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A New Year Brings New Opportunities for Patient Traders

By  +Follow January 10, 2014 8:45AM
Tickers Mentioned:

The fourth quarter earnings season has officially started, and traders and investors will be watching closely what the market has in store for the coming year. In this week's interview with Toni Turner of TrendStar Trading Group, we discuss areas of the market that could potentially still hold some opportunity despite trading at such elevated levels.

EQ: The New Year has barely gotten underway and we're already in earnings season. The fourth quarter should be interesting to see how the year closed out for many different areas of the market. Are there any in particular that you're watching right now?

Turner: Of course, Alcoa, Inc. (AA) kicks off the earnings season Thursday after the market closes. However, I’m actually watching with interest to see how the retailers finished out the fourth quarter. We can see how that works out in the aggregate by watching the SPDR S&P Retail ETF ($XRT). The XRT was up 38 percent in 2013, and so we know that this past year, consumers held up well.

We also know that the U.S. consumer makes up two-thirds of GDP, so in order for this glorious uptrend to continue in the market—and certainly riding on the back of the improving economic numbers—we need retailers to stay strong.

Now, Costco (COST) just reported that sales rose 5 percent in December, beating expectations of 2.6 percent. I know retailers is a highly diverse industry group, with some suffering like Sears Holdings (SHLD) and JC Penney (JCP) , and some doing well like Macy’s (M) and Costco, but I want to see in the as a whole how retailers and the U.S. consumer are doing since they are a key part of our improving environment. So that will be an indicator to me.

EQ: We're arguably in a different economic environment now that the Fed has given a clear indication on the next step of its tapering. Does this affect your approach to the market for 2014 as compared to 2013?

Turner: With the 10-year bond yielding over 2.90 percent, we’ll have to take the possibility of higher interest rates into consideration. Of course, rising bond yields can negatively affect bond-like equities such as Utilities and REITs, so we will have to adjust our sector evaluations accordingly.

If the Fed, under Janet Yellen, continues to cut back on the bond buying—--then we’ll need to adjust how we think and we’ll have to be even more judicious in the coming year as to which stocks we choose to invest in.

EQ: You said recently that you aren't keen on adding new long positions as of right now. Do you see some softness in the market as of where we currently sit? Do you anticipate a pullback in the near future?

Turner: I’ve been anticipating a pullback for the past three months, and I’ve been wrong for the past three months. I’m going to admit that, but I’m also in good company. I think there’s standing room only in this particular  space.

However,  in the first few days of  January, the market has a spongy texture. We’ve watched oil prices fall rather dramatically since the last two trading days of December to where it currently is, and oil prices have fallen even more from the September highs, which was at $104.67. Right now, WTI crude futures are trading at $91.80.

Brent oil has fallen as well, although not as much. I do realize that we have maybe an oversupply of oil in the U.S., but this dramatic fall seems to indicate more than that.

In addition to  falling oil prices,  we can see China’s weakening posture—by looking at the iShares China Large-Cap (FXI) , which has fallen 10 percent off the December high. Right now, it’s falling below the November lows of $35.76. As the second-largest economy in the world, if China continues  to lose momentum,  we may see Basic Materials fall in concert and it may put a hitch in the giddy-up in the U.S. market.

EQ: What sectors or industry groups are you watching right now?

Turner: One cannot help but see that Healthcare and the Health Care Select Sector SPDR ($XLV) has really moved dramatically higher, and perhaps it can stay in this uptrend for some time to come. Biotechs are getting a lot of play here, though I don’t recommend many  biotechs to novice traders because they can be very volatile. With that said, you can watch the SPDR S&P Biotech ETF ($XBI), . although I would wait for a pullback before I entered.

Almost everything right now needs to pull back. I’m watching the Claymore/Delta Global Shipping ($SEA), which I mentioned last time we spoke. A bunch of small shippers here have done well recently, but this too, needs to consolidate before I’d be interested.

Also, I’m watching the First Trust ISE Global Wind Energy ($FAN), but that too only on a retracement.  I’m pretty much sitting tight here except for a couple of core positions. I want to wait to see what happens with China and with U.S. interest rates.


DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.

