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WEEKLY MARKET DIGEST: NASDAQ AT ITS BEST LEVEL IN 13.5 YEARS BUT RISKS ARE RISING, GOLD MOMO CROWD BUYS INTO RESISTANCE $GLD $SLV $USO $DIA $SPY $QQQ $TBF $TBT

February 21, 2014

(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. ) NASDAQ AT ITS BEST LEVEL IN 13.5 YEARS BUT RISKS ARE RISING, GOLD MOMO CROWD BUYS INTO RESISTANCE February 21, 2014 Nasdaq is at its best level in 13.5 years. S&P 500 is close to making a new high. However as explained in yesterday’s morning capsule, risks have risen. Gold momo crowd is back buying heavily into resistance. As has been the case over the last three years, the behavior of the momo crowd is nontraditional.

SMART MONEY SELLS INTO MYLAN RISE FOR A GOOD REASON $MYL $FRX $ACT $TEVA

February 21, 2014

Since the Feb. 18 announcement that Actavis would acquire Forest Laboratories for about $25 billion, which caused Forest Laboratories stock to leap higher, Mylan stock has been moving up strongly in sympathy on speculation it, too, could be bought. However, the Smart Money has been selling Mylan into the strength, and with good reason. The annotated chart shows the strong rise after the Forest news and short-term technical picture. Please click here to see chart of Mylan The problem in this case is that such speculation is without any basis in fact and is ill informed. Let us start out by examining

WAL-MART EARNINGS $WMT

February 20, 2014

This post was just published on ZYX Buy Change Alert. WMT is long from $58.88. As of this writing the stock has fallen to $72.89 on poor earnings. The poor earnings appear to be temporary in nature. The new buy zone is $65. to $70.11. What To Do Now? Those in the stock may continue to hold. Those not in the stock may consider scaling in on a dip into the buy zone.

INITIATE OR ADD TO S&P 500 SHORT $SPY

February 19, 2014

This post was just published on ZYX Short Change Alert. Consider initiating or adding a 10% tranche to SPY short position in the zone of $183.20 to $184.50. No stop for the time being.

ADDING TO NATURAL GAS SHORT $UNG $DGAZ $BOIL $NG_F

February 19, 2014

This post was just published on ZYX Short Change Alert. Consider adding a 10% tranche to natural gas short position in the zone of $6.16 to $6.55. It is trading at $6.26 as of this writing, equivalent in UNG is $27.55. The equivalent in BOIL is $55.72. Those using inverse ETF DGAZ may consider adding in the zone of $2.60 to $2.92.

INITIATE HERCULES OFFSHORE IF NOT IN IT $HERO

February 18, 2014

This post was just published on ZYX Buy Change Alert. The position is long with an average price of $2.55. Currently, 50% of the full core position size is being held. Profits have been taken as high as $6.00 HERO is in the business of shallow water drilling for oil and gas in the Gulf of Mexico. The stock has pulled back due to a significant drop in day rates. However this drop is likely to be temporary and day rates are likely to go up again in late 2014 to 2015. A director of HERO just took advantage of the

SMART MONEY SELLS INTO INSANE CRAY RISE $CRAY $IBM

February 18, 2014

On Friday, Feb. 14, Cray Inc. CRAY experienced a meteoric rise of about 39%. Smart money took advantage of the strength and sold aggressively. Cray is in the business of super computers or high-performance computing (HPC). Let us start with a chart. As the chart shows, the stock closed at $41.66 up 11.69% on volume of 4.82 million compared to the average volume over the past three months of 451,000. The stock market is supposed to be a discounting mechanism, in other words, at least old news is expected to be discounted in the price. In the case of Cray, the stock

WEEKLY MARKET DIGEST: GOLD APPROACHES RESISTANCE AT $1320 AFTER BAD INDUSTRIAL PRODUCTION NUMBERS $GLD $SLV $USO $DIA $SPY $QQQ $TBF $TBT

February 15, 2014

(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. ) GOLD APPROACHES RESISTANCE AT $1320 AFTER BAD INDUSTRIAL PRODUCTION NUMBERS February 14, 2014 January Industrial Production fell to -0.3% compared to consensus of +0.3%; Capacity Utilization for January came at 78.5% vs. consensus of 79.3%. These are very bad numbers. Gold is encouraged by these bad numbers and now is approaching the resistance of $1320 to $1325. Oil is falling on these numbers so are interest rates. In early trading stocks are mildly negative. Gold futures are at $1318, silver