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AUDUSD remains in downtrend from 0.9085, the rise from 0.8660 could be treated as consolidation of the downtrend. Resistance is at the upper line of the price channel on 4-hour chart, as long as the channel resistance holds, the downtrend could be expected to resume, and next target would be at 0.8500 area. On the upside, a clear break above the channel resistance will indicate that the downward movement from 0.9085 had completed at 0.8660 already, then the following upward movement could bring price to 0.8950 – 0.9000 area.

Provided by ForexCycle.com

By MoneyMorning.com.au

We suppose it was overdue.

A crisis hasn’t gripped the market in, oh we don’t know, at least four months.

So it was about time a new crisis appeared.

But what would it be?

You’ve had the major crises — the US, Japan and Europe. You’ve had the obscure — Cyprus and Dubai. And you’ve seen more alphabet soup bailout funds and money printing programs than you could possibly eat.

The one thing you haven’t had in a while is a good old-fashioned emerging markets crisis. Enter Argentina…

The best way to describe Argentina is that economically it’s the embarrassing relative who you know will always do something inappropriate at the next family gathering.

It’s not a matter of if it will happen, it’s a matter of knowing when it will happen. For Argentina that came last week when it devalued its currency. The Argentine peso dropped 13%.

It was perfect timing. Because if that wasn’t enough to fluster the markets, news about the possible contraction of China’s manufacturing industry got the markets worried about a new emerging markets meltdown.

So, should you worry, or like every other ‘crisis’ since 2009 will this just be another chance to buy stocks cheap as others panic and sell?

Looking for Bubbles Even Where They Don’t Exist

There’s no doubt it’s a tough decision for investors.

If you get it wrong it can have a huge impact on the value of your investments.

If you panic and sell, and it turns out that it was a storm in a teacup, then you’ve potentially missed out on quick gains as the market rebounds.

But if you hold onto your stocks, and it turns out things are worse than expected, then you could see the value of your wealth fall 5%, 10%, 20% or more in just a matter of weeks.

And if it turns out to be a repeat of 2008 you could see your wealth drop by 50%.

If you’re at the stage of life where that type of fall could ruin your retirement plans then you may have no choice but to bailout on the market just as a precaution.

But you shouldn’t be rash about a big decision like that.

We’ll go back to something we’ve said for the past five years. Too many experts are seeking glory. They’re looking for bubbles and market‐tops everywhere. Even in places where they don’t exist.

And so when Argentina comes along and devalues its currency, the bubble watchers perk up and say, ‘We told you something bad would happen’. Even though for all the time they’ve spent looking for the next crisis, not a single one of them had Argentina at the top of their warning list.

They Didn’t See This Coming

That tells you one of two things, either they didn’t think Argentina was worth looking at (hence why they didn’t see it coming) or they presumed Argentina’s devaluation would be so catastrophic they couldn’t see how it could happen.

Or something in between.

Our bet is it’s the former. As we said at the top, Argentina has form for this sort of thing.

As Andrew Wilkinson, chief market analyst at Interactive Brokers told Bloomberg News:

‘People do not expect this to last across time and I would expect volatility to subside in the weeks ahead. There’s a belief Argentina is in a basket of its own and I wonder how sustained the move down in stocks is going to be.’

Look, we’re not saying you should take as Gospel everything said by a mainstream analyst. After all, these are the same folks who thought everything would be fine in early 2008.

Based on that view it would seem rash to sell stocks due to a devaluation of the Argentine peso. But what about China, that surely has to be a big problem just waiting to happen, right?

China’s Economy to Double in Nine Years

China’s a different story. We’re not about to tell you that problems with China would be a storm in a teacup.

If China’s economy hits a brick will then it could be 2008, 1987 and 1929 all rolled into one. That’s not impossible. The Chinese economy has undergone huge growth over the past 20 years.

And even if China stays on track to become the world’s biggest economy in the next few years that doesn’t mean it and the world’s markets won’t crash.

