Always asking questions. Why did ARM Holdings (ARMH) enjoy such a massive price rise - to $32 from $4 in 2 years - and then spend the last 18 months trading sideways? Well, okay, the obvious reason is the stock moved in line with the market's rally from the March 2009 low. But the market continued higher, albeit marginally, over the past 18 months and ARMH is stopped dead in its tracks. Will this sideways action be a top or base?

Concerns increase about competition, especially from Intel (INTC). ARM, though, can hold its own against Intel in the mobile app processor market, argues Gareth Jenkins (from UBS), who adds:

• 75% of the top smartphone apps are specifically written with ARM-based processors in mind
• ARM continues to innovate with solutions such as its big.LITTLE architecture; and
• Intel has to compete with 15+ app processor vendors (most of whom use

First, from Walt Mossberg's (Wall Street Journal) hands-on review:

iPad could be described as a personal display through which you see and manipulate text, graphics, photos and videos often delivered via the Internet. So, how has the company chosen to improve its wildly popular tablet? By making that display dramatically better and making the delivery of content dramatically faster. ... These upgrades are massive. Using the new display is like getting a new eyeglasses prescription — you suddenly realize what you thought looked sharp before wasn't nearly as sharp as it could be.

This makes it seem as though the new iPad is designed and built for an audience of one, me. I use my iPad regularly and intensively. And daily as an e-Reader. My eyesight, while not horrible, is not very good, so I appreciate all the innovations and upgrades that Apple (AAPL) keeps providing... Miraculously,

Back in 1999 and 2000, I participated in an online chat room dedicated to technology and technology stocks. It was a boom time for these companies, and the ease with which their investment recommendations and suggestions rose in price made participants feel empowered. "Who needs Wall Street?," they argued. Analysts were disparaged as "analists" and Wall St excoriated for its clueless and bumbling nature.

"Empowered," they claimed; I argued otherwise. Investing done with no due diligence raises Damocles' sword over their (and your) untested, unseasoned portfolios. My efforts were futile; the party in full swing. We all know what happened next.

"Due diligence" is a term used often; unfortunately, it means different things to different people. I argue that due diligenc

e performed by and for investors is not bounded by what and when to buy, but should

you buy. And under what conditions should you sell? You

As the market accelerates, arguably, into its culmination high from the March 2009 low, investors seek opportunities to maximize their profits without undue risk. One method is to purchase institutional stocks, typically exemplified by liquidity (high average daily volume, minimum of $15-20/share), and emerging from a second stage base (technical mumbo-jumbo). More about that last item.

One such opportunity is IntraLinks Holdings (IL), which "delivers mission-critical technology solutions to demanding clients across many industries." In essence, IntraLinks "helps clients quickly and efficiently control, follow, search, and exchange time-sensitive data." Forrester calls IntraLinks a "pioneer in cloud-based cross-organizational collaboration." From the perspective of competition, IntraLinks already is the clear market leader in terms of the independent provision of so-called "virtual data rooms."

Investors Business Daily, around three weeks ago, offered a fine and helpful overview of IntraLinks, available here. The author views IntraLinks

OmniVision Technologies (OVTI) is a leading developer of advanced digital imaging solutions. Its CMOS imaging technology enables superior image quality in many of today's consumer and commercial applications, including mobile phones, notebooks, netbooks, and webcams, security and surveillance, entertainment, digital still and video cameras, automotive, and medical imaging systems.

The company claims 28% market share in all CMOS markets; their closest competitor is Samsung with 20% market share. A helpful (though two years out-of-date) fact sheet provides an overview of the company.

A few fundamental numbers and metrics for OmniVision:

The company's PE (price:earnings ratio) has ranged from 3 to 125, and currently is 18 -

As you know, I prefer high growth, small cap companies that sell at a discount to their rate of growth ... which, I admit, are not especially easy to find these days. News about companies disseminates more quickly to more people at mostly the same time than ever before.

My investment recommendation of Uroplasty (UPI) violates one part of my investing methodology, share price; I prefer a minimum threshold of $15-20. (How odd that my first two recommendations on Seeking Alpha fall under that minimum.) One reason for the low share price is that many investors do not know about the company … although that status likely will not continue.

Uroplasty provides essential solutions for incontinence. The company's focus is on clinically effective, minimally-invasive therapies that may be performed in an office-based or outpatient setting. These therapies deliver significant improvement in quality of life for patients and provide

Entropic Communications (ENTR), a leading fabless semiconductor company that designs, develops and markets system solutions to enable connected home entertainment, showcases the effect of allowing an investment to come to your strong hands.

