It’s been a terrific year for IPO’s here in 2010 with a surge in high quality companies coming to market. A couple months ago I highlighted the Top 5 IPO’s, all of which are up significantly since being highlighted. I’ll probably do another Top 5 list in a month or so to include IPO’s since that report was written, but for now I wanted to highlight one IPO that I found to be very compelling – Sodastream (SODA).
Sodastream is an Israeli company that sells home carbonation and flavoring systems for.. you guessed it! Homemade soda and sparkling water. While I haven’t used the product myself, the idea is brilliant and rides the wave of three important trends – an increasing awareness of the need for better nutrition, a cleaner environment and saving money (in the long run). Three simple, but powerful trends.
Read Entire Post “Sodastream (SODA) Could Add A Pop To Your Portfolio” Here
Frederick Darren Berg, Seattle’s mini-Madoff, has now been formally charged in a massive Ponzi scheme according to the Seattle Times. The founder of the failed Meridian Mortgage investment funds which drew nearly $350 million in investments, orchestrated yet another Ponzi scheme. He was charged today with money laundering and nine counts of wire fraud. Prosecutors believe Berg defrauded investors in the mortgage funds out of nearly $100 million over the past 10 years by lying to investors about the health of the funds while financing a luxurious lifestyle that included yachts, private jets, a Mercer Island $8 million mansion and the funding of other business interests including luxury tour bus operator MTR.
Berg told investors in the largest group of Meridian funds their money would be used to buy properties, but it’s now clear that didn’t happen. In order to fool the auditors, Berg apparently opened dozens of PO boxes which he listed as the addresses of fictitious borrowers allowing him to sign the confirmation letters sent from the auditors and send them back.
Berg filed for personal bankruptcy back in July and has been cooperating. While he hasn’t been jailed yet, hopefully he’ll be getting three squares at another big house soon.
Gold continues to run up nearly every day, enticing a growing number of johnny come lately’s to join the party. You’ve seen the headlines.. Gold $2000, $4000/oz. Could we see those kinds of numbers? Maybe, but analysts that make those kinds of predictions are just looking to create publicity for themselves and publishers looking for a good headline.
I like to take a different approach and analyze it from a supply/demand angle using technical analysis. Late last year was my last detailed analysis of gold and I predicted that a top in gold could come at the 1200 – 1300 level.
“What I see happening is some kind of climactic run in gold over the course of a few months with gains of 20 – 30%. That’s not a number pulled out of a hat, but based on previous runs from previous bases. Notice how the farther up you get into the rally, the returns diminish as the base quality deteriorates. Take a look at any big move in a stock and you’ll see this similar pattern. It’s reasonable to assume that the returns from this breakout will be less than what we saw with the 2007 breakout.. so somewhere around 20 – 30%. If the price of gold gets into that 1200 – 1300/oz area I’d be looking for some major topping action! A climax run in gold over the next few months followed by massive selling on the part of institutions may be the end of a nearly 10 year bull run in gold.”
I expected gold would reach that level a bit earlier than it has, but we’re darn close to 1300 which happens to the next big level of resistance for gold and an area where a correction will likely take place. It’s much too soon to call $1300 a major top in gold and we could certainly take out $1300 at some point, but now is no time to be adding to gold and for many not a bad place to take some profits off the table.
Here’s a look at the current chart of the SPDR Gold ETF (GLD). Two important aspects of the chart to point out. One is the fact that GLD is overbought on the weekly chart once again. Take a look and see what happened to GLD the last four times we hit overbought on the weekly chart. The first time it led to a major correction of 30% in 2008 and three minor corrections since. We’re overbought again up around the 1300 level and it’s not out of the realm of possibility to see another 30% correction to test the bottom of the channel around 95 – 100. The second important component of this chart is that the 130 level coincides with resistance at the top of the channel (purple line)
===> You can get a free daily technical analysis of GLD here
Politics isn’t something I ordinarily get into on this blog, but couldn’t resist the gems that came from Obama’s mouth today.
“We also hoped for a chance to get beyond some of the old political divides – between Democrats and Republicans, Red states and Blue states – that had prevented us from making progress. Because although we are proud to be Democrats, we are prouder to be Americans – and we believed that no single party has a monopoly on wisdom.”
This gem of hypocrisy was stated early on today, right before he spent nearly an hour berating Republicans (John Boehner in particular) for the current mess we’re in. So much for helping to close the divide.
I nearly fell out of my chair today when I heard this statement:
“I have a different vision for the future. I’ve never believed that government has all the answers to our problems. I’ve never believed that government’s role is to create jobs or prosperity. I believe it’s the drive and ingenuity of our entrepreneurs, the skill and dedication of our workers, that has made us the wealthiest nation on Earth. I believe it’s the private sector that must be the main engine of our recovery.”
It doesn’t take long for him to contradict himself saying, “We want to put more Americans back to work rebuilding America – our roads, railways, and runways.”
It gets better.. much better..
“I believe government should be lean, it should be efficient, and it should leave people free to make the choices they think are best for themselves and their families, so long as those choices don’t hurt others.”
