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Janet Yellen, Rate Hikes and Utility Stocks

The Fed Chair, Janet Yellen, was very clear on Tuesday and Wednesday this week that while the FOMC may remove the word “patient” from its statements, that did not mean they were going to raise rates in the short term. That may or may not be true, but we know that expectations did continue to shift following those comments. On the one hand, traders seem to be taking her at her word and have priced in a rate hike for October 2015, rather than June or September. However, on the other hand, expectations that rates will be hiked (when that finally happens) beyond .5% have also grown. (more…)

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Idaho Sen. Mike Crapo — Reading Between the Lines (FNMA)

Many of us have held positions in FNMA over the last year or so. It was a nice ride and continues to have a surprising amount of support. Although mostly liquidated, I do hold out some hope by maintaining a small position. This motivates me to keep fighting for FNMA. Recently I sent a protest letter to ID Senator Mike Crapo. You can see the letter here. (more…)

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Extreme in Bearish Market Breadth presents opportunity for Bulls (SPY)

The drop in the markets over the last 2 days had pundits like Nouriel Roubini calling the action the “mini Perfect storm.” According to a Business Insider interview with Roubini, the weak data in China, the currency market turmoil in Argentina, and a worsening situation in Ukraine were the combination to trigger the market response. Treasury bonds staged a nice gain, as the risk-off flight started to increase its pace during the 2 day market selloff, as it rose from 105.30 up to 107.48. (more…)

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Trading a Head and Shoulders in Yields

The yield on 10-year Treasury bonds has been forming a long-term reversal signal known as a head and shoulders pattern. This pattern is an important one in the financial markets and is reliable enough that even the New York Federal Reserve has noted [PDF] its predictive nature. However, the yield on the 10-year Treasury bond is impossible for most individual investors to trade. (more…)

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Buy Apple on the next dip to $490

The turnaround in Apple’s stock over the last several weeks and months should not be left unnoticed. From July 1st to Aug 16th, Apple made a move from $390 up to $512. A 31% gain in the shares in a month and a half. That’s a resounding change in sentiment considering it made a decline from $700 to $385 from Sept ’12 to April ’13. (more…)

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Starbucks – The Biggest Bull

The US markets are in a bull run. Dow Jones and S&P 500 are strong and the next two years is all about US markets. The markets are recovering with employment numbers giving positive signs. Also, Bernanke has announced tapering means the volatility and lengthening of business cycles would not be there anymore. Yes, there were earnings downgrades, which may take markets to halt for sometime. The earnings for next quarter are expected to be better according to my analysis. The money in the world is going to US from everywhere. The only thing to invest at this time are equity markets, the commodity area is sluggish and there may be soon a fall in commodity markets. (more…)

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Spike in Treasury Yields sends CYS (REIT) to Attractive valuations

CYS shares (a mortgage REIT) dropped a precipitous 8% today (to as low as $8.09 today). One of several serious distribution days over the past 5 sessions. So what’s the reason for the drop? I’ll do my best to help frame it for you, and provide a compelling reason why we should be buyers of this drop. (more…)

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