Think especially about 1929. The US economy was already the world’s biggest economy at that point, and it would grow many times over during the next 80 years. But that didn’t prevent the stock market crash of 1929.

The same goes for China.

But, we will make one small point about the prospects of a Chinese market collapse. From 1921 until the crash in 1929, the US Dow Jones Industrial Average climbed from 70 points to 381 points.

That’s a gain of 444% in eight years.

By comparison, China’s CSI 300 index has fallen from a peak of 5,737 in 2007 to just 2,215 today. That’s a drop of 61.4% in less than seven years. It’s arguable to say that China has already had its ’1929 moment’. It could be that the last five years of sideways action is the equivalent of the two decades of sideways action experienced by investors from the 1930′s through to the early 1950′s…just before the huge bull market began.

Remember, despite all the talk about lower output, forecasts still suggest China’s economy will double over the next nine years.

Call us naïve, but if that happens, it just seems impossible to think that the Aussie economy and Aussie resource stocks in particular won’t benefit from that growth.

Cheers,
Kris.+

From the Port Phillip Publishing Library

Special Report: 2014 Predicted

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By MoneyMorning.com.au

By MoneyMorning.com.au

I’d like to draw your attention to one of the most immediate threats to Aussie share prices: China’s shadow banking system. ‘China moves to avert shadow lender’s default’, reports Friday’s Wall Street Journal. Remember, trouble in the wider financial system usually starts with the most marginal, peripheral, and high risk firms and then works its way to the centre.

China’s WMPs

What’s so fascinating about China’s trouble with Wealth Management Products (WMPs) is how similar they are to the same securities that nearly destroyed the American financial system. You have banks making high risk loans to borrowers who can’t get credit otherwise. Then, the liability is turned into an asset and sold to investors seeking high yield. The mechanics are familiar, aren’t they?

In China’s case, the latest trouble comes from a coal company that may not be able to pay back a loan. As a result, investors who bought the securitised loan believing, perhaps, that it was simply a high yield savings vehicle, now risk losing their money. Unless the government intervenes to save everyone from themselves. The Journal reports that:

‘A coal company facing repayment of a three billion yuan ($500 million) loan has received government permission to restart one of its mines as creditors and officials scramble to avoid a default that could batter confidence in China’s loosely regulated shadow-banking sector.

‘China Credit Trust Co., a so-called shadow lender, notified investors in products linked to the loan on Wednesday about the permit to resume production, according to a notice reviewed by The Wall Street Journal. The restart could allow the debtor, Zhenfu Energy Group, a little-known company in Shanxi province, to generate revenue to help repay investors.

‘The scramble to stave off default highlights what economists and analysts describe as a predicament for the government. Though defaults have occurred on risky investment products in recent years, the government has arranged bailouts for investors. Some economists say that the bailouts only encourage reckless lending practices.’

These days, $500 million is a drop in the bucket. The government could arrange the bailout with no problems. Similarly, if the government doesn’t bail out investors, and if the coal company fails to repay the loan, it’s not the end of the world. The financial system could survive a $500 million ‘accident’.

We’ll know either way by January 31st. Payments are due to ‘investors’ on January 31st, when the Year of the Horse begins on the Chinese calendar. But the bigger issue is that 40% of China’s $3 trillion debt is local government debt.

And this gets back to what the theoretical and actual limit of poor capital allocation is. In a closed system, where there really is NO market, the central government can pick winners and losers, change terms, reschedule debt, and make investors whole at will. Losses aren’t necessary and systemic crisis, in theory, is perfectly avoidable.

But the underlying problems affecting lenders, borrowers, and savers are still a clear and present danger. The suppression of interest rates is an incentive for savers to become speculators and put money in high yielding ‘wealth management’ products. When a default creates a loss of life savings, it’s socially and politically destabilising. It’s not just a financial story anymore.