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Results for AA
24 Oct 14 08:50:11
AA 16.46 Stock Charts $AA Alcoa Inc. (NYSE) Last Updated: 10/24/2014 10:50:13 AA Stock Chart - 1 Month http:// http://t.co/lV9mgkkVG4
24 Oct 14 08:46:01
$AA: 7 open, suited signals indicate continued price increase for about 8 more days. http://t.co/mlDfTZlYwQ
24 Oct 14 08:43:26
$AA Moment of truth... will it fade from 16.5ish like all recent times?
James P Worthy
24 Oct 14 08:32:51
$AA Alcoa Earnings Preview http://t.co/y90CDfbcxL
Day Trade Alerts
24 Oct 14 08:08:44
RT @ivanhoff: 13 months ago, $AA $BAC and $HPQ were dropped from Dow 30. Here's how they've done afterwards: http://t.co/dg31JD2Cqg
Media Sentiment
24 Oct 14 07:54:14
$AA received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 315
Mexican Trades
24 Oct 14 07:53:34
Go honey $AA http://t.co/dM4Vef4qBQ
24 Oct 14 07:52:39
13 months ago, $AA $BAC and $HPQ were dropped from Dow 30. Here's how they've done afterwards: http://t.co/dg31JD2Cqg
24 Oct 14 07:49:18
$AA consolidating above moving averages, bullish sign for breakout coming
Thudder & Wicks
24 Oct 14 07:33:59
$AA #Alcoa to sell ownership stake in Mt. Holly Smelter http://t.co/PP85KGCA2c
Thudder & Wicks
24 Oct 14 07:25:47
Stocks to Watch: $UPS, $PG, $AMZN, $LEA, $AA, $MSFT, $PFE http://t.co/KtuNv1xEPR
Stock Moo
24 Oct 14 06:55:56
$aa: Finacity Appoints Judith S. Schrecker as a Board Director of the Company http://t.co/SHmDPaIMHY
24 Oct 14 06:41:34
Morningstar Gives “BB+” Credit Rating to Alcoa $AA http://t.co/j0qL5ujBKJ
24 Oct 14 06:34:32
$AA - U.S. Hot Stocks: Hot Stocks to Watch http://t.co/cw0UBTUy1u
Stocks News&Markets
24 Oct 14 06:34:29
$AA - U.S. Hot Stocks: Hot Stocks to Watch http://t.co/cpqOKZTNIz
24 Oct 14 06:19:57
Ecomike: $AA is on its way fast to a http://t.co/9YNOOBy7OA
24 Oct 14 06:19:35
Ecomike: $AA is on its way fast to a http://t.co/MUI3gCZu64
Stock Forums
24 Oct 14 04:31:42
$AXP Last Price Click Here: http://t.co/B9ZtN4Dwc3 Also See: $UTRM $EPI $IBIO $AA ~
24 Oct 14 04:10:04
Alcoa : Assigned Patent http://t.co/Vdc6nVJjoM $AA
24 Oct 14 04:00:04
24 Oct 14 03:45:16
@StockMaul $AKS has had a big bounce, but for my TF program, I need it over the 200 day - following $AA $X more closely
Investors Hangout
24 Oct 14 03:07:09
$AEP P/E Ratio Click Here: http://t.co/enN4iKkxpa Also See: $LNKD $UUP $EWZ $AA ~
Chasing Stars
24 Oct 14 02:35:58
$AA Filings Click Here: http://t.co/WRtfyBDla5 Also See: $GDX $IDNG $ZSL $UNG ~
Stock Forums
24 Oct 14 02:33:35
$AA Change Click Here: http://t.co/6e26oH9unv Also See: $EBAY $SLW.TO $GTATQ $AUY ~
Investors Hangout
24 Oct 14 02:33:15
$AA Last Trade Click Here: http://t.co/662miUuVPB Also See: $XLF $BMY $JNUG $XLP ~
Investors Hangout
24 Oct 14 02:28:27
$AA Financials Click Here: http://t.co/qVnsVjl9AZ Also See: $MYEC $COST $WAFR $XHB ~
Chasing Stars
24 Oct 14 01:17:58
$UNGS Bid Size Click Here: http://t.co/vTmTtsp1Yi Also See: $TRTC $AKRX $XIU.TO $AA ~
Wolf Of Essex
24 Oct 14 00:21:39
