A Month’s Worth of Winnings – Repeat After Me! (TSLA,FXI,XHB,RSX)

An important thing to remember about stock movements, and one that’s been documented in abundant fashion by market technicians, is the propensity of both individual stocks and indexes to perform a ‘test’ of prior lows after falling.   That is, stocks fall to new lows every day, bounce, and more often than not, reverse course a second time to ‘test’ whether that former low was, indeed, a firm bottom.     Smokin’!   Of course, should the security in question pierce below its former low, it’s likely further declines are in store. Should support hold, however, the stock is almost assuredly headed back toward its last retracement high.   Have a look now at a…

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The World is Falling Apart! (XHB)

Stand aside! Gang way! Look out below! Timberrrrr!   The decibel level toward the end of last week got so shrill that we had to throw on the headphones and cool out to some chug-a-luggin’ Johnny Cash tunes just to get some perspective.   Heaven help us – you’d think the very planet was living out its last days!     But as Johnny says, I keep my eyes wide open all the time…   In fact, while all the major averages and a few headline stocks were putting straws to the gravy, a few select sectors were actually performing well. And not just the usual suspects, like the utilities. This, for illustration sake, is the Dow…

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A Treasury Bond (TLT) Longshot Trade

We dedicated the better portion of this week’s Wall Street Elite letter to the basics of trend-watching and the best options to play on the long side.  The TLT trade we’ve come up with today precisely fits the mold as we laid it out in yesterday’s article. We concluded in that article that it was superior to select a security that was in the midst of a bull market but was about to undergo an intermediate term retracement. For a number of reasons (that we won’t repeat here), we suggested that the best returns came from buying PUTs on that security, and for those interested we recommend you look here to get all the details. But before we…

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Assuaging Your Worries (XHB, GS, HYG)

The greatest risk any investor faces in a bull market is jumping early. We therefore want to dedicate this letter to reassuring you that despite all the noise, the bull is strong. And for those who are, indeed, considering selling – and even more for those who’ve yet to climb aboard, we say – We start this week’s shenanigans with a word on the homebuilders. You’ll remember that last week’s letter was all hot and bothered by the prospect of a homebuilder breakout above an ascending triangle, a technical development that normally brings with it a rush of excited buying. Well, looky here –   This is the SPDR S&P Homebuilder ETF (NYSE:XHB), and as…

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Greek Crisis Souvlaking Good for Stocks! (XHB)

How good? Everyone’s talking about Greece. What’s going to happen if she exits the Euro? Will Europe let her go? Will the Russians and Chinese step in to save her? Will the next domino to fall be Italy or Spain? Will there be a global financial freeze that follows a Grecian implosion. And so on and so on… And yet the truth lies elsewhere. For behind the headlines, what’s actually unfolding is classic Greek drama – a Euripidean comedy in fact – whose performance so captivates its audience that they fail to recognize the underlying tragedy of the piece. What is Hidden and What is Revealed   American investors should be crying. For the Greek…

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It’s All up to You – and the Trades You Make (RSX, XHB, SOCL)

Know it well, friends – no one can do you damage of any size or scope like you can do to yourself. That’s the first and last word on trading and on life. Looking for a reason why you’re broke or sad or lonely or angry or feel cheated or depressed or otherwise negative about something or someone? We say take a look in the mirror. Because 999 times out of a thousand… If not for your failure to act or your failure to refrain from acting, you wouldn’t be in the mess you’re now in. So why not 1000 times out of a 1000?   The reason we qualify the matter is because there…

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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…

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Trade the Weak Against the Strong (XHB,QQQ)

We’re going to continue today with a theme that we’ve been pressing for some time now, but that still deserves some additional elaboration. Believe it: It’s Different this Time Wall Street is nothing if not skeptical. The best of the street’s traders and analysts are doubters nonpareil. Main Street also has its doubters. And it’s precisely that quality that’s traditionally made for a safer investment approach and higher returns over the long haul.   This Missouri ‘show me’ attitude has saved many a market player a lot of money, because on Wall Street perhaps more than anywhere else, the need to kick the tires and look under the hood – or better yet, to get…

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