For lenders who act as a conduit between household savings and businesses that can’t get credit through traditional means, loss of confidence in wealth management products is a business killer. If you can’t package up loans and sell them as investment products, you’re going to have trouble attracting depositors, which isn’t going to help your ability to make loans.

And for the borrowers the danger is clear. If you can’t borrow more money, then you’d better be a real business. In the coal company’s case above, they hope to open a new mine to help generate cash flow to pay off the loan. But the Chinese coal sector is riddled with over capacity and unprofitable firms.

Still, that’s the real issue isn’t it? Money may grow on a printing press. But real capital is what you create when you take savings and turn it into new productivity, something that adds genuine value and creates a profit. Money borrowed for the sake of growth alone is just a poor allocation of capital. All it ends up doing, in the long run, is destroying the accumulated savings of a country.

None of the above means China faces an immediate capital crisis. But it has a major systemic problem. And its regulators walk a fine line. They can allow a failure or two and hope that it teaches savers a lesson without creating a panic. Or they can play it safe and bail everyone out, meanwhile permitting the continued boom in speculative (and unproductive) lending, which puts even more of the nation’s wealth at risk.

Regardless of the choice, my main point is that to the extent Australia is dependent on the seamless expansion of China’s economy at 7% a year, trouble in the shadow banking system is a threat. It’s going to be a threat for a long time. In the year of the Horse, wear a helmet and buckle up, cowboy.

A Golden Mattress Strategy

It’s not all bad news for the Chinese middle class though. And for a change, it’s not all bad news for gold. While the mainstream pundits have become quite comfortable predicting that 2014 will be even worse for gold than 2013, evidence of a great ‘money migration’ in metal was produced this week.

Unofficial (meaning not the Central Bank) demand for gold from China reached 1189.9 tonnes last year, according to survey of gold demand published this week by Thomson Reuters GFMS. That’s a 32% increase in demand, year over year. Since 2003, Chinese gold demand has grown by five times.

So there you go. The gold price fell 28% in US dollar terms and the Chinese increased demand by 32%. That sounds like buying low to me. And while gold based ETFs reduced their holdings by 880 tonnes last year, Swiss refineries were busy melting that gold and selling it to retail investors in China.

Maybe the appetite for gold in China is a quaint relic related to old ideas about storing wealth. Maybe the Chinese are stupid for accumulating gold when they could, in Charlie Munger’s terms, be investing in productive enterprises. Or maybe the West will deeply regret the migration of so much gold from vaults in London and Zurich to the mattresses of homes in Beijing and Shanghai.

Dan Denning+,
Contributing Editor, Money Morning

Ed Note: The above is an excerpt from a recently published issue of The Denning Report.

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By MoneyMorning.com.au

It seems like social trading has become all the rage recently. Forex brokers have been announcing their offering of various social trading platforms. These forex social trading platforms usually score and rank the most successful Forex traders based on profitability. They then allow the user to either follow or follow and trade as a particular trader.  The follower  opens a live account with the broker and selects who they want to follow deposits or money and wait for the results. In theory this sounds all well and good but for a practical matter the results are usually not the desired effect for the account holder.

The biggest discrepancy that could cause a problem is the amount on deposit from the account holder if this is dramatically lower than the amount of the trader that they’re following this can obviously cause of problems with regards to drawdown. For example an account holder who opens an account with $500 cannot sustain the drawdown of an account that he’s following that has a balance of $10,000. Another issue that is presented is that the spreads that the account follower are usually wider than that the account that they’re following. This can obviously have a negative effect on the profit and loss of the account.

There are other effective ways of you so using social networks to trade from. Twitter and other social networks can be a very effective tool to have market information in a timely manner. Having timely market information is as effective if not more effective as mirroring the trades of a successful trader. There are platforms that privide filtered information from reliable sources to trade from. By having the right feeds and news sources a trader can focus on their particular strategy without becoming distracted.

