Market Investing Strategies Technical Information
Support Levels S&P 500 1856
Resistance S&P 500 1897
Support Levels DOW 16,380
Resistance DOW 16,680
Support Levels QQQ 85.70
Resistance QQQ 88.20
Support Levels NASDAQ 3960 - 4040
Resistance NASDAQ 4245
Market Investing Strategies Cycles
Six stocks that deserve attention are Kimberly Clark ( KMB: $ 111.06 ); KMB has a rising 13 and 50 day moving average. AMGN ( AMGN: $ 111.94 ).appears oversold and can rally to its 50-day m.a. at $ 118.
Other stocks that seem to be in a bottoming cycle are Home Depot ( HD: $ 77.36 )
Select Comfort Group ( SCSS: $ 18.91 ) Kirklands ( KIRK: $ 16.87 ) and Santander ( SAN: $ 10.03 ).
Banco Santander has paid an average of 7% dividend over the past five years and at the current stock price yields 6.4%. Sheila Bair, former chairman of the FDIC ( 2006 to 2011 ) is now a director.
They have thousands of offices in countries that are growing faster than the U.S. especially in Latin America. They are strong in emerging markets like Argentina and Brazil. Emerging market stock market performances can be seen the cycles chart at the end of this section.
The Investors That QE Left Behind
The U.S. stock market appears sound following another eventful week. After exploding to new all-time highs on Monday and Tuesday, stocks were turned back at the 1900 level on the S&P 500 Index (NYSEARCA:SPY) and finished the week effectively flat from last Friday. But while the stock market uptrend remains firmly intact, signs of erosion continue to accumulate under the surface. Stocks continue to trade at considerable premiums on a trailing 12-month and cyclically adjusted 10-year price to earnings ratio basis. And they are doing so at a time when the pace of economic growth remains sluggish.
QE has been great for the U.S. stock market over the last five years.
But not all investors have benefited especially small and micro-cap industries.
Many other asset classes both domestically and around the world have struggled in recent years, which may present attractive upside opportunities for investors going forward.
Since 1881, the market has traded around 16.53x trailing ten-year earnings. It currently stands at 25.33 or about 50% overvalued. This is disconcerting for long term investors.
Quantitative easing from the U.S. Federal Reserve has certainly been great for the U.S. stock market over the last five years. But that does not necessarily mean that it has been great for everyone. Just as there is no free lunch, the cost for first rescuing the global economy and subsequently inflating asset prices including stocks in a failed attempt to generate sustained economic growth through the 'wealth effect' has been borne directly by retirees and those living on fixed incomes that have been forced to take on greater risks with their savings to generate income with interest rates pinned effectively at 0%. Not all investors have benefited equally. For while the U.S. stock investor has certainly been blessed in this sluggish growth world over the last several years, the same cannot be said for those allocated across many other asset classes.
The benefit from QE for the U.S. stock investor has been abundantly clear since the bottom of the financial crisis in March 2009. As mentioned in previous articles, the key characteristic of the program
that has helped juice stock prices is the daily purchase of U.S. Treasuries.
For if the Fed is not engaged specifically in daily U.S. Treasury purchases, the stock market (SPY) has may have languished. Taking this one step further, when the Fed is not actively engaged in any stimulus program whatsoever such as Operation Twist that was in place from October 2011 to December 2012 right up to the launch of QE3 in January 2013, or if they are not flooding the speaking circuit with promises of fresh new rounds of stimulus being imminent, the direction of the stock market has been lower.
In 2013, the US found itself in the top half of the list in terms of stock market performance around the world. So far this year, however, its weak returns put it in the bottom half of the list. With a year-to-date gain of 1.17% (S&P 500), the US currently ranks 46th out of 75. If you were to use the Dow (-0.87% YTD) instead of the S&P 500, the US would rank 56th out of 75, and if you were to use the Nasdaq (-2.88% YTD), the US would rank 63rd out of 75. bounding faster than in the U.S.
Of the G7 countries, the US currently ranks 5th out of 7 in terms of year-to-date performance. Italy is up the most with a gain of 8.87%, followed by Canada (+6.71%), France (+3.57%) and Britain (+1.39%). Germany ranks behind the US with a YTD gain of just 0.78%, while Japan ranks last with a YTD decline of 13.47%. Japan actually ranks dead last on the entire list, even behind Russia, which is currently down 13.08% YTD.
This balanced investing trading strategies information is from the May 19, 2014 Market Investing Strategies Newsletter. To read the complete issue in .pdf format go to:
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