Fwd: Trade This Potent Sector Snap-Back

---------- Forwarded message ----------
From: Rude Awakening <rude@agorafinancial.com>
Date: Tue, Aug 12, 2014 at 6:46 AM
Subject: Trade This Potent Sector Snap-Back
To: iammejtm@gmail.com

Utilities offer up a new trade August 12, 2014     Trade This Potent Sector Snap-Back   Utilities offer up a new trade A powerful comeback in the making Plus: What are small stocks telling us now?   Greg Guenthner coming to you from Baltimore, MD... Greg Guenthner Since the stock market first shows signs of weakness back in February, utilities have been one of the few go-to trades of the year. As our in-house trader Jonas Elmerraji calls it, the flight to yield has directed big money into stocks that pay dividends. All the income investments were screaming higher earlier this year--like junk bonds, emerging market debt, highly leveraged utilities, and REITs. And back in the spring, we noted that hedge funds had rotated out of growth and into value, with consumer goods, utilities, and energy stocks experiencing sizable inflows. When utilities in particular are seeing a big breakout, we noted, it's a signal that the market's retreating into its shell and going on the defensive. And sometimes the best offense is a good defense... But utilities quickly went from a hot trade to a hot mess back in June. The "safety trade" overheated, and utility shares started to quickly unravel. Over the course of only a month, this group of stocks dropped nearly 10%. Today, these stocks sit at a critical juncture. Utilities peaked in June as the S&P 500 continued to hit new highs. And these same utility stocks corrected by 10%, while the S&P dipped about 4% from July's peak to last week's lows... So can utilities bounce back? Yep. In fact, signs of a snap-back rally are already here. Just check out the chart... After a month of brutal punishment, the utilities are once again starting to show signs of life. Their quick race to the bottom was halted right at the long-term moving average. On Thursday, these stocks finally started sneaking higher. And Friday brought with it gains of nearly 2%. After all these stocks have been through this year, a bounce is looking more a more likely. Running the utilities trend through some pattern-recognition programs yields some enticing results. According to the results, the average 6-month return on the current price trend is close to 9%, with the sector rising almost 94% of the time. While that's no guarantee that this group of stocks will perfectly follow this plan, it is an extremely bullish indicator. This week is your best opportunity to take a shot at a strong utility snap-back move. Buy these names here for a solid, low-risk trade.         RUSSIA: Here's What the Biggest Heist in History Means for You Urgent: This presentation expires at midnight on 8/13   If you've ever submitted personal information to any businesses recently, your information could be in jeopardy. On Tuesday this past week, it was discovered that a Russian crime syndicate pulled off the biggest cyberheist ever recorded in history.   The numbers are staggering… with 1.2 billion usernames and passwords compromised. The director of a prestigious security company claims, "This is as messy as it can get…" But a security strategist who was employed by the U.S. Navy has a solution, and reveals what exactly it means for you.   Go here for his urgent findings.           Rude Numbers Targets, Predictions and Wild Guesses   $50 million is how much prominent tech venture capitalist Andreessen Horowitz just bet on BuzzFeed, a website dedicated to viral web content. $4 billion is needed to get water delivery pipes in Los Angeles repaired properly. According to Bloomberg, that's more than half the city's annual operating budget. $1 billion is going into Texas billionaire Richard Kinder's pocket. The value of his holdings in Kinder Morgan skyrocketed after he said yesterday that he would consolidate his companies, according to Bloomberg... 60% of all stocks trading on major U.S. exchanges are now above their respective 50-day moving averages... 446 companies in the S&P 500 have reported earnings so far this quarter, according to FactSet. Of these 446 companies, 73% have beaten earnings estimates.     Rude Trends When to Buy... When to Sell   For the past several weeks, we've noted just how terrible small-caps stocks have looked. The Russell 2000 small-cap index seemed to lag the large caps almost every single day--sometimes by a wide margin. But this hasn't been the case over the past few trading sessions. In fact, we're seeing the opposite. That's right. Those beaten-down small-caps that everyone loves to hate are beginning to show signs of life. Now don't get me wrong--I'm not losing my mind over this move. After all, it's only been a few days of outperformance. That doesn't mean you should back up the truck and bet it all on small-stocks rocketing back to their highs. However, you should keep moves like this one on your radar. Just look at how the Russell 2000 vaulted higher yesterday. By lunch, the small-cap index was up well over 1%, while the S&P 500was clinging to a 0.5% gain. It's early in the week--but it looks like this new trend of small-cap outperformance just might have legs. I'll keep a close eye on this situation and report back to you with any new developments. Remember, this isn't a definitive "buy every small stock in sight" signal --but it could be a clue that a small-cap (or overall market) rebound is on the horizon... [Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner]     Ignore At Your Own Peril Today's Must Read Links   China's $7 trillion jackpot... and it's buried right under the Great Wall! Milk worse than smoking? [shocking] Ex-Banker Makes Shocking Prediction for 2014     BE SURE TO ADD dr@dailyreckoning.com to your address book.       Additional Articles & Commentary: Join the conversation! Follow us on social media:         The Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Agora Financial delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from The Rude Awakening, click here. Please read our Privacy Statement. For any further comments or concerns please email us at rude@agorafinancial.com. If you are you having trouble receiving your Rude Awakening subscription, you can ensure its arrival in your mailbox by whitelisting The Rude Awakening. © 2014 Agora Financial, LLC. 808 Saint Paul Street, Baltimore MD 21202. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security they personally recommend to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

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Jeremy Tobias Matthews