Social networks can be an effective tool for forex traders if used correctly and if the trader does not allow himself to get lost in some of the noise of social trading.

To learn more please visit www.clmforex.com

Disclaimer: Trading of foreign exchange contracts, contracts for difference, derivatives and other investment products which are leveraged, can carry a high level of risk. These products may not be suitable for all investors. It is possible to lose more than your initial investment. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. A Product Disclosure Statement (PDS) is available from the company website. Please read and consider the PDS before making any decision to trade Core Liquidity Markets’ products. The risks must be understood prior to trading. Core Liquidity Markets refers to Core Liquidity Markets Pty Ltd. Core Liquidity Markets is an Australian company which is registered with ASIC, ACN 164 994 049. Core Liquidity Markets is an authorized representative of Direct FX Trading Pty Ltd (AFSL) Number 305539, which is the authorizing Licensee and Principal.

Source: JT Long of The Gold Report  (1/27/14)

http://www.theaureport.com/pub/na/david-morgan-the-silver-bottom-is-in-time-to-hold-add-and-ride-it-out

When the bulls are running for the doors, that is a sign that we have hit bottom and wise investors should hold on to their portfolios for the ride up, says Silver-Investor.com Editor David Morgan in this interview with The Gold Report . It may take a couple of resource war-addled years for gold and silver prices to move back to profitable levels, but the right companies—and he points to five from the members-only Morgan Report files—could make money all the way up.

The Gold Report: When we interviewed you last, you mentioned the possibility of “resource wars” in 2014 as referenced in Michael Klare’s book of the same title. What will that look like to the average investor?

David Morgan: The resource wars have already started. Look at Mexico. It has a resource that it covets very much, and that’s energy. That is why the government levied a new tax designed primarily at energy but subsequently adds a 7.5% royalty on mining profits. Is it a war? Not per se, but it is detrimental to companies that operate in Mexico today and in the future. I think we will see even more of this kind of thing in 2014.

TGR: Last year was a volatile year for precious metals prices with silver going below $20/ounce ($20/oz) and gold bobbing around $1,200/oz at the end of the year. Are we still three or four years from $100/oz silver as you said in your last interview? What’s going to push it to that level?

DM: What’s going to push it to that level are fundamentals. There is no change fundamentally in why investors would buy gold in 2001 compared to why they would buy gold in 2013 or 2014. The fundamental fact is that there isn’t a nation state on earth that has a handle on the debt problem. Because of that, we’re going to see more people wake up to the need for precious metals, because precious metals are true money outside the framework of the current system.

The correction we had in silver and gold isn’t that abnormal in a major bull market. I’ve been through one bull market already in my lifetime. I watched gold go from the fixed price of $42.22/oz up to $200/oz, then to sell off to around the $100/oz level. It later advanced all the way back to the peak of $850/oz in January 1980. I have seen the damage a big shakeout in a major bull market can have. That experience makes me a little bit more hardened to weather the storm we just experienced.

However, I think that the worst is over. I think silver has bottomed. Gold probably has as well. This year, 2014, will be a rebuilding year. Depending on what happens in the global economic system, it’s possible that we could even see a very good year for the metals, but I don’t anticipate that. I’m anticipating a rebuild year where silver climbs back over $30/oz and gold travels up well over $1,600/oz, probably to the $1,700/oz level or higher depending on how the economy unfolds.

TGR: Precious metals experienced a nice little bump at the beginning of the year. Of the companies now in the resources market, what percentage will live to see an upturn in the metals prices? How many are just on the edge right now?

DM: That’s a good question, but I’m probably not the best to ask because we focus mostly on top-tier and mid-tier companies, companies that are producers or near producers. We do study a great deal of the junior exploration sector, but suggest very few. If I would venture a guess, of the micro-cap companies—$0.5–3 million—probably half will survive, maybe fewer than that.

