Summer of 2013: Out with a Whimper

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

The summer of 2013 ended last week with a whimper, with the Dow Jones dropping 1.33% and the S&P 500 falling by 1.84%. Global markets continued to struggle as the MCSI Emerging Markets Index dropped another 1.63%.

Most of your Bull Market Alert positions pulled back along with the market. The sole exception was your bet on a bounce in biotech, as Celgene (CELG) rose 1.24%.

Overall, it has been a tough summer for global stock markets. With the combination of the Fed’s tapering, the uncertainty surrounding Syria and continuing rout in emerging markets, it’s no wonder stock markets around the world — and investor sentiment — is in a funk.

That all said, you’ve had a much better summer in your Bull Market Alert portfolio, having clocked some solid gains over the past two months.

In the month of August alone, you booked two double-digit and two triple-digit percentage option gains. In Bank of Ireland (IRE), you booked option gains of 81.33% and 120%. Bank of Ireland (IRE) stock ended the month 28% higher. With Jazz Pharmaceuticals (JAZZ), you collected 57.54% and 101.64% gains. You also exited your position in JAZZ stock with a 40% gain.

You saw some solid winners in July, too. You booked gains of 62.06% and 105.53% in Delphi (DLPH) options; 59.55% option gains in Stratasys (SSYS); 57.59% in ProShares Ultra Gold (UGL) options; and 65.52% in iShares Dow Jones US Home Construction (ITB) options — the latter in just 14 days.

So where does the market stand today?

First, it’s worth keeping the current market pullback in perspective. Despite all of the current negative headlines, the S&P 500 has been basically flat between Memorial Day and Labor Day. And that’s during what is seasonally the weakest time of the year. Despite the negative headlines, the market has held up quite well.

Exclusive  Three Data Center Stocks to Buy Emerge as Promising Ways to Profit

Second, the U.S. stock market is oversold, both technically and in terms of market sentiment. That makes the current pullback one of the best times of the year to re-enter the market.

Finally, the coming days’ headlines will be chock full of negatives about Syria and about the impact of the Fed’s tapering.

Yet, I am broadly optimistic about the prospects for market gains over next four months. The U.S. economy is steadily expanding. I don’t expect the United States will be getting involved in Syria in any major way. And although September tends to be choppy, we are also entering Q4 — traditionally the strongest time of the year for the stock market.

I’ll be back next week with another Bull Market Alert recommendation to take advantage of that coming rebound.

Portfolio Update

Bank of Ireland (IRE) gave back 5.83% last week. IRE completed two nearly duplicate rise-fall patterns in August, gaining a whopping 28% for the month. With investors bullish on the Irish recovery, chances are good that this healthy trading pattern may continue going forward. IRE remains a BUY.

WellPoint, Inc. (WLP) dipped 1.66%. WLP continued to trade sideways last week, holding the seemingly rock-solid $85 support level. With the 50-day moving average just below, upward pressure continues to build. Owners of record as of Sept. 6 (this coming Friday) will receive a $0.375 per share dividend on Sept. 25. WLP is a BUY.

Celgene Corporation (CELG) added 1.24%. CELG is up over 70% for 2013, and this trend is likely to continue since CELG is not yet overvalued. Strong sales of its drug Revlimid, coupled with a positive outlook on several other pipeline drugs, leaves Celgene with plenty of upside. CELG is a BUY.

Exclusive  Strong Dollar Will Fuel Strong Rally in Russell 2000

Gentherm (THRM) dropped 4.29% over the past five trading days. THRM fell victim to the recent negative news surrounding the Syrian crisis and pulled back in tandem with the broader markets. Analysts at Zacks currently have a $22 price target on THRM, 31.5% above its Friday close, with the median analysts’ price target coming in at $24. There is good upside waiting, once THRM gains its footing. Seriously oversold, THRM is a HOLD.

Google Inc. (GOOG) also took some collateral damage from the news on Syria, falling 2.68%. GOOG held fast to its well-defined $850 support level last week as the NASDAQ Composite average turned out a particularly bad week. Google may, quite literally, have yet another new trick up its sleeve. Google announced last Friday that it recently (and secretly) acquired a team from WIMM Labs, a pioneer in the “smart watch” market. Although this conjures up images of Dick Tracy’s radio watch, it’s a sure bet that Google has quite a bit more amazing functionality in mind for its version of Dick Tracy’s ground-breaking technology. GOOG is a BUY. Incorporated (PCLN) dipped 1.65% last week. Although the popular, and well-promoted, online travel site Expedia holds on as the industry leader, Priceline is in the number two spot and is hot on Expedia’s heels. With Expedia down 24% this year, and PCLN up a whopping 51%, the tables look to be turning. PCLN is a BUY.

Latest Special Reports

As a courtesy, I want to bring to your attention my latest special report, Hedge Fund Secrets Revealed: A Simple Four-Step Technique to Manage Your Money like a Hedge Fund. This FREE report gives you the four-step process to maximize your profits just like the best investment pros do.

Exclusive  Five Defense Stocks to Buy Amid Chinese Military Spending Spree

In addition, take a look at the latest version of The Top 12 Stocks You Should Buy Right Now, which features three of my top investment recommendations, as well as bonus picks from each of my fellow investment newsletter editors at Eagle. Both of these special reports are accessible FREE on my website.

share on:

Like This Article?
Now Get Our FREE Special Report:
Alternative Investing: Investing in Timber

Stock Investor editor Paul Dykewicz reveals why investing in timber may be one of the best long-term portfolio strategies you'll find today.

Get Access to the Report, 100% FREE

previous article

In a blockbuster $7.2- billion deal, Microsoft is acquiring Nokia’s cellphone business. Microsoft is paying 3.79 billion Finnish marks for the business components and 1.65 billion marks for Nokia’s patents.

share on:


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Profits Alert
  • Hi-Tech Trader

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • Intelligence Report
  • Bullseye Stock Trader

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Technical Traders Alert
  • Success Trading Group

Used by financial advisors and individual investors all over the world, is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor