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After more than 40 years on Wall Street, Marc Chaikin founded Chaikin Analytics LLC in 2009 to deliver proven stock analytics to financial service professionals and individual investors. With the Chaikin Power Gauge, an alpha-generating quantitative model as its centerpiece, Chaikin Analytics... More
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  • Chaikin Market Insights - January 26, 2014

    Weekly Stock Market Tips by Marc Chaikin

    Central Banks Come to the Rescue as Stocks Rally to Resistance

    The S&P 500 Index closed on Friday at 2,051.82, up 1.6% for the week. The stock market rallied both before and after the European Central Bank (ECB) announced a larger than anticipated bond buying program on Thursday morning. Other central banks around the world chimed in, either in word or in deeds, adding more liquidity to the global banking system. This rally worked off the oversold condition of the prior week, which had taken the S&P 500 down to support in the 1,990 region.

    The market ran into resistance at 2,060, and profit taking set in on Friday as crude oil prices and the Euro dropped once again, creating uncertainty in the investment community. The prevailing wisdom now says that the risk of continuing weakness in the European economies spilling over into the U.S. economy is mitigated.

    We know from the strength in the German stock market, and other European stock exchanges, that QE in Europe will boost asset prices just as it has here in the U.S. for the past five years, but there is no guaranty that the European economies will benefit unless banks start to lend in the Euro Zone. What we do know is that the ECB's quantitative easing program will put continued pressure on sovereign debt yields in Europe, which will likely result in the Euro currency staying weak vs. the U.S. dollar.

    This suggests two important conclusions for the U.S. capital markets.

    1) Money will continue to flow into U.S. Treasury securities, as our interest rates remain attractive relative to European sovereign debt yields.

    2) A rising U.S. dollar will put a crimp into U.S. companies that derive a substantial portion of their revenue outside of the United States.

    We continue to expect higher stock prices in 2015 with a bumpy road still in front of us. On Monday, in particular, the markets will probably be buffeted by the results of the Greek election. Money will be made in stocks with a primary focus on domestic revenues in the Health Care, Retail and Technology sectors and in stocks with stable earnings power and dividend yields above the current 10 year Treasury return of 1.8%.

    This Week's Earnings Reports

    This is a very active week in terms of 4th quarter earnings reports with many key companies reporting, including Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Facebook (NASDAQ:FB), Google (NASDAQ:GOOG), Biogen Idec (NASDAQ:BIIB), Celgene (NASDAQ:CELG), Microsoft (NASDAQ:MSFT) and Visa (NYSE:V).

    Last week saw positive earnings surprises from a number of stocks that we have featured in Market Insights over the past 6 months. Delta Airlines (NYSE:DAL), Skyworks Solutions (NASDAQ:SWKS) and Southwest Air (NYSE:LUV) all beat Wall Street estimates handily and traded up to new 52 week highs. This reinforces what we have been saying for the past 3 years, namely that stocks with bullish Chaikin Power Gauge ratings are more likely to report positive earnings surprises.

    The very bullish report from Skyworks and their positive guidance for the next two quarters suggests that Apple's earnings report, which is due out Tuesday after the close, will show terrific iPhone 6 sales. Whether this is enough to spark a move to new highs remains to be seen, but AAPL has weathered substantial institutional selling pressure in the past 6 weeks as indicated by negative Chaikin Money Flow, and has now moved above resistance with the Chaikin Power Gauge stock rating once again bullish.

    Last Week's Bearish Stock of the Week

    Last week's bearish stock of the week, McDonald's (NYSE:MCD) reported an 8% decline in 4th quarter same store sales on Friday and a dour forecast for the months ahead. The stock closed at 89.56 down 2% in a week that saw the S&P 500 Index up 1.6%.

    For this week's Featured Stock of the Week and to read the full report with more stock market tips, subscribe to Chaikin Power Suite, which includes Market Insights. Subscribe now for $190/year - next week the price will increase to $495/year.

    Professionals: Click here for more on Chaikin Analytics

    Individuals: Click here for more on Chaikin Power Tools

    Disclaimer: Chaikin Analytics LLC is not registered as a securities broker-dealer or advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Chaikin Analytics does not recommend the purchase of any stock or advise on the suitability of any trade. The information presented is generic in nature and is not to be construed as an endorsement, recommendation, advice or any offer or solicitation to buy or sell securities of any kind, but solely as information requiring further research as to suitability, accuracy and appropriateness. Users bear sole responsibility for their own stock research and decisions. Read the entire disclaimer.

    © 2015 Chaikin Analytics, LLC. All rights reserved.

    Jan 27 4:36 PM | Link | Comment!
  • Chaikin Market Insights - January 19, 2015

    Stock Market Analysis by Marc Chaikin

    Again, 4 Days Down Then a Rally - Rocky Road is Flavor of Month

    The S&P 500 Index closed on Friday at 2,019.42, down 1.24% for the week. The stock market was buffeted by internal and external factors last week with the result being a second string of 5 straight down days before Friday's rally. This is something not seen in 2014 and reinforces our option that 2015 will be a bumpy road before we see the uptrend resume and new highs in the broad averages.

    With the Swiss National Bank throwing a monkey wrench into the foreign currency markets by lifting its self-imposed cap on the Swiss Franc vs. the Euro currency, the markets were faced with unexpected turmoil and the reality of huge losses at the major banks, as well as at hedge funds that used the Swiss Franc to do "carry trades".

    This added to uncertainties about the upcoming Greek elections on January 25 and the European Central Bank's quantitative easing program likely to be announced this coming Thursday. Throw in some poor economic reports, disappointing earnings at the major banks and the stock market continued to trade lower.

    The Swiss move to unpeg the Franc from the Euro suggests that the ECB will take decisive action to stimulate the European economies this Thursday; and that realization, plus the rally in crude oil, helped fuel a rally on Friday.

    The market found support near the previous weeks' lows but acts as if it needs more time and downside to shake out weak holders before a sustainable rally can take hold.

    (click to enlarge)

    Making Money in the Stock Market in 2015

    According to my stock market research, studies have conclusively shown that the best performers in the first 6 months of a new year are the very stocks that performed well in the previous year. That has already been the case in 2015 with Utilities and Health Care stocks along with Retail stocks leading the way in this choppy market. The only change to our scenario coming into 2015 is the poor performance of the Financial Sector. The major banks are underperforming in part because an early rise in interest rates would benefit their "net interest margins" and an early hike by the Federal Reserve Board is now deemed less likely because of recently soft retail sales and manufacturing reports.

    Financials are likely to bottom in the 1st quarter along with Technology stocks, and are likely to come on strong in the 2nd quarter when we will probably see the stock market back on its bullish track….

    To read the entire article, subscribe to Marc Chaikin's weekly stock market analysis, Market Insights.

    Disclaimer: Chaikin Analytics LLC is not registered as a securities broker-dealer or advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Chaikin Analytics does not recommend the purchase of any stock or advise on the suitability of any trade. The information presented is generic in nature and is not to be construed as an endorsement, recommendation, advice or any offer or solicitation to buy or sell securities of any kind, but solely as information requiring further research as to suitability, accuracy and appropriateness. Users bear sole responsibility for their own stock research and decisions. Read the entire disclaimer.

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    © 2014 Chaikin Analytics, LLC. All rights reserved.

    Jan 21 11:16 AM | Link | Comment!
  • Chaikin Market Insights - January 11, 2015

    Stock Market Analysis by Marc Chaikin

    Market Bounce Runs into Profit Taking

    The S&P 500 Index closed on Friday at 2,044.81, down 0.65% for the week. Last week we talked about negative Chaikin Money Flow in the major Index ETFs and now that pattern is prevalent in individual stocks as well. The result has been a rebound that ran into resistance much sooner than the sharp reversal off the October lows.

    Friday saw a positive jobs report which triggered profit taking when the takeaway based on lower hourly wages suggested what market participants wanted to hear, namely no urgency on the part of the Federal Reserve Board to raise interest rates.

    2015 has already been bumpier than 2014 as we witnessed a five-day decline in stock prices, something, according to my stock market analysis, we did not see in 2014. While I continue to believe that 2015 will be an up year for stocks, the path to new highs will clearly be more stressful than it was last year.

    Continue to view market dips as buying opportunities but as we said last week, watch the stock market and the economic reports for clues to future market direction. This bull market is and has been built on the improving U.S. economy and needs rising corporate profits to continue. With the spate of disappointing economic reports leading up to the positive jobs report on Friday, the stock market was jittery.

    To read the entire article, subscribe now to Chaikin Power Suite, which includes Marc Chaikin's weekly Market Insights at: http://www.chaikinpowertools.com/power-suite.shtml. Lock in last year's low rate now before the price more than doubles in late January.

    Jan 12 2:50 PM | Link | Comment!
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