It has been very difficult in the precious metals sector over the last couple of years. Even some of the best companies—I am thinking of one recently that has one of the richest gold mines in the world—can be mismanaged. That is why with some of these companies I tell people to only risk money they can lose because the payoff can be great, but they can lose it all, too. And some of my readers thank me for it later. That happened just this morning.

TGR: You mentioned Mexico’s new tax. What impact is that going to have on producers large and small there? Are there some companies that could do well even with the new royalty burdens?

DM: Yes, there are. We’re still working on our white paper on the topic, but I can outline it in general terms. If you’re a major producer, like First Majestic Silver Corp. (FR:TSX; AG:NYSE; FMV:FSE) as an example, the new Mexican tax is going to cut into the bottom line, but major producers will be able to adjust to still make a profit. For a mid-tier company, it could have more of an effect because the margins are less. But in the junior sector, after this tax is paid, it’s going to be touch and go in many cases. The smaller companies that have very little margin or would need to be producing for a few years to become profitable are not going to be able to start as easily because their breakeven analysis is pushed out farther. So, basically, if a company is currently producing with wide margins, it will be OK. But companies just getting started or very small producers are going to have a tougher time.

TGR: Do you see this mining tax as a permanent thing or will the government see the error of its ways and rescind it?

DM: I really don’t know. There may be too much political pressure to take it back in the short term. It might be altered somewhat, but I don’t think it will come off entirely.

TGR: You mentioned First Majestic. The company just started production at the Del Toro silver mine in Mexico. Is that significant?

DM: Yes, it will help the bottom line, but I’m sure First Majestic would prefer that things were the way they were before this tax took place.

TGR: Your December Morgan Report included Silver Standard Resources Inc. (SSO:TSX; SSRI:NASDAQ). You said the company is selling assets. Will that help profitability?

DM: It’s a decision by Silver Standard to cut costs and I will withhold judgment for now. Basically, this is a time when metals prices are pretty much near the cost of production for gold and silver miners across the board. Companies with low margins look at every possible way that they can increase the margins. One way is to cut costs. And one way to cut costs is to sell assets that someone else would want. Prices in the metals industry are notoriously volatile, and it’s always good to increase margins. But companies start looking a little harder in tough times than they would in a more robust environment for precious metals. Silver Standard initiated a cost reduction initiative in the first half of 2013 and costs could continue to decline for the next three quarters.

TGR: Outside of Mexico, what silver producers do you like?

DM: I’m fond of the royalty companies. It’s pretty hard on the silver side to go wrong with Silver Wheaton Corp. (SLW:TSX; SLW:NYSE). The company has such a geographic diversification that it’s very difficult to beat that business model. Silver Wheaton is probably one of the safer ways to invest in silver because the margins are so high. Even when a streaming contractor has a problem, Silver Wheaton is much safer than a one-stock bet. That is why I like the royalty companies and it’s hard to beat Silver Wheaton.

TGR: What is the next catalyst for Silver Wheaton? Are you watching the ramp-up at Vale S.A.’s (VALE:NYSE) Salobo mine in Brazil?

DM: Yes. Silver Wheaton has a lot of streaming deals that will continue to grow for the company. The deals are attractive to Silver Wheaton’s shareholders and, in most cases, to the underlying company because many wouldn’t be able to get the funding to move forward without it. So it’s a win-win situation.

TGR: What about gold companies? Are there any you like right now out there?

DM: We have done a great deal of research on many gold companies and one that we have discussed with members for the last five years is Goldcorp Inc. (G:TSX; GG:NYSE), one of the most sought-after names at one time. That company looks so good going forward that if investors are patient, meaning willing to wait three years or so, it could pay off nicely.

TGR: What about non-gold and silver companies?

DM: Trevali Mining Corp. (TV:TSX; TREVF:OTCQX; TV:BVL) is a zinc play. It’s one of the few positive stories out there right now. It’s up from where we recommended it and has the capital to keep moving the Caribou and Santander mines into production. Some of the major bank analysts are now talking zinc; we were pretty early.

TGR: We’ve had a lot of debate among some of our experts about the ideal ratio between gold and silver. If gold goes to $2,000/oz in 2014, do you believe silver will follow based on a specific ratio or do you see them working independently?

DM: I have studied this issue as much as anyone other than The Moneychanger author Franklin Sanders. A 45-foot long historic silver chart covering the last 4,500 years, where each foot would be 100 years, shows that only in the last 19 inches the silver-gold ratio would be above 16:1. The 4,400 years before that, it would be less than 16:1! So, from a long-term perspective it means silver is undervalued to gold. Yet, let us agree that for the current time frame it has much less meaning.

My point is that the ratio tells you which metal is doing better relative to each other. The ratio was 80:1 when the silver bull market started, and it’s basically 60:1 now. That means as volatile as silver has been, from the start of the bull market, if investors put the same amount of dollars into gold or silver, they would be better off putting it into silver. I’m not advocating that. I think investors should own both gold and silver. But, overall, I believe silver’s outperforming trend will continue.

Now Eric Sprott believes in the monetary classic ratio of 16:1 ratio and thinks the metal will eventually return to that level. I think the ratio will at least test where we’ve already been in this bull market, and that’s about a 35:1 ratio. We’ve already been there very, very briefly when silver did its big magic jump from $19/oz to $48/oz in 2011. In the meantime, we’re looking at more volatility.

TGR: What message did you give people at the Cambridge House Investment conference in Vancouver?

DM: The bull market is not over and it’s normal in these secular bull markets to shake off some bulls and reach the status that we are currently at where the sentiment is very low. There is a lot of distrust and a lot of people are questioning whether they should be in the sector. Those are signs that the bottom is in. Now is the time, for those not in the sector, to get in. For those already in, either hold what they have, add to their position or ride it out. A couple of years from now we’re going to see much higher prices in the precious metals. Three or four years out, it may be overvalued in real terms, but that remains to be determined.

TGR: Thanks, David, for your insights and time.

David Morgan (www.Silver-Investor.com) is a widely recognized analyst in the precious metals industry; he consults for hedge funds, high net-worth investors, mining companies, depositories and bullion dealers. He is the publisher of The Morgan Report on precious metals, the author of “Get the Skinny on Silver Investing” and a featured speaker at investment conferences in North America, Europe and Asia.

Want to read more Gold Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

DISCLOSURE:
1) JT Long conducted this interview as an employee of The Gold Report. She personally and/or his family own shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Gold Report: Trevali Mining Corp. Goldcorp Inc. is not affiliated with Streetwise Reports. Streetwise Reports does not accept stock in exchange for services. Interviews are edited for clarity.
3) David Morgan: I or my family own shares of the following companies mentioned in this interview: All companies named in this interview. I personally am or my family is paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts’ statements without their consent.
5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.

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CRUDE OIL: With its bullish offensive cut short following a two-day weakness, further decline cannot be ruled out. On further decline, the 94.51 level, its .50 Fib Ret (its 91.27-97.24 move) will be targeted where a violation will aim at the 93.74 level, representing its .618 Fib Ret. Additionally, support comes in at its psycho level located at the 93.00 level and subsequently, the 92.50 level. Its daily RSI is bearish and pointing lower supporting this view. On the other hand, Crude Oil will have to break and hold above the 96.25 level, its Jan 24 2014 low. Further out, resistance resides at its Jan 23’2014 high where a breach will resume its broader upside towards the 98.18 level, representing its 200 ema and then the 99.38 level, representing its Dec 31 2013 high. All in all, Crude Oil remains biased to the downside on corrective pullback.

Article by www.fxtechstrategy.com

by George Leong, B. Comm.

The retail sector can be a brutal place for retailers at all times. Think about it. You have to convince the consumer to buy your stuff instead of a rival brand’s. It’s all about the product, image, and marketing. That’s why shoppers look to brand-name items versus no-name products. Are the brand-name goods better? Perhaps, but is it enough to justify the price differential?

Yoga pants maker lululemon athletica inc. (NASDAQ/LULU) is currently at a 52-week low driven, in part, on poor press and rising infringement in its core market. But with sales estimated to grow 16.1% in fiscal year (FY) 2014, followed by 16.3% growth to $1.85 billion in FY15, according to Thomson Financial, the numbers actually don’t look that bad. For the speculator, it may be an opportune buying opportunity to consider this retail sector stock.

            Chart courtesy of www.StockCharts.com

At this price level, the upside reward for Lululemon appears to be greater than the downside risk. The company just needs to deliver results and keep its founder, Chip Wilson, from saying anything stupid in public. In addition, the company needs to address its quality-control issues, especially as cheaper competitive goods surface in the retail sector. When you buy Lululemon, the superior image and quality should be what you are paying for; if the company can execute on this simple retailing strategy, we could see strong gains for Lululemon in the retail sector.

And then there’s Coach, Inc. (NYSE/COH). My wife loves this place, especially its discount outlets that are scattered across America. The problem with Coach has been the competition, specifically the rise of Michael Kors Holdings Limited (NASDAQ/KORS), which continues to be my top pick in the luxury-brand retail sector. (Read “My Favorite Pick Among the Luxury Brand Stocks.”)

            Chart courtesy of www.StockCharts.com

Now, that doesn’t mean Coach is dead in the water. The company is currently facing some execution issues in the retail sector that clearly are due, in part, to the emergence of Michael Kors.

In the fiscal second quarter, Coach delivered a quarter that it probably wishes wasn’t the case. Quarterly sales fell to $1.42 billion, down six percent from the year-earlier quarter. Earnings in the quarter also fell to $1.06 per diluted share, down from $1.23 per diluted share and well short of the consensus $1.11 per diluted share provided by Thomson Financial.

The company blamed the weak sales on the North American retail sector, which saw a decrease of nine percent year-over-year. International sales edged up two percent, or 11% if you adjust the currency to constant dollars. Of course, strong sales in China helped to avoid an even worse quarter.

If you are looking for an aggressive trade, Coach is also trading near its 52-week low and could be a buying opportunity in the retail sector if the company can convince shoppers to bypass the Michael Kors stores and go straight to Coach. It won’t be easy, but I wouldn’t write off Coach just yet.

I would look to play Coach via buying call options. For example, allowing the company a year to turn things around, you can buy calls with a January 2015 expiry. The in-the-money $40.00 and $45.00 calls on Coach with a set timeline on January 17, 2015 may be worth a look.

This article These Retail “Screw-ups” Could Turn Things Around This Year Was originally published at Profit Confidential

Article by Investazor.com

At the beginning of December, I said that Apple should be in your portfolio as the company was on the verge on striking a deal with China Mobile. They made the deal, but Apple did not move up as much as expected, on the contrary, the shares kind of stagnated. But, today’s earnings report is the moment to show if Apple recovered from the slump it has been last year and it seems that markets’ momentum is bullish for Apple once again.

Investors expect the revenues gains to be driven by records sales of iPhones and iPads, which according to Morgan Stanley estimates, would amount to 54 million to 55 million iPhones and as many as 26 million iPads over the quarter. Analysts on average predict profit will grow 8 percent to $10.89 a share on sales of $45.9 billion for Apple’s fiscal second quarter, according to data compiled by Bloomberg.

To cut the story short, the fundamental points towards a great holiday season for Apple, which translates into record sales of iPhones and iPads that could turn into an upside surprise and a bullish impulse for the company shares.

The technical views give us bullish perspectives as well as the fundamentals. On a daily timeframe, a continuation pattern (symmetrical triangle) has been drawn and the price is currently close to the resistance line from $555. I expect that during the regular trading hours, the price to advance or even to surpass the resistance line as in the after-market hours, Apple will report after the closing bell, the price to march towards the first target of the triangle at $571, remaining that tomorrow to build on the potential positive momentum gathered from a better than expected earnings report and the shares to hit a new local high at $588.

