VIX Index Remains in Bullish Territory, $BPNYA Still Defensive

The market has remained relatively calm despite the correction
in the S&P500 since the election.  The VIX (Volatility Index)
is still in bullish territory.

Meanwhile, the NYSE Bullish Percent Index Continues to
flash Bull Market Correction since November 12.

New Team in China

Besides the new General Secretary, Xi Jinping, the other six members of the Standing Committee are: Comrade Li Keqiang, Comrade Zhang Dejiang, Comrade Yu Zhengsheng, Comrade Liu Yunshan, Comrade Wang Qishan, and Comrade Zhang Gaoli.

Comrade Li Keqiang served as a Standing Committee member of the Political Bureau of the 17th CPC Central Committee while other comrades served as members of the Political Bureau of the 17th CPC Central Committee.

http://www.businessweek.com/ap/2012-11-14/xi-jinping-takes-helm-of-china-amid-reform-calls

http://www.ft.com/intl/cms/s/0/8de22556-2eca-11e2-8bb3-00144feabdc0.html#axzz2CIrBGdlg

Transcript of Xi Jinping's speech

http://www.bbc.co.uk/news/world-asia-china-20338586

Market Correction Lowers Most Boats

The important indicator of market direction, NYSE Bullish Percent Index, showed "Bull Correction" on Monday, November 12.  Defence!

Homebuilders Not Holding Up

Pulte gave a sell signal yesterday.  MDC flashed sell on Friday.

Fiscal Cliff Equals Recession--AEI Pie Chart and PIMCO's Latest Analysis

http://www.pimco.com/EN/Insights/Pages/After-the-Election-Fiscal-Cliff-Outcome-May-Surprise.aspx

Home Builders Holding Up

Hovnanian Enterprises (HOV) did especially well today, despite the strong market selloff.  We still have Obama.  We still have QE3.  Homebuilders may continue their rally.  PHM, KBH, TOL, HOV, etc.  Just a thought.

Take Your Lumps--Exit Coal as Gracefully as You Can

We re-elected the coal killer.  Enough said.

Beyond Bernanke

An essay from PIMCO, looking beyond the event horizon.

http://www.pimco.com/EN/Insights/Pages/What-Would-Happen-at-the-Fed-Under-a-Romney-Presidency.aspx

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