Read Entire Post “Best Of Obama Speech Today: "Government Should Be Lean"” Here
We’re more than half way through 2010 and this year has seen a significant pickup in the number of quality IPO’s, so I thought I’d rank the top 10 up to this point in the year based on fundamentals. Part I will highlight the first five, part II the next five and I’ll follow that up with a report taking a look at some of the most promising IPO’s that may begin trading in the last quarter.
Camelot Info Systems (CIS): This is the highest rated IPO that I currently track with a fundamental score of 29/30. The company provides enterprise application services and financial industry information technology (IT) services in China. It’s the largest provider of enterprise resource planning in China and names HP, Accenture and IBM as customers.
Camelot has posted significant growth every year it’s been in business and that growth continues today despite a shaky world economy. In 2009, they experienced EPS growth of 60% and is posting record growth again this year with an estimated 113% growth for 2010. Revenue growth has accelerated in each of the past four quarters.
Technically, the stock remains extremely bullish, but very overbought in the shorter term. After a month long flat base formation, the stock exploded higher Aug 18th and hasn’t looked back. It’s up nearly 50% in under two weeks and buy volume continues to come in above average. It’s best to look for a retracement of about 50% from the breakout point above $11, so a return to the $12 – 13 area would provide an ideal entry point.
====> Click Here For Your FREE Daily Camelot Technical Analysis
Read Entire Post “Top IPO’s Of 2010 (Part I) – CIS, ONE, FNGN, GDOT, SPSC” Here
Everybody wants to know where gold is headed and it remains one of the most talked about trades. More recently I’ve begun to hear family and friends discuss purchasing gold stocks and the actual metal itself. That usually doesn’t bode well for any trade especially after the run gold has had. So where might it be headed in the coming weeks and months?
As always, I turn to the charts for some clues and Adam from Market Club gives us a video analysis as well. While he uses some different indicators, we both arrive at about the same conclusion.. that gold is still undergoing a correction and the best strategy is to step aside until a new buy signal is provided.
Below is a chart of the SPDR Gold Trust (GLD) which seeks to track the price of gold. You’ll notice the parabolic move at the end of last, followed by a 20% correction and return to test the all time highs. While gold held up at those lofty levels for nearly two months, it has since taken out support at the 2009 highs and is in the process of a correction.
Read Entire Post “Gold Correction.. How Far? (GLD)” Here
About six weeks ago I mentioned that you might want to look for a BIG head and shoulders formation in indices just days after the infamous “flash crash” day. About one month later, the right neck line was complete after another test of the lows of the correction, kicking off a weak rally into resistance of the 50 day moving average and around the left shoulder. In the case of the Nasdaq which you see below, that was the area around 2326 – 2350. The Naz would ultimately fail around the 2340 level following a significant reversal day on June 21st. It should be noted that the Dow did fail at exactly the 50 day moving average on June 21st. That was signal to begin locking in profits and shorting the market if you’re a trader or offering another chance to raise significant cash if you’re more of an investor. I still don’t think it’s too late to do so.
Read Entire Post “Nasdaq Confirms Head & Shoulders Top” Here
The analogy I had been using over the past few months to describe the action in the market to my members is that of a majestic skyscraper, each story beautifully built, higher and higher to the heavens. Just one problem.. they skimped on the foundation. So, as the glorious skyscraper neared the heavens, the foundation began to crack, piece by piece by piece with each passing day. As dignitaries and VIPs arrived to celebrate the completion of this majestic masterpiece with a ribbon cutting in Ben’s Liquidity Lounge, it tilted ever so slightly. It was barely noticeable, but those that did, chalked it up to thin air and one too many trips to the punch bowl.
The charts never lie. As the rally continued to soar to epic heights, the charts began to reveal the warning signs well ahead of the crash. Granted, this has been a historic, Fed fueled, artificial rally where minor topping patterns failed again and again as the market pushed higher and higher with considerably less conviction. That began to change in January, when institutions began to unload positions which was revealed in the heavy volume on the sell side. I have to admit, I thought there was a very good chance of topping in February following the January plunge, but was forced to abandon the plan to get aggressively short on March 4th.
I sent the following note to members:
Read Entire Post “Anatomy Of A Market Meltdown; Potential Head & Shoulders Pattern” Here
What a day today. It began like so many in the past few months with low volatility and volume. Another lazy Friday. Then the big sell spike came just after 10:30AM EST. Moments later the reason for the sell spike hit CNBC and an ordinary Friday turned into Freaky Friday. The SEC was filing a civil fraud suit against Goldman Sachs (GS). Rarely a dull moment in the stock market eh?
The Goldman Sachs (GS) fraud charge by the SEC is big news and the blogosphere is buzzing with opinion as the facts continue to come out. This won’t go away anytime soon and I’d imagine the SEC is out to prove it’s new and improved and ahem… actually doing its job. Of course this may lead to overreactions and firms and individuals will be made examples of to prove they mean business. Going after Goldman certainly makes a statement.
Read Entire Post “Buried In Goldman Sachs (GS) Fraud Buzz – SEC’s Failure On Stanford Ponzi” Here