The post Apple – Ready To Make A Bullish Statement? appeared first on investazor.com.

by Mitchell Clark, B. Comm.

With more and more companies reporting, earnings results are a mixed bag. There’s outperformance, underperformance, and some just plain awful sales results.

Coach, Inc. (COH) got hit hard after the company missed consensus big-time on a dramatic drop in North American comparable store sales. The famous handbag manufacturer also said second-half domestic sales would fall comparatively. The company is experiencing significant competition; Michael Kors Holdings Limited (KORS) is an example.

Abbott Laboratories (ABT) is a benchmark pharmaceutical stock. The company’s fourth-quarter revenues missed consensus, while earnings excluding special items matched the Street. The only saving grace for the stock was the company’s announcement that it plans to buy back $2.0 billion of its own shares this year. Buybacks are a strategy employed by all kinds of large-cap companies that can’t beat consensus estimates.

Good news came from the railroad sector, and even if you aren’t interested in owning a railroad stock, what the industry reports is material to the U.S. economy and the domestic outlook.

Norfolk Southern Corporation (NSC) generated earnings growth of 24% in the fourth quarter of 2013 to $513 million, or $1.64 per diluted share.

The company said its fourth-quarter operating revenues grew a solid seven percent to $2.9 billion, with a 21% gain in chemical shipments, a 12% gain in metals and construction, and a 10% gain in automotive shipments. Coal was down only two percent, which was a surprise. The company experienced strong “crude by rail” shipments, as did other railroad companies.

For all of 2013, the company’s operating revenues grew two percent to $11.3 billion on a three-percent gain in overall traffic.

Annual earnings were $1.9 billion, or $6.04 per diluted share, up a solid nine percent from $1.7 billion, or $5.37 per diluted share. The railroad’s cash position improved substantially by year-end; so did shareholders’ equity.

Norfolk Southern’s share price moved up five percent on the day of its earnings release. Railroad stocks have been strong across the board, although CSX Corporation (CSX) was recently hurt by declining shipments of coal.

Most railroad stocks have actually led the main stock market indices, providing price strength and price consolidation in advance. On balance, I think we’ll likely get more consolidation from the group followed by another upward move in share prices.

Most railroad companies have experienced a boost to their year-end earnings estimates from Wall Street analysts. No doubt it’s a bet on a strengthening U.S. economy later in the year.

My two favorite railroad stocks are Union Pacific Corporation (UNP) and Canadian National Railway Company (CNI), whose largest individual shareholder is Bill Gates. (See “Railroad Stock to Own for 10+ Years the Next in Series of Core Holdings?”)

They aren’t the highest-yielding income stocks, but valuations aren’t off the map, either. With a material price retrenchment, a railroad company could be a welcome addition to a balanced equity portfolio.

These are old economy industrial stocks, but they still have significant earnings power when business conditions are good. Over the last few years, these stocks have been extremely profitable.

This article Are These the Only Stocks That Will Surprise This Earnings Season? Was originally published at Profit Confidential

By CentralBankNews.info
    Israel’s central bank held its benchmark interest rate steady at 1.0 percent, as widely expected, citing low inflation expectations, continued moderate economic growth, an appreciation of the shekel currency, moderate upward global growth revisions and a rise home prices and mortgages granted.
    The Bank of Israel (BOI), which cut its rate by 75 basis points in 2013, reiterated that it would keep a close watch on developments in asset markets, including the housing market, and continue to monitor the Israeli, the global economy and financial markets “particularly in light of the continuing uncertainty in the global economy.”
    Israel’s inflation rate eased to 1.8 percent in December, slightly below the BOI’s 2.0 percent midpoint of its 1-3 percent target range, from November’s 1.9 percent.