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A New Year Brings New Opportunities for Patient Traders

By  +Follow January 10, 2014 8:45AM
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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
Chimp
2 Mar 15 11:49:20
RT @StockSignaling: 25 Stocks To Watch: http://t.co/DEd0xkdNq4 : $C $AXP $BLOX $NFLX $ROSE $MRVL $JCP $VLO $TSL $NE $SKYW $NNVC $FSLR $AA $…
TheDallasRealtor
2 Mar 15 11:44:26
$AA I'm eyeing that 50 day SMMA of 13.48 to go long again. short now. http://t.co/NZUG2LLNAB via http://t.co/DsLhUHVWcz
clayton
2 Mar 15 11:44:06
AA 14.76 Alcoa Inc $AA added to my watch list. Right now with AA I am watching the last price 14.76 High 14.84 http://t.co/gnuf8Sye8t
clayton
2 Mar 15 11:43:44
$AA AA 14.76 Alcoa Inc $AA stock added to my watch list. Right now with AA I am watching the last price 14.76 High http://t.co/eo9SwJ41v5
David (no relation)
2 Mar 15 11:40:59
RT @StockSignaling: Upgraded Stocks Trading in a New Range: $AXP $C $JCP $TAP $AA $MO $AWI $ALSN $BLOX $DVN $GLNG $BHP $JASO $COT $JAKK htt…
Media Sentiment
2 Mar 15 11:31:35
$AA received a new alert. Find out why at http://t.co/nZwqReM0tj #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 389
Stock Signaling
2 Mar 15 11:31:03
Upgraded Stocks Trading in a New Range: $AXP $C $JCP $TAP $AA $MO $AWI $ALSN $BLOX $DVN $GLNG $BHP $JASO $COT $JAKK http://t.co/DEd0xkdNq4
Breaking News Now
2 Mar 15 11:26:04
$AA: Watch List:-Alcoa (AA),MannKind (MNKD), Citigroup (C), Suncor ...: http://t.co/75YemhCgMc
Langan Stocks
2 Mar 15 11:16:24
$AA Percent Change Updated Monday, March 2, 2015 2:03:18 PM $INTC $IYR $DNKN $LUV http://t.co/fb6yg0bE54
Rosner Stocks
2 Mar 15 11:16:08
$NVDA Company Info Updated Monday, March 2, 2015 1:59:25 PM $FBT $XLI $AA $BLK http://t.co/mxns17SVqc
Street Exclusive
2 Mar 15 11:10:25
Feel the Thunder: http://t.co/ZqywlV91Rq $CRS $MNKD $BBRY $MSFT $BAC $LL $NUGT $DUST $NXPI $FSL $MU $LTRX $QCOM $SNDK $INTC $UNG $SPLK $AA
Bashaar
2 Mar 15 11:08:46
RT @apppro1: $F $AA Ford Motor Company F-150 Pulls Aluminum Prices Upward http://t.co/MrktXbXfwY
Street Exclusive
2 Mar 15 11:02:08
Feel the Thunder: http://t.co/l1fhqE4e1R $CRS $MNKD $BBRY $MSFT $BAC $LL $NUGT $DUST $NXPI $FSL $MU $LTRX $QCOM $SNDK $INTC $UNG $SPLK $AA
Syed Waqas Nabi
2 Mar 15 11:00:35
A bullish Big MAC (Bullish) has occurred at 1:30 PM Mar 02 at $14.93 on Alcoa Inc (AA) $AA
Bosco
2 Mar 15 10:51:37
$AA $F $GM RT http://t.co/Wbm77tzdQG
Mike Lanuto
2 Mar 15 10:35:16
Made a trade in $AA on @investFeed. Reserve your username at http://t.co/uRMvKAuJUm for full trade details.
IH News Desk
2 Mar 15 10:15:09
$MU Stock Message Board Updated Monday, March 2, 2015 1:11:02 PM $ACAD $AA $HD $IWM http://t.co/l5r2DCwK4r
NASDAQ
2 Mar 15 10:10:06
$AA - Initial Statement of Beneficial Ownership (3) http://t.co/OxuxtqebVO
Stocks News&Markets
2 Mar 15 10:10:05
$AA - Initial Statement of Beneficial Ownership (3) http://t.co/byckNvxXRn
Stock Signaling
2 Mar 15 10:01:03
25 Stocks To Watch: http://t.co/DEd0xkdNq4 : $C $AXP $BLOX $NFLX $ROSE $MRVL $JCP $VLO $TSL $NE $SKYW $NNVC $FSLR $AA $SPN #stock #analytics
Stock Wire
2 Mar 15 09:27:43
One Put, One Call Option To Know About for Alcoa $AA http://t.co/vVkEg4V78K
Wall Street
2 Mar 15 09:19:15
http://t.co/iQWRYq6dIh....Top penny stocks, NYSE, and NASDAQ trades from the stock market today. +296% last week. $AVP $ABEV $BMY $AA
ProVesting
2 Mar 15 09:18:02
$AA: One Put, One Call Option To Know About for Alcoa: http://t.co/0wPGmXW4hb
Breaking News Now
2 Mar 15 09:17:05
$AA: One Put, One Call Option To Know About for Alcoa: http://t.co/5YcWLCsxzh
IH News Desk
2 Mar 15 09:14:03
$USCI Filings Updated Monday, March 2, 2015 11:11:07 AM $FB $GPRO $AA $EEM http://t.co/EsVUkXOabd
Rosner Stocks
2 Mar 15 09:13:43
$AA Stock Message Board Updated Monday, March 2, 2015 11:59:27 AM $VTI $FSLR $ARIA $IYR http://t.co/dZsXNAEhXQ
Rafael
2 Mar 15 09:12:56
RT @jennyskavland: Audio: $VAIMAN GAFFELBIT$ FLIPAR $PILE $Å D VA POG http://t.co/E9XG2ndRlt
100K $VAIMAN
2 Mar 15 09:10:43
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100K $VAIMAN
2 Mar 15 09:08:51
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leahanne
2 Mar 15 09:01:59
Volume Alert - AA 14.85 Alcoa Inc $AA Hit a high today of 14.90 Closing the day 10:30 at 14.85 +0.06 +0.41% Wi http://t.co/J6ilG1b1QI
leahanne
2 Mar 15 09:01:37
$AA Volume Alert - AA Stock 14.85 Alcoa Inc $AA Hit a high today of 14.90 Closing the day 10:30 at 14.85 +0.06 +0. http://t.co/nZ7Kvjqicn
Eugenio Simón
2 Mar 15 08:20:00
RT @InvestWall: 7 stocks Wall Street thinks will soar this year http://t.co/Gb9WmaFfJG $AAL $DAL $MU $YHOO $AA $KORS $TSLA #InvestWall
Future Tech Investor
2 Mar 15 07:40:26
$KTOS HOD. Nice chart setup $LMT $BA $FB $V $F $GM $YY $BLOX $FEYE $CYBR $AA $T $PFE $Z $ZU $JD $DDD $JKS $HPQ $LL $BAC $AAL $MBT $EYES $S
OMAR  STOCKTRADER
2 Mar 15 07:34:24
Basic Materials Sector: Upgrades: $KEG $VLO $NE $ROSE $AA $EGO $SPN $AU $BHI $TRP $BPZ $DVN http://t.co/wJubkZLVVS #stockmarket #daytrader”
Trading Alpha
2 Mar 15 07:20:31
$SPY, $AAPL, $WYNN, $HLF, $IBM, $AA, $CAT, $EMR, $GRMN, $NKE, $QIHU, $TSLA Entries and Levels: https://t.co/L2A7ASCiTU
WKRB News
2 Mar 15 06:52:03
Alcoa Earns “BB+” Credit Rating $AA http://t.co/85RrAYc1HT
Mark Trader
2 Mar 15 06:38:11
I banked over 200% in gains during my 14-day trial with http://t.co/L2jCaE1M1d. Their 5 guru traders are amazing. $AA $KO $BSX $AVNR
Marc H Hutzler
2 Mar 15 06:10:19
RT @InvestWall: 7 #stocks Wall Street thinks will soar this year http://t.co/TptFAvXnGN $AAL $DAL $MU $YHOO $AA $KORS $TSLA #InvestWall
Edgar
2 Mar 15 05:44:16
RT @StockSignaling: Movers and Shakers: Recently Upgraded: $JCP $C $AXP $EGO $VLO $KSS $NE $AA $BRCM $MRVL $CSX $EXC http://t.co/DEd0xkdNq4…
Elo
2 Mar 15 05:35:18
RT @StockSignaling: Basic Materials Sector: Upgrades: $KEG $VLO $NE $ROSE $AA $EGO $SPN $AU $BHI $TRP $BPZ $DVN http://t.co/DEd0xkdNq4 #sto…
Barry Woolvin
2 Mar 15 05:14:42
@jimcramer my vote is KK of $AA for the bankable 21 list
IH News Desk
2 Mar 15 05:08:38
$HOG Stock Price Updated Monday, March 2, 2015 07:11:02 AM $ERHE $NVDA $CAT $AA http://t.co/k9hxkOcWsz
apppro
2 Mar 15 04:39:54
$F $AA Ford Motor Company F-150 Pulls Aluminum Prices Upward http://t.co/MrktXbXfwY
Dave Neville
2 Mar 15 04:38:32
@apppro1 There dose seem to have a bunch of people shorting in $AA but I own another aluminum co., people shorting dose not change anything.
Mark Trader
2 Mar 15 04:38:02
http://t.co/U0VrKn1h21 has the most reliable picks in the market. The move fast and never fail. $AA $RDN $RF $AVP $CX $ABX $ECA
apppro
2 Mar 15 04:32:16
@DNev47 Dave you know as well as anyone that fundamentals and reality do NOT matter anymore in this market. $AA under shorts hate target. $f
apppro
2 Mar 15 04:14:47
@DNev47 LOL. That's why $AA is down 15% in 2 weeks. Talk abt insanity!
Langan Stocks
2 Mar 15 04:08:07
$KGET News Updated Monday, March 2, 2015 07:03:18 AM $HYG $AA $UVXY $INTC http://t.co/KWHTPudWXc
TradingMyway
2 Mar 15 03:56:20
RT @InvestWall: 7 stocks Wall Street thinks will soar this year http://t.co/Gb9WmaFfJG $AAL $DAL $MU $YHOO $AA $KORS $TSLA #InvestWall
Rosner Stocks
2 Mar 15 03:06:29
$AVD Short Sales Updated Monday, March 2, 2015 05:59:24 AM $XLNX $GOOG $AA $OIH http://t.co/Xhziv1FPT3
				
				
By  +Follow January 10, 2014 8:45AM
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