Churning Toward New Highs

Every dip gets bought. Every pop gets sold. Since the broad market clocked new highs again late last month, stocks have essentially gone nowhere. November 06, 2013     Churning Toward New Highs   Stocks go nowhere fast Short this market at your own risk Plus: A new opportunity to compound your money   Greg Guenthner coming to you from Baltimore, MD... Greg Guenthner Welcome to the churn… Every dip gets bought. Every pop gets sold. Since the broad market clocked new highs again late last month, stocks have essentially gone nowhere. Oh, and this is a good thing, by the way. Stocks probably won't challenge new highs again this week. But they're setting up perfectly for a solid year-end run… Think of this sideways action as an undercover correction. Just look at how far the S&P has extended from its 50-day moving average. It needs a rest at these levels—and there's no better way to accomplish this feat than a bunch of false moves higher and lower. Suck in some new shorts, burn some traders and reload. Your best plan of attack right now is to keep it simple. Don't overthink your strategy. It might look tempting to short the crap out of the market over the next week or two. Don't do it. So far this year, investors and traders have bought every bearish move. I told you yesterday we haven't seen the 2013 highs just yet. Plenty of stocks are setting up for higher prices as we hit the home stretch. Stick with what works and the market will reward you…     Rude Numbers Targets, Predictions and Wild Guesses   1995 was the last year that all of the market's major sectors were up 10% or more. Even the laggards – telecoms and utilities – are each up around 15% year-to-date. 8% of U.S. adults get their news from Twitter. Compare that to Facebook – which nearly 30% of U.S. adults use as a news source. 2,000 people are about to go to work for Apple at new components plant in Arizona. It's part of a push by the company to boost manufacturing in the U.S. $266 buys a Bitcoin this morning. The alternative currency continues to push higher this week, hitting a new high of $270 earlier this morning. $93.95 will buy a barrel of crude today. Oil continues to sink toward my $90 price target. At this rate, we'll get there in about two weeks…     Rude Trends When to Buy... When to Sell   Just because the market's waiting around doesn't mean you have to sit on your hands… In fact, my colleague and microcap expert Thompson Clark just alerted his readers to a new opportunity to compound their money… "Compounding is very applicable to the world of investing. Warren Buffett is probably the world's best compounder. Since taking control of a small textile company called Berkshire Hathaway in 1965, he's managed to compound investor capital at around 20% per year. Today, that comes out to a multiplier of 7,448 times," Thompson explains… "The company that's caught my eye has had similar compounded returns. This company's chairman of the board is an excellent leader. He joined the company in 2002. His goal? Turn it around. It had posted years of losses and was probably close to going bankrupt. "Since taking charge, your recommendation's chairman has seen the share price grow at a compound annual rate of 18%. An investor in 2002 would see their investment today multiplied by 5 times, or be up 500%." This company just so happens to be the smallest company Thompson has ever recommended. Therefore, I can't reveal much more on these pages. You can get the full scoop here… [Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner] Cheap Grub is in Play -- Trade it Now         Ignore At Your Own Peril Today's Must Read Links   Conservative Talk Show Host Goes Crazy on Camera Save Yourself From Obama's Next Power Grab The Feds Will Want This Book Banned     BE SURE TO ADD dr@dailyreckoning.com to your address book.       Additional Articles & Commentary: Join the conversation! Follow us on social media:         To end The Daily Reckoning's Rude Awakening e-mail subscription and associated external offers sent from The Daily Reckoning and The Rude Awakening, click here. Please Note: If you unsubscribe from The Rude Awakening, you will also be unsubscribed from The Daily Reckoning. The Daily Reckoning's Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. 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