them as being in the grip of the bear. But all that notwithstanding, we played a pairs trade on this…

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Finding Value in Protective Gear with Alpha Pro Tec, Ltd. (APT)

Some stocks go up in price based on fundamentals. Others rise due to momentum-based enthusiasm. In the case of the issue I want to bring your attention to today, both factors have been in play recently, and may continue to attract buyers. Its name is Alpha Pro Tech, Ltd. (APT) — a “bread and butter” company that is steadily growing its top and bottom line — with several catalysts in play that may provide some nice trading gains in the weeks ahead Alpha Pro Tech, Ltd. develops, manufactures and markets innovative disposable and limited-use protective apparel products for the industrial, clean room, medical and dental markets. The company’s Alpha ProTech Engineered Products division also manufactures and markets a line of construction weatherization products, including building wrap and roof underlayment. In August Alpha Pro Tech reported Q2 results, and they were quite good. Year-over-year for the period, revenues rose almost 10% to $12.3 million, up from $11.2 million in 2013. Net income increased 88.8% to $895,000 for the quarter ended June 30, 2014, compared to $474,000 for the quarter ended June 30, 2013. Basic and diluted earnings per common share for the quarters ended June 30, 2014 and 2013 were $0.05…

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Short Term/Long Term on Europe (EWG, USO, UNG, GLD)

Sometimes we put on a trade that takes us months, if not a year or more to cash in on. And sometimes it happens immediately. We usually aim to be open and shut anywhere between one to three months from initiating, but as with life itself, there are always surprises. And so it is this week, as we plan to cash in on two trades that we initiated in just the last fortnight. Or, to be more precise, one and a half trades. Great hair. Let us explain. Trade #1 Two weeks ago in a letter called Strangling the Energy Market we urged you to sell strangles on both the United States Oil Fund ETF (NYSE:USO) and the United States Natural Gas Fund ETF (NYSE:UNG). We felt both stocks were due for a brief slide sideways and that the premium collected on the trade would be ours after a relatively short duration. And what happened? We saw both commodities drop immediately – and more than we anticipated. And that means that the short CALLs on both trades have lost a tremendous amount of value. Numbers, Huey! Give us the Numbers! You’re so crass. Here they are. We sold the October…

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TransFat Profits (MCD, XLU, GLD, FXI)

Wanted to make a quick update of two separate markets before we moved on to this week’s analysis and trade recommendations. We’ll start with the Chinese market. Stocks in Shanghai have moved into a bullish technical posture the likes of which we haven’t seen since the spring of 2008. It’s early going yet, so things could reverse in a jif, but we’ve a hunch that stocks in that bastion of commie central planning are about to lift off. And that’s certainly good news for us freedom-loving angels here in the good old U.S. of A. Here’s a chart of Chinese market proxy iShares China Large-Cap ETF (NYSE:FXI) for the last six-months. Pay close attention to the moving average configuration on the far right. The move from $32 to $42 over the last half year was in itself monumental, and the trend channel that defines the rise shows that price is currently sitting directly in the middle of that track – neither too hot nor too cold (in red, far right). Indeed, the latest RSI and MACD reads (in black) offer the same assessment, which is, that today we have no worries about an ‘overbought’ market situation in Shanghai. But where…

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Pumping Up Profits with InfuSystem Holdings, Inc. (INFU)

With so many momentum stocks ripping up to massive, though usually short-lived gains recently, it’s easy to overlook some bread and butter issues that are breaking through to new 52-week tops purely on fundamentals. One of those is InfuSystem Holdings, Inc. (INFU), which finally penetrated resistance at the $3 mark on Wednesday, and appears poised to grind higher into potential breakout territory. Founded in 2005, InfuSystem Holdings, Inc., through its subsidiaries, provides infusion pumps and related services in the United States and Canada. The company supplies electronic ambulatory infusion pumps and associated disposable kits to oncology clinics, infusion clinics, and hospital outpatient chemotherapy clinics for the treatment of various cancers, including colorectal cancer. It also sells, rents, and leases new and pre-owned pole mounted and ambulatory infusion pumps and provides biomedical certification, maintenance, and repair services for oncology practices, and others. In addition, the company sells various primary and secondary tubing, cassettes, catheters, and other disposable items that are utilized with infusion pumps. Further, it offers pump management services for the pumps and associated disposable supply kits to approximately 1,800 oncology clinics. The company also delivers local and field-based customer support, as well as operates pump service and repair centers….