When I first mooted the shares several months ago (October 2010), they were in a short term base ($8-10) on their way to a new all-time high ($14) achieved just two months ago (January 2011). Subsequent to that new high, however, the shares plummeted in a beeline-like move back to $8.75 (so far), a 38% decline. This decline, perhaps surprisingly, kindles my investment interest. Well, the move to $14 kindled my interest, but this decline causes me to take action.

Why now? Because this decline:

• Manifests as a low-risk entry point;
• Should hold at the 200-day simple moving average (sma), now at ~$8.75;
• Should represent the beginning of a new intermediate term base within a long

Just now finished my review of the equity markets, an analysis I do each weekend when the lack of market activity provides me a clear mind and perspective. And while Friday's decline was no surprise (with more decline to occur), I also expect typical seasonal strength to re-appear later in February that provides one last upside oomph into March/April. (The technical analyst's bane and lament: "One more rally!") Except...

Almost without exception, individual charts betray worsening technicals: most stocks begin to droop, many wilt, and a few have withered while still on the vine. Even Apple (AAPL), the portfolio darling for many investors, me included, likely has made its high trade for 2011 at $357. (After hours trade, post earnings report.) Perhaps the market rallies one final time into March/April, perhaps not. My unease comes from what might occur next for the markets.

Regular readers know I have been raising

Market professionals rely on the clues that other investors betray, knowingly or not. Positive and negative divergences - that is divergent action between a stock and its group, a stock or group and the market, and markets themselves (metals vs. currencies) - are one clue. Another clue is how a stock trades on rumors.

Consider two stocks (labeled 1 and 2) below (click on each chart to enlarge):

• Includes daily bars since mid-2009
• Ends on 30 November
• Mimics the other, eerily so.

It is that last item I call to your attention: Two near-identical trading patterns... that end, rather abruptly, come 1 December 2010.

This blog began 5 1/2 years ago amid my oft-repeated recommendations to invest in Google (GOOG). But even before those recommendations were my private entreaties elsewhere. Google went public in August of 2004, but investing in its shares at that time was neither layup nor a popular decision: The PLAYBOY interview with the company's co-founders published mere days in advance of the company's IPO angered the SEC for violating a few rules. And the company's unusual IPO did not ingratiate the company with powerful Wall Street interests. Many people feared the shares would founder, if not sink, post-IPO.

But a good story never keeps a good stock down for long. And Google had a good story. They kept it quiet, hidden, enshrouded in secrecy and whispers for as long as they could but the IPO busted open just how profitable the company was. And because the company took another

To begin with, here is a snippet from David Rosenberg of Gluskin Sheff:

Is it the correction that is unusual, or is it the fact that in a matter of 12 months, the S&P 500 managed to shoot up 80% — and amidst the weakest recovery in real final sales in recorded history? The few times that the market had ever rallied so sharply off such a deep interim bottom were both in the 1930s, and we saw a pullback of around 40%. So, the reversal of the past three months very likely has further to go, and, sadly, many market participants are still not braced for it. The old buy-the-dip habits die hard.

The 12% slide in the market in Q2 wiped out $1.6 trillion of paper wealth off the books. In a particularly ominous sign, the 3.7% decline in the S&P 500 this past week stood in

The equity market's dynamics are always up to the investor to interpret, but its recent negative dynamics continue. Simply, simplistically, and solely: prices rise on diminishing volume, prices decline on increasing volume. The outcome from this particular dynamic, historically, has not been good or positive. To state it mildly.

So what's the problem...? This dynamic has been in force since the low and reversal of March 2009, it worsened off the low of early-November, and became truly ugly since the low of 5 February 2010. And yet the market shrugs off this dynamic, and proves itself resilient, if not also refusing to reassert its broad and wide decline. Of course, Friday's session, as broadly negative as we have seen of late, caused the market to breach finally ES 1080, which quite possibly changes its dynamics, although not yet its direction (as I stated in an earlier reply). At least, not

From a letter to clients I wrote only 31 days ago...

Moreover, the market's current position and posture argue for an intermediate term decline. Assuming forthcoming events prove correct my analysis (a decline to SPX 900-850), the possibility looms for a deeper decline based now on a weakening backdrop. But one step at a time. I would be remiss if I were not to mention my conviction that the leveraged short ETF, SPXU, will redeem your patience, and your portfolio, many times over. Markets never are mono-directional forever, oscillations against the prevailing trend do occur, and the current market has many reasons to decline, short and intermediate term...

May 2010 proves to be the worst monthly decline since February 2009 and the worst month of May since 1962; SPXU, in turn, roared higher. The question now is, "What and where next...?" To that end, I study the chart of the

Which came first, the chicken or the egg?

Apply that puzzle of philosophy as a metaphor to global economics and financial markets, and we all wonder whether equities truly move in advance of economic fundamentals or react to them. Too many swings and oscillations occur to name this or that price swing as distinct from any large economic or financial news item.

