The economy has been growing, albeit slowly, over the past six years, and the biggest banks have managed to survive and even thrive in some cases. But there’s a canary in the coal mine that’s giving me pause… one that no one is talking about. #-ad_banner-# Looking back at the recovery, I noticed an eerie phenomenon that could foretell the future for large banks. According to the Federal Deposit Insurance Corporation (FDIC), more than 455 banks have collapsed since the Great Recession… Read More

The economy has been growing, albeit slowly, over the past six years, and the biggest banks have managed to survive and even thrive in some cases. But there’s a canary in the coal mine that’s giving me pause… one that no one is talking about. #-ad_banner-# Looking back at the recovery, I noticed an eerie phenomenon that could foretell the future for large banks. According to the Federal Deposit Insurance Corporation (FDIC), more than 455 banks have collapsed since the Great Recession ended in June 2009. Depending on how closely you follow the banking sector, that may or may not seem like an astronomical number. So let me put it into context for you: In the six years before the recession began, there were 21 bank failures, and during the recession, only 70 banks went under. You’d think it would be the other way around, with the recession taking out all the weak banks and the recovery helping to keep closures at a minimum. At the very least, you’d expect a healthy recovery to spur new bank charters, but that hasn’t been… Read More

The Chinese government thought it could outwit investors and foreign governments with its overblown economic growth figures, currency manipulation and complex market meddling… but the country’s game of smoke and mirrors is finally coming to an end. Bearish bets are piling up, and it’s only a matter of time before the house of cards comes tumbling down.  #-ad_banner-#My subscribers and I watched — and profited — as the country’s stock market collapsed in 2015. Here’s how we’ll profit again from a similar situation… China’s currency, the yuan, has been on the decline against the dollar and other currencies for some… Read More

The Chinese government thought it could outwit investors and foreign governments with its overblown economic growth figures, currency manipulation and complex market meddling… but the country’s game of smoke and mirrors is finally coming to an end. Bearish bets are piling up, and it’s only a matter of time before the house of cards comes tumbling down.  #-ad_banner-#My subscribers and I watched — and profited — as the country’s stock market collapsed in 2015. Here’s how we’ll profit again from a similar situation… China’s currency, the yuan, has been on the decline against the dollar and other currencies for some time. The currencies of weak countries can lose a tremendous amount of value relative to the currencies of countries with strong economies and less “accommodating” monetary policies (like the United States). Perhaps the most ironic piece of this story is the fact that, for years, the Chinese government purposefully kept the yuan artificially weak relative to other currencies in order to stoke its export market and drive competition away. A relatively cheap currency is good for exports because countries with relatively stronger currencies — like the United States — can afford to buy more goods. Big exporting countries like China… Read More

The market logged one of the worst starts to a year with the S&P 500 down more than 5% in January. This doesn’t bode well for the rest of 2016. According to the Stock Trader’s Almanac, a win or loss in January has accurately predicted the course of the year more than 75% of the time. Whether or not you believe in the so-called “January Effect,” there’s a lot working against the bulls. Namely, revenues for companies in the S&P 500 have declined for four consecutive quarters, and we have gotten confirmation of an earnings recession with two quarters of… Read More

The market logged one of the worst starts to a year with the S&P 500 down more than 5% in January. This doesn’t bode well for the rest of 2016. According to the Stock Trader’s Almanac, a win or loss in January has accurately predicted the course of the year more than 75% of the time. Whether or not you believe in the so-called “January Effect,” there’s a lot working against the bulls. Namely, revenues for companies in the S&P 500 have declined for four consecutive quarters, and we have gotten confirmation of an earnings recession with two quarters of declining profits. #-ad_banner-#Much of this is being blamed on the stronger U.S. dollar, which makes foreign sales worth less. In the past two years, the euro has lost 20% of its value against the dollar. This means that an American company that sold $1 million worth of goods in Europe in 2014 is now getting just $800,000 for those same sales. To maintain the same level of profitability, companies could increase the price of goods. So, the same iPhone that cost 500 euros in 2014 would now cost 625 euros. This kind of price increase usually turns off customers, though,… Read More

Panic can lead humans to make very poor decisions. In the heat of the moment, we tend to revert to our most basic fight-or-flight instincts. For instance, in a market sell-off, when stocks keep going further and further down, many investors just want the pain to stop… so they sell, locking in a loss but ending the burden of the unknown. Unfortunately, that’s often the worst decision they can make. Stocks usually recover from market panics when investors finally come to their senses. It doesn’t always happen exactly like this, but the point is that panic can send stocks into… Read More