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Profiting Thrice in Champagne & Ice (GLD, FAS, UUP)

Today’s letter is going to touch upon several major investment trends that we’ve been discussing here for years. And they are – • Dollar strength… • Precious metals (and overall commodity) weakness, and… • A financial sector that will lead the broader equity indexes higher. Along the way, we’re also going to close out some trades and open a new one. So let’s start with the dollar. Top Dollar Back in mid-January of this year we made a decision to hold on to our stock in the PowerShares DB US Dollar Index Bullish Fund (NYSE:UUP), a proxy for the U.S. Dollar Index, after it was PUT to us in a losing options trade. The letter was called January Expiration Profits, and our rationale for holding the trade (even though the stock was at $21.82 and we were compelled to buy in at $22) was that the buck was on the rise, and we’d quickly find tidings of profit and joy in just sitting tight with our shares. And the good news is, indeed, we have reaped profits. O Righteous Day! Calloo! Callay! But it took somewhat longer than we anticipated. The buck veered sideways to lower in the ensuing months…

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Hunting with the Indians (DJIA, EPI)

This is the time of year that speaks most directly to the need for renewal and regeneration. Yes, in most parts of the country fall is beginning (winter in some locales!) and the leaves are turning, so for many the feeling may be more one of nostalgia and conservation than revolution. But we hold to the doctrine that everything must be renewed regularly, so any retrenching and holding on to past notions and habits is, in our eyes, a recipe for stagnation, rather than a proper conservativism. And where do we find the mood for change most starkly exhibited today? Quite clearly, it’s in the run-up to this November’s elections, where the possibility of a Republican takeover of the Senate is looming as a distinct possibility. For those who hold by the status quo, or who would prefer to see the Democrats up their gains in government, if course, this stands as a disaster in the waiting. But for much of Wall Street and many investors beyond the NYSE trading floor, the sounds of elephants on the march will likely be greeted with an equally thunderous applause. Why? Because the common belief is that Republicans are good for business and…

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How This “Tiny” Stock Could Lead to Big Profits (TINY)

Most market participants have limited access to the stock of promising development-stage companies. When those companies do go public, it’s usually the bigger institutional players and retail players who get the lions share of stock at the IPO price. There is, however, another way to get in on the ground floor of a bunch of these companies — before they go public — and arguably with less risk than banking all of your capital on a single company. That way is by investing in shares of Harris & Harris, Inc., which trades on the Nasdaq under the symbol TINY. Founded in 1981 and based in New York, with offices in Palo Alto and Los Angeles, Harris & Harris Group, Inc. is a venture capital firm specializing in early stage investments. The firm seeks to invest in tiny technology including microsystems and transformative nanotechnology companies and applications in the cleantech, biotechnology, energy, healthcare, biology+, and electronic sectors. Specifically, Harris & Harris seeks companies that employ or intend to employ technology that is at the microscale or smaller — thus the stock symbol “TINY.” The firm may make follow-on investments and seeks to coinvest, and prefers to hold membership on boards of…

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Strangling the Energy Market (UNG, USO, DBC)

One of the most profound moves in the market of late is also one that almost no one is talking about. It has taken a back seat to a news cycle that’s all-out hairy with terror stories and war stories and potential war stories, so it’s not a surprise, really. That, coupled with the new highs that the major indexes are posting on a near daily basis, and is it any wonder no one cares or has time to look under the hood and see that the commodities have been chewed up like Robert Shaw in the movie Jaws. We’ll have a look at the commodities chart in a moment, but for now you should know that this is just part of a broader theme that’s unfolding precisely as we’ve predicted for the last several years. It has a number of components, the most prominent of which are – Rising equity prices, particularly in America, Declining prices for fixed income products, particularly U.S. Treasuries, A near abandonment of all other asset classes, including commodities, A strengthening U.S. Dollar, and Inflation, inflation, inflation. And while it’s true that not all of these sub-themes are in evidence as yet, we remain convinced…

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Winding our Way to a Golden Bottom (IBB, GDX, GLD, SLV)

The last time Wall Street Elite readers were treated to a discussion about gold was two weeks ago, when we closed out a profitable trade on the miners. When we set the trade we were skeptical about the yellow metal’s prospects over the near term, and in the end we were proven right. We sold a set of naked PUTs on the Market Vectors Gold Miner ETF (NYSE:GDX), and when August options expiry rolled around we were rewarded with a 100% gain on the premium we took in. Since then, there haven’t been great moves in the price of bullion itself, but with every passing day a depressed price of gold does force the mining community to consider the viability of its current portfolio of operations and the need, potentially, to shutter those that can’t deliver profitably in the current depressed price environment. Short the Miners!   Not so fast, Lucas. We’re not sure a short bet on the miners is presently in order. In the first place, the miners have a far better technical profile than does bullion, both gold and silver, which is one reason why we’re cautious about taking any position on them now, either long or…

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