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Market
Comment- V Bottom Suggests Higher Levels Imminent |
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The current rebound in the market
has been breathtaking and extended beyond most people's expectations. The
DOW was up 8.4% this week alone, the best one week performance since 1982.
The "V" bottom formation depicted
in the chart has now been repeated five times during the bear market: Oct
2002, July 2002, Sept 2002, March 2001, and now.
In each case, the market rebounded
to the point at which the breakdown had started, stalled out temporarily,
then surged far higher than expected.
Yesterday the market "filled the
gap" created when the current breakdown began on January 16th.
If the "V" bottom repeats the same
pattern established during the previous four adventures in this bear market,
we can expect a short breather, and a move considerably higher. The October
rebound in the NASDAQ took the index 240 points higher from the point at
which the index broke support.
If we grind sideways for a couple
of days look for a trading recommendation on the long side. It's too risky
to enter now. A slight pullback and renewed fear would be healthy for continuing
advancement to the upside. When the media reports it was "just a short
covering rally" and the earnings outlook is bleak, that will be the time
to look to take a long position.
The market is absolutely giddy over
the seemingly quick end to the war in Iraq. As we write the weekend edition,
the media is confirming coalition troops have complete control of Iraqi
oil fields with minimal damage. This is the best news the market could
get. It could be all over by the end of the weekend.
Technicals currently dominate trading
strategies over fundamentals.
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Looking For
Dividend Yield? - Consider Teco Energy (NYSE: TE) |
|
If you're unhappy with the 1% you're
getting in your money market account, and willing to take a little risk
for a better yield, consider investing in TECO Energy (NYSE: TE).
TECO
pays an annual dividend of $1.42. Based on Friday's closing price
of $10.95, this hybrid utility/energy company's stock is paying a 12.97%
annual cash dividend.
In 2002 TECO's revenues rose
8% to $2.68 billion. Profits rose 9% to nearly $300 million, or $1.99 per
share. The company has a variety of energy related operations all over
the South East, and owns the Tampa Electric Company and the People's Gas
System division of Tampa Electric.
The stock dropped recently when Moody's
announced it would review the credit rating of the company's debt. However,
TECO's
cash level at the end of 2002 reached $411 million, up from $108.5 million
at the end of 2001, suggesting the balance sheet is strong.
Energy delivery companies have been
weak in the last year as deregulation of the utilities industry and the
misdeeds of energy trading companies have cast a pall over the group.
The dividend is very attractive in
this low yield environment, and the stock is only $1.48 above its all time
low of $9.47. Investors can assume some negative news is already priced
into TECO with the yield at 13%. If the company were to get a lowered
debt rating or reduce its dividend, the stock might actually go up if the
news weren't too terrible. A good Stop Loss- $9.46- which would be a new
low.
In short- worth the risk for the
yield and potential appreciation of the stock with your medium risk capital.
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Member's
Forum |
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Tons of mail on Wednesday's
edition entitled Bush's Big Bet- Both Sides of the Story on War
With Iraq. Many seemed to think our piece was slanted against the
war, which was not our intention. We were simply sharing points from both
sides which we felt the media was not adequately presenting. Here are some
of the representative comments. Sorry we can't publish them all.
Members' Forum
Please do your
research before you do your political spiels under the guise of "economic
impact" from the Bush administrations policies. Unprovoked attack?
It is on record the Saddam not only supported the 9/11 terrorists but let
them train in Iraq. He provided a commercial airliner for them to
learn how to break into the cockpit and Iraqi citizens were furnished as
the planes' "crew". This is enough provocation to merit the invasion.
Killing literally thousands of his own people with WMD (these dead folks
did not care that they weren't nuclear) is enough provocation for me as
well as 71% of Americans. I have no problem with your disagreement
with Bush policies, the voice of dissent helps keep America on the straight
and narrow, but let's be careful that our biases (yours or mine) do not
cloud our judgment or cause us to misrepresent the facts.
Richard S
The most important
goal to be achieved with the war and subsequent occupation of Irak is the
establishment of a strong military force in the Middle East, with the capability
of deploying overwhelming force in a matter of hours and with the ability
to crush any terrorist organization in its cradle.
The United States Armed Forces
are the natural, and only, organization capable of fulfilling this role
of Global Policeman, and all of us - free men of the world - are deeply
grateful to George Bush for having the vision and the courage to commit
his country, as well as his personal fate, to the fight against terrorism
and to the achievement of stability in that troubled region. The rest of
the arguments, in favor or against, are purely academic.
Mario N
Buenos Aires
I don't know
where you get your information, but it doesn't jive with my own research.
For instance, we do not receive 80% of Iraq's oil. France and Russia may,
but we do not. You failed to mention that France and Russia have been in
violation of the UN sanctions for years and currently have HUGE contracts
with Iraq, mainly for oil. You also fail to mention that for 12 years these
same entities (France, Germany, and Russia) have blocked the UN from taking
harder actions against Hussein for his torture and genocide tactics. Gee,
I wonder why. As for Iraq's nuclear capabilities, please explain
why the previous head of the International Atomic Energy Agency has gone
on record stating that he was actively trying to make a nuclear weapon,
and defectors have stated that he has gotten the technology to produce
them. You also mention the fact that he has Bio and Chemical weapons but
that it is no big deal! Maybe you don't give a damn about anything but
the stock market, but I've got a news flash for you, Hussein has murdered
over a million people. He tortures children. Good lord man, don't you have
any compassion? Or are you only interested in money?
As for your slam on Israel,
you prove your colors by failing to mention the fact that as late as last
week Hussein was sending blood money checks to the homicide bomber's families
as payment for their martyrdom. You also fail to mention the fact that
the hijackers from 9/11 trained for their mission in Iraq. You also fail
to mention that had France bothered to stop Hitler we wouldn't have had
WWII. Where would the stock market be if we hadn't had WWII? I certainly
hope that you put more effort into your research of stocks than you have
in your slanted editorial of Bush as a reckless cowboy. Your political
opinions are not well researched and allude to a lack of moral character.
Evil men prevail when good men do nothing. Do us all a favor and keep your
reporting limited to stocks.
Barry D
Augusta, Ga.
Aside from some
editing shortcomings, your analysis of the Iraq war was excellent. As you
make plain, both sides can make strong arguments for removing Saddam. It
dismayed me that the strongest argument for the war -- the humanitarian
one of deposing a regime that has kill and tortured thousands -- was the
last one put forward by the Bush administration.
The one aspect of this debate
your analysis didn't address -- probably because it's moot now that the
shooting has started -- is whether peaceful means could have been employed
to remove or disarm Saddam. Various members of the Bush administration
asked in recent weeks, "How long are we supposed to let the inspections
continue?" My answer was always, "How about forever? They cost a
pittance compared to war, and nobody gets killed."
The next step for the U.N.
could have been to demand that legions of human-rights monitors be allowed
in to investigate the torture and other atrocities and then, in collaboration
with the World Court, make arrests for crimes against humanity.
Ed C
Granger, IN USA
I shall begin
by saying that: your obervations and subject matter content within the
article is excellent and very clearly articulated. There should be more
honest and un-bias material like this readily available for people within
the country to have access to. However, I feel compelled to interject a
couple of key notes:
When referring to Muslims,
the use of confusing adjectives such as Muslim Extremist, and Muslim Fundamentalist
is very mis-leading to readers - in particular those not well versed in
understanding of Al Islam and Muslims. This only generates pre-conceived
notions... leading to negative connotations in the mind of readers.
Myself along with many others
are still not convinced that Terrorists from outside this country are the
blame for what happened on Sept.11, 2001... for two main reasons: America
the super-power and leader in sophisticated technologies - the same
country that has stealth technology at its power has to seem weak and defenseless
according to Bush in his campaign to convince the people of the world that
a highjacker with a Knife was able to hold the entire plane... crew and
passengers completly hostage, not to mention how quickly/rapidly physical
evidence was located and acquired to supposedly link certain alledged Al-
Qaida members to all of this. I'm sorry, but were is the real proof ?
Finally, most of the people
within the United Stations approx. 75-80% are not happy with the direction
given by leadership for this country. A lot of negative impact was felt
with the slumping economy prior to Sept.11, and inspite of the political
rhetoric more dismay has been expressed form the international community.
Furthermore, 80-90% of the world is disappointed with the go to war mentality
and blatant disregard to UN policy. It's clear what the real intent is
for storming into Iraq - as you mentioned in the article. But inspite of
all the atrosities that we witness before our eyes from leadership... what
are we doing as a people from a collective stand point to help bring about
change and implement a system that will be a healing and bring about true
peace in the world and cure the present illness's and sickness's of society
that is afflicted upon us? Well, you dont have to look much further cause
that very system does exist by the name of "Al-Islam", which is gaining
more attention day by day... it's wonderful vastness and peace that it
brings to every individual that embraces it with sincerity is becoming
more and more received within the hearts, communites, and society as a
whole.
Thank you for your time,
Ali
I'm glad to read a good pro/con
outline of this "war".You did a more thoughtful rundown than the big media.
AP
Thank you AP- At least we accomplished
our mission with one member. |
Please keep your comments coming
for the Members' Forum. Email [email protected]
on any subject you want. Please try to keep your comments down to one or
two paragraphs.
Monday- Special edition
on XML Global Technologies (OTC BB: XMLG)- We're finally getting
some facts and it's not all bad.
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