Panic can lead humans to make very poor decisions. In the heat of the moment, we tend to revert to our most basic fight-or-flight instincts. For instance, in a market sell-off, when stocks keep going further and further down, many investors just want the pain to stop… so they sell, locking in a loss but ending the burden of the unknown. Unfortunately, that’s often the worst decision they can make. Stocks usually recover from market panics when investors finally come to their senses. It doesn’t always happen exactly like this, but the point is that panic can send stocks into oversold territory without solid fundamental reasoning. Small-cap stocks are extremely sensitive to market panics and tend to be scapegoats for market stress. That’s what we’re currently seeing in the Russell 2000. The index has already fallen 10% this year, putting it more than 20% below its 52-week high and in extremely oversold territory. #-ad_banner-# While its problems may not be over, I think we’ll get a snapback rally over the next few months that could deliver double-digit profits to those who have the… Read More

If there’s one lesson that stands out among all those I’ve learned in my 20 years of trading, it’s that even the best research, resources and skills can’t guarantee success. When I was coming up as a pit trader, I was fortunate enough to work alongside and learn from some of the best traders that have every played the market. Many generously revealed their favorite metrics and secret tips to finding market trends and picking the best stocks.  #-ad_banner-#But the thing we never talked about was how often or how badly they lost on trades. Unbeknownst to me, this was… Read More

If there’s one lesson that stands out among all those I’ve learned in my 20 years of trading, it’s that even the best research, resources and skills can’t guarantee success. When I was coming up as a pit trader, I was fortunate enough to work alongside and learn from some of the best traders that have every played the market. Many generously revealed their favorite metrics and secret tips to finding market trends and picking the best stocks.  #-ad_banner-#But the thing we never talked about was how often or how badly they lost on trades. Unbeknownst to me, this was a critical part of the equation, and one that most market gurus never address. I remember feeling inadequate because, as hard as I tried, I still couldn’t pick winners 100% of the time. It wasn’t until I became an options market maker that I learned how to add real odds to my trading. As a market marker, I was required to trade hundreds of contracts on a daily basis. For every trade I took, I was trying desperately to time the market so I could gain a sliver of an advantage. One of my competitors, a trader named Brett, noticed… Read More

As the S&P 500 peaked last week, I issued a bearish alert to my Profit Amplifier subscribers. We are already up more than 50% on the trade I recommended, but I see much more downside to come in the market.  And that could mean big profits for those of you reading this right now. Many of you may not be aware of it, but we are currently in a recession. It’s not a full-blown economic recession (yet), but it is an earnings recession.  At the end of last week, 444 of the S&P’s 500… Read More

As the S&P 500 peaked last week, I issued a bearish alert to my Profit Amplifier subscribers. We are already up more than 50% on the trade I recommended, but I see much more downside to come in the market.  And that could mean big profits for those of you reading this right now. Many of you may not be aware of it, but we are currently in a recession. It’s not a full-blown economic recession (yet), but it is an earnings recession.  At the end of last week, 444 of the S&P’s 500 companies had reported Q3 earnings. According to FactSet, the blended results (actual results for companies that have reported plus estimated results for companies that have not reported) showed a 2.2% decline versus Q3 2014. That’s even worse than the second quarter, which ended the season with a 2.1% decline in earnings. #-ad_banner-# If Q3 earnings growth is still negative once everything has been reported — and it looks like it will be — it will be the first time we’ve seen consecutive quarters of earnings declines since 2009. To make matters worse, analysts expect a 3.7% drop in… Read More

Whole Foods Market (Nasdaq: WFM) isn’t winning any popularity contests lately. On top of being sardonically dubbed “Whole Paycheck,” the natural and organic foods grocery chain has seen its stock price nearly cut in half this year. A pricing scandal, expansion costs, growing competition and slowing same-store sales have weighed on the stock. And last week, shares got hammered when the company reported earnings that missed analysts’ estimates and posted its first same-store quarterly sales decline since 2009. The post-earnings headlines were dismal, and many investors probably wouldn’t touch Whole Foods with a 10-foot pole right now. But… Read More

Whole Foods Market (Nasdaq: WFM) isn’t winning any popularity contests lately. On top of being sardonically dubbed “Whole Paycheck,” the natural and organic foods grocery chain has seen its stock price nearly cut in half this year. A pricing scandal, expansion costs, growing competition and slowing same-store sales have weighed on the stock. And last week, shares got hammered when the company reported earnings that missed analysts’ estimates and posted its first same-store quarterly sales decline since 2009. The post-earnings headlines were dismal, and many investors probably wouldn’t touch Whole Foods with a 10-foot pole right now. But based on its attractive valuation and two bullish catalysts, I think the stock is a screaming “buy.” #-ad_banner-# An Oversold Turnaround Ironically, Whole Foods’ recent poor performance may be the key to the company’s success. This latest earnings miss really puts management in the hot seat. They must take dramatic action or face more retaliation from investors. And management has already begun to take steps in the right direction. Last month, in an effort to cut costs, the company said it would eliminate 1,500 jobs, about 1.6% of its workforce. Then, on Wednesday, management announced a $1 billion… Read More