In today's speed-of-light world, grave concerns increase re the sanctity of markets and economies, and markets react immediately, devastatingly. Or do markets' renewed declines anticipate follow-on weakness? The economic and financial problems the world faces are no secret; we all know them. What we do not not know, yet, is the fallout from all our past misguided policies and pursuits (by both business and government) and the maladroit attempt to control, top down, the consequences of past bad decisions and actions.

In The Lessons of '92, I

A reader asks, "Please spell it our very plainly for those of us with history deficit disorder, what were the lessons of ‘92?"

Back in the 1980s, hedge funds became laden with lots and lots of money; too much money to utilize their tried and true tactics. To deploy all that new money, a new perspective was required, a global perspective. And thus arose the macro funds. I have forgotten many of the names but you likely recall a few: Mark Strome, Julian Robertson (Tiger Fund), etc. And, of course, George Soros (Quantum Fund).

Several of the macro funds decided correctly that England did not measure up to the ERM’s standards. To wit, the European Exchange Rate Mechanism (ERM) enforced specific measures by which each nation must abide; the Pound Sterling clung tenaciously above its agreed lower limit, but the fundamental situation betrayed that it should not. The macro funds

As reported by the Huffington Post today:

The European Union (EU) unveiled a staggering €750B ($966B) plan to save the eurozone from a debt contagion crisis. These funds include €440B in loans from eurozone nations, €60B from EU emergency funds, and €250B from the IMF. The money will be available to rescue eurozone countries that become financially distressed. Additionally, the ECB will take the step of buying government bonds, previously considered the "nuclear option" of the euro defense measures under consideration... AND the Federal Reserve has reopened a credit line to send dollars to Europe.

The guns are all out, and firing. The immediate result will be initial reversals of last week's action, as equities rally globally. Straying from predictions, we all should ask ourselves: Who or what does all this money target? My reply: It rushes to bandage over the symptoms of the problem, but fails to

Equity markets decided to put on their own show of fireworks, two months ahead of the calendar. And what a show it was! At one point, the Dow Industrials dropped by ~1,000 points, its largest ever one-day point drop.

In light of that crazy action, you are told to "Use limit orders!" Please recall my post, Market Volatility, Liquidity, and You, in which I point out the primary difference between order types:
● Market orders assure an execution, but not a price
● Limit orders assure a price, but not an execution

● And neither type of order protects your portfolio from the shenanigans floor specialists can, will, and do play, especially during "fast market" conditions, such as occurred on Thursday and Friday. (Please re-read that post for more understanding

So there I am, reading the article below and attempting to filter it with the Libertarian perspective; that McNeil Consumer Healthcare's decision(s) was (were) forced on them by an evil government. Probably at gunpoint, no less.

Johnson & Johnson (JNJ) division recalls 43 OTC medicines for infants and children
By Lyndsey Layton
Washington Post Staff Writer
Sunday, May 2, 2010; A04

A division of Johnson & Johnson is recalling 43 over-the-counter medicines made for infants and children -- including liquid versions of Tylenol, Motrin, Zyrtec and Benadryl -- after federal regulators identified what they called deficiencies at the company's manufacturing facility.

The voluntary recall, which was announced late Friday by McNeil Consumer Healthcare, affects hundreds of thousands of bottles of medicine in homes and on store shelves throughout the United States and its territories and in nine other countries -- a vast portion of the children's medicine market. ...

FDA

I mentioned in my post, A Tipping Point for European Debt, that Europe is not alone; England, Japan, and the US could suffer similar dire financial circumstances.

Well, Friday, Fitch warned Japan to get its financial house in order or suffer a downgrade in the quality of its debt. This is no idle threat; a lower rating means higher interest rates on its sovereign debt. And higher interest rates means increased costs to service that debt. And increased costs could spiral quickly out of control.

This all smacks of (is similar to) a maintenance call; if you have ever invested on margin you know what I mean. The first rule of maintenance calls is never pay them, always liquidate. The problem with paying them is that the problem(s) that caused the

The chart below measures each European nation's budget deficit as a percentage of its GDP; three of the five PIIGS countries (Spain, Greece, and Ireland) lie to the far right (exclude the EU16 and the EU 27). Italy's debt load looks manageable absolutely and comparatively, until you dig deeper. For some reason, Portugal is not shown.

click to enlarge

Of the five nations, only Ireland does the necessary heavy lifting, the painful work, to close its deficit; meanwhile, the dream of easy money continues for the other nations. What happens, though, if that dream becomes nightmare? Perhaps interest rates rise, as they will, and the debt service load becomes unmanageable -- what then? Perhaps no buyer anywhere steps forward at any blandishment (rate) to own more of that nation's sovereign debt -- what then?

Really, there once was a cycle for this type of event. When interest rates dropped, debtors