Apple Resumes Its Correction--Target 565

After its previous breakdown, Apple bounced strongly, giving a false low pole reversal signal.  Following the market close on Thursday, Apple released their earnings and guidance, resulting in Friday's double-bottom breakdown.  The P&F Chart bearish target is 565.

Touting Coal (3)

Taking a position in coal while the fog is thick regarding the election results is likely to reward better than waiting until there is certainty. Use risk management accordingly.

James River Coal Company (JRCC) is based in Richmond, VA. Recently, they have been losing money, but their cash position is pretty strong (Current Ratio 2.33, Quick Ratio 1.92).  The shares are priced at 0.6 times the Book Value.

Touting Coal (2)

Peabody Energy (BTU) is the world's largest private-sector coal company.  Like Arch Coal, their corporate headquarters are in St. Louis, MO.

http://www.peabodyenergy.com/content/113/Peabody-at-a-Glance

Touting Coal

A Romney victory could see a new energy policy in Washington, one intended to produce 'energy independence.'  This may put an end to the strangulation of American electricity production using coal.  Although the coal picture is complicated, here are some coal producers that have been showing life.

Arch Coal represents roughly 15% of America's coal supply. It is one of the top 5 coal producers in the world.  The Hunt family of Dallas figures prominently in the history of Arch Coal, and Douglas H. Hunt serves on the Board of Directors.  According to SEC filings, he has been accumulating options for the past several years, currently owning 76,469 shares.

http://www.archcoal.com/aboutus/history.aspx

http://www.secform4.com/insider-trading/1046083.htm

Apple's Low Pole Reversal--Correction Ending?

The low pole reversal is seen when a chart falls below a previous low by at least 3 boxes but then reverses to rise by at least 50 percent of the fall. The reversal implies that the supply that was making the prices fall has been absorbed and demand is taking over. The pattern is an alert that higher prices could be seen in the future. The ideal buy point would be on another reversal back down to be closer to the stop loss point. This would also set up a double top breakout if the prices reverse up and break over the current column's high.

Apple Correction Continues

Bearish Price Objective 565, according to P&F Chart

From Ed Yardeni’s Blog—Insight into China/Japan auto trade

Dr. Ed's Latest

Fed Beige Book Notes Improved Housing Numbers

Here is the latest data from around the country.

Beige Book (for your reading pleasure)

Only Game in Town!

S&P Case-Shiller Index--Today's Press Release

Atlanta housing prices have declined nearly 10% in the last year.  Worst in the nation.

Today's news release from Standard & Poor's

Tom's Tealeaves--Educational Material

A tool for predicting recessions is the inverted yield curve. Jonathan Wright's Model comes to us from the following 2006 paper.  Warning:  there is calculus in it.

http://www.federalreserve.gov/pubs/feds/2006/200607/200607pap.pdf

Ed Yardeni Was Pru-Bache's Economist back in 1982

After market risk, the most influential factor in the performance of a stock is the sector performance (or sector risk).
Stan Weinstein (Secrets for Profiting in Bull and Bear Markets, page 338) recommends that you:

1. first determine the direction of the market;
2. then select the top-performing sectors; and,
3. finally, select the best stocks from within those sectors.

Ed Yardeni has provided a timely and informative analysis of S&P500 sector performance for your reading pleasure.

http://www.yardeni.com/pub/PEACOCKPERF.pdf

For those who need an update on Ed Yardeni, see below:

http://www.yardeni.com/pub/ey_bio_2.pdf

Hans Redeker of Morgan Stanley

Click on this link for Redeker on CNBC today.

NAHB Sentiment and Home Builder Stocks

Strong correlation since 2005

Relationship between USD/JPY and 10-yr Treasury Yield

The USD/JPY has been following 10-year Treasury yields

rather closely for the past couple of years.

Courtesy Kathy Lien, BK Asset Mgmt.

Woodford's Paper Delivered at Jackson Hole

Michael Woodford is an expert on monetary policy from Columbia University.  After Bernanke's statement, this is probably the most widely read and commented upon.

http://kansascityfed.org/publicat/sympos/2012/mw.pdf

Hatzius Nails It on TV--Too Bad I Missed the Broadcast

High Pole Warning for Long Bonds as Fed Walks QE Tightrope

The high pole warning is given when a chart rises above a previous high by at least 3 boxes but then reverses to give back at least 50 percent of the rise. The reversal implies that the demand that was making the prices rise has given way to supply pressure. The pattern is a warningthat lower prices could be seen in the future.

Today's Fed Statement Buying MBS $40 billion a month

You might wanna read dis.

http://www.federalreserve.gov/newsevents/press/monetary/20120913a.htm

What is the European Central Bank's new OMT?

Something we need to be aware of.