$AA AA/ LN AA....Goldmans initiated with a target price of 420p...
Eoin Dinsmore
23 Oct 14 22:48:53
$CENX strikes again, buys $AA stake (50.3%) in Mount Holly 229ktpy aluminium smelter $GLEN own 46% of $CENX a bet on US premium staying high
Stock Forums
23 Oct 14 22:37:37
$NTEK Yield Click Here: http://t.co/ndcjz7rJHU Also See: $GTATQ $AA $COHO $VHT ~
Investors Hangout
23 Oct 14 22:32:19
$NTEK Ask Click Here: http://t.co/0fRCO03I1E Also See: $C $EPI $AA $NKO.TO ~
Stock Forums
23 Oct 14 22:28:35
$MYEC Prev Close Click Here: http://t.co/5xgysIqzK5 Also See: $AA $UTX $DOW $SDRL ~
23 Oct 14 22:07:54
During this #Ebola outbreak, $AA investors will also want to buy $SMED. They handle medical and hazardous waste http://t.co/vTV3wPBONo
Stock Wire
23 Oct 14 17:47:49
Alcoa selling stake in South Carolina smelter to Century Aluminum for $67.5 ... $AA http://t.co/mEY0ctxneA
Day Traders Group
23 Oct 14 16:14:52
MACD Bullish Crossovers http://t.co/quMVtJcVq2 $THG $VVTV $TUES $SCS $DD $mU $FB $TWTR $PCLN $AA $SPY $LMT $REXR $DNP $ORLY & More
Dave Neville
23 Oct 14 15:49:41
Alcoa agrees to sell majority interest in S Carolina aluminium smelter http://t.co/RVXf7iENVn $AA
Dave Neville
23 Oct 14 15:48:32
Alcoa To Sell Ownership Stake Of Smelter: http://t.co/QkmNgGMJgY $AA
23 Oct 14 14:30:08
ALCOA : Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q) http://t.co/GxB6fT1mUN $AA
Stocks News&Markets
23 Oct 14 14:28:16
$AA - Quarterly Report (10-q) http://t.co/qfAoym1s2Y
Instrumental Data
23 Oct 14 14:27:01
ALCOA INC. $AA 10-Q now available
Media Sentiment
23 Oct 14 13:59:55
$AA received a new alert. Find out why at http://t.co/nZwqRf3BRT #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 809
23 Oct 14 13:55:09
Alcoa : sells stake in South Carolina smelter http://t.co/IUddSFEirA $AA $CENX
23 Oct 14 13:43:57
.@jimcramer $CENX buying Alumax of South Carolina from $AA. Good news?
Eoin Dinsmore
23 Oct 14 13:40:38
Mount Holly power contract from Santee Cooper expires Dec '15. Without a long term competitive contract the smelter wasn't a fit for $AA
Paul Robinson
23 Oct 14 13:29:53
RT @eoindinsmore: $CENX strikes again, buys $AA stake (50.3%) in Mount Holly 229ktpy aluminum smelter $GLEN own 46% of $CENX a bet on US pr…
Eoin Dinsmore
23 Oct 14 13:25:50
$CENX strikes again, buys $AA stake (50.3%) in Mount Holly 229ktpy aluminum smelter $GLEN own 46% of $CENX a bet on US premium staying high
23 Oct 14 13:11:32
$AA Alcoa to Sell Ownership Stake in Mt. Holly Smelter to Century Aluminum From our Stock News Alerts App
BV Basic Materials
23 Oct 14 13:05:56
$AA Alcoa to Sell Ownership Stake in Mt. Holly Smelter to Century Aluminum.. http://t.co/RvFD2PVEVS
23 Oct 14 13:05:55
Alcoa : to Sell Ownership Stake in Mt. Holly Smelter to Century Aluminum http://t.co/hnclWG96Cs $AA
23 Oct 14 13:05:12
$AA - Alcoa to Sell Ownership Stake in Mt. Holly Smelter to Century Aluminum http://t.co/2Gboq335QJ
By  +Follow January 10, 2014 8:45AM



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