Credit Issuers Facing Major Declines (AXP, COF, DFS)

With all indications pointing to economic troubles ahead, credit issuers such as American Express (NYSE: AXP), Capital One (NYSE: COF) and Discover (NYSE: DFS) are particularly vulnerable to double-dip declines. Credit issuers are heavily exposed to the US consumer, both for the taking and repayment of credit loans. However, the consumer is, in fact, dying… Continue Reading

Forex Signal: GBP/USD Set to Reverse Course

The British pound has had an inexplicable run over the past two weeks, reaching impressive heights against the US dollar. However, the pair is likely to reverse both immediately and violently, as traders come to realize that the move was overdone. The GBP/USD is last priced at 1.4945, just off its recent highs above the… Continue Reading

Forex Signal: EUR/USD Heading to Fresh Lows

The euro has held its ground against the US dollar over the past two week, though the shared currency’s strength was more a function of dollar weakness. As risk aversion heightens in the global marketplace, the euro will find substantial resistance to further upside. The EUR/USD is last priced at 1.2235, after falling from recent… Continue Reading

UPDATE: US Dollar on Verge of Major Run Against Loonie

The US dollar’s run against the Canadian dollar in now in full force, with the pair rising to the 1.06 handle for the first time since June 7. Updated stop prices to lock in profits are now necessary. All rules described in the original recommendation (below) remain the same. However, we will now adjust our… Continue Reading

Forex Signal: EUR/AUD Making Break to New Lows

The euro is on the verge of falling to record lows against the Australian dollar, signaling a substantial downward move in the coming trading days. The EUR/AUD is last priced at 1.4075, well off the Friday highs atop the 1.43 handle. The final support for the currency pair will present near the 1.3930 level, after… Continue Reading

Morgan Stanley – A Play on Relative Positioning

A number of headwinds exist for the banking sector going forward, which warrants a play on the weakness expected for investment banks in the months ahead. Of primary interest is Morgan Stanley (NYSE: MS), which finds itself in the worst position among its peers, whether or not a second catastrophe strikes the financial sector. Shares… Continue Reading

Gulf Oil Spill Tragedy: Finding Short Value in BP

The Gulf oil spill tragedy caused by British oil company BP p.l.c. (NYSE: BP) has sent shares of the company precipitously lower in recent weeks. Last trading at 31.35, BP shares have fallen nearly 50% from their 52-week high of $62.38. Still, the ongoing spillage of oil, which has yet to be meaningfully contained, will… Continue Reading

US Dollar on Verge of Major Run Against Loonie

The US dollar is positioned for a significant run against its Canadian counterpart and will likely reach new 2010 highs in the days to weeks ahead. Last priced at 1.0485, the USD/CAD has sold off notably from its May 25 highs, when the pair traded at 1.0853. However, with the pair drawing ever closer to… Continue Reading

GBP/USD Run May End on Double-Top Formation

The recent rally for the British pound against the US dollar may have run its course, as a short-term double-top formation is in the works. Last priced at 1.4620, the GBP/USD failed to breach its upward resistance overnight near the 1.4750 level on its second attempt in as many days. The real test for further… Continue Reading

Home Sales, Tax Credits and Homebuilders’ Impending Decline

The better-than-expected numbers for pending home sales in April helped drive equities markets higher today — and, as one might expect, homebuilder shares performed well across the board. However, investors may have overlooked the overwhelming impact of the April 30 expiration of the homebuyer tax credit on home sales, as they pushed homebuilder shares higher…. Continue Reading