The market is about to get crazy. Over the next month, stocks both large and small are going to be volatile. They’ll bounce around 10%, 20%, even 35% or more in a single day. This “volatility season” was built into the financial system over 80 years ago by the U.S Securities and Exchange Commission (SEC), and there’s nothing you can do about it. It’s inevitable. It’s more commonly known as earnings season. Earnings are the true drivers of stocks, and I have good reason to believe a lot of companies are going to report lackluster results. For the next few… Read More

The market is about to get crazy. Over the next month, stocks both large and small are going to be volatile. They’ll bounce around 10%, 20%, even 35% or more in a single day. This “volatility season” was built into the financial system over 80 years ago by the U.S Securities and Exchange Commission (SEC), and there’s nothing you can do about it. It’s inevitable. It’s more commonly known as earnings season. Earnings are the true drivers of stocks, and I have good reason to believe a lot of companies are going to report lackluster results. For the next few weeks, we’re likely to see one-day stock moves of 5% to 15%-plus more frequently. This can result in quick losses or gains — depending on how you’re positioned. If you could accurately predict whether a company will beat or miss earnings estimates before its quarterly report, then you could profit from the post-report move. Over the years, I’ve developed a proprietary earnings algorithm that helps me do just that. With it, I have been able to predict — with good odds — whether a company’s earnings will beat or miss the consensus. For instance, in mid-October, my earnings algorithm predicted… Read More

As an avid motorcycle rider and Harley enthusiast, it almost feels like sacrilege to bet against Harley-Davidson (NYSE: HOG). But with a seasonal sales lull on the way, increasing competition and too-rich valuations, I’m expecting continued weakness from the iconic motorcycle manufacturer. The good news is I’ve got the perfect strategy to capitalize on it.  Harley is the world’s largest manufacturer of heavy motorcycles, but it’s hardly invincible. #-ad_banner-# Case in point: On Oct. 20, the company reported third-quarter net income… Read More

As an avid motorcycle rider and Harley enthusiast, it almost feels like sacrilege to bet against Harley-Davidson (NYSE: HOG). But with a seasonal sales lull on the way, increasing competition and too-rich valuations, I’m expecting continued weakness from the iconic motorcycle manufacturer. The good news is I’ve got the perfect strategy to capitalize on it.  Harley is the world’s largest manufacturer of heavy motorcycles, but it’s hardly invincible. #-ad_banner-# Case in point: On Oct. 20, the company reported third-quarter net income fell 6.5% year over year, while diluted earnings of $0.69 were flat and missed analysts’ estimates by 11.5%. Revenue also came up short and management lowered shipment guidance. Shares plunged 14% on the day as investors rushed for the exits. That day, the company also announced it would lay off 250 employees, about 4% of its workforce, increase marketing spend and work to expand its network of dealerships. While these tactics may pay off in the long run, they will cost money in the short term. Harley expects to spend $30 million to $35 million on the layoffs alone in… Read More

Once a stock market darling, Apple (Nasdaq: AAPL) has fallen into an undeserved funk. Earnings are expected to be reported Tuesday after market close, and even though my proprietary earnings algorithm is forecasting a beat for the tech giant, the stock has a reputation for being unpredictable following its reports. The good news is that with a little statistical analysis and the right strategy, we can greatly increase our chances of profiting from Apple’s post-earnings move — even if the stock doesn’t move higher. #-ad_banner-#​In fact, all AAPL has to do is stay above… Read More

Once a stock market darling, Apple (Nasdaq: AAPL) has fallen into an undeserved funk. Earnings are expected to be reported Tuesday after market close, and even though my proprietary earnings algorithm is forecasting a beat for the tech giant, the stock has a reputation for being unpredictable following its reports. The good news is that with a little statistical analysis and the right strategy, we can greatly increase our chances of profiting from Apple’s post-earnings move — even if the stock doesn’t move higher. #-ad_banner-#​In fact, all AAPL has to do is stay above $107 and today’s trade will deliver a return of more than 15% in less than a month’s time. Apple Skittish After Earnings After kicking off 2015 with a 20% rally to its late-February highs, AAPL traded in a sideways pattern for most of the spring and summer, unable to break to new highs.  During the late-September correction, shares fell below previous support and failed to bounce back. The stock now trades in a new channel with resistance around $117. Despite posting record iPhone sales and beating analysts’ estimates on both the top and bottom line in the most recently reported… Read More