It's true: A handful of easy, straightforward steps could put a big dent in your bills. Here are specifics to help you save on basics such as groceries, car costs, energy and taxes.
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The credit crunch will take time to unwind, and until then it could hurt a range of companies. Use these tips to avoid those that could still get burned in the crisis fallout.
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Want to travel? Go back to school? Spoil your grandchildren a little? If you can hold your core expenses in check, you can plan better for the stuff life is really made of.
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We found six companies whose revenues are growing despite the bad economy.
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Financial and energy stocks lead markets higher a day after the Dow's worst point drop ever. The Senate will vote on a new bank rescue plan Wednesday. A new report says the housing market hasn't bottomed. Apple jumps 8% and leads a tech rally.
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Congress has made a lot of noise about ensuring wealthy CEOs don't profit from the proposed bailout. But so far, it looks like executives won't have much to worry about.
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We found eight companies that are generating plenty of free cash flow.
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SELLERS HAVE TO SIGNIFICANTLY LOWER THE PRICE IF THEY HAVE TO SELL AS THE HIGHWAY OF GLOBAL LIQUIDITY REMAINS BLOCKED BY A MAJOR ACCIDENT. THE FINANCIAL COMPANIES PULLED THE MARKETS DOWN LATE LAST YEAR. IN SPITE OF MASSIVE FAILURES, THE SHARE PRICES OF MOST FINANCIAL COMPANIES ARE MUCH HIGHER THAN THEY WERE OVER TWO MONTHS AGO. IN FACT, ON FRIDAY, JP MORGAN WAS NEAR A ONE YEAR HIGH, WELLS FARGO WAS CLOSE TO AN ALL TIME RECORD HIGH AND THE ROYAL BANK WAS UP 29% FROM THE JULY LOW. AFTER RISING FOR OVER TWO MONTHS, THE FINANCIALS ARE BOUND TO PULL THE EQUITY MARKETS HIGHER ANYTIME.
Equity markets are experiencing a violent sell-off like they did right after Sept. 11, 2001 and at the end of the bear market in October 2002. When liquidity and the volume of trading for everything but government guaranteed investment declines, investors who want to sell, or have to sell stocks in an instant, have to substantially drop their asking prices. This is why the markets are so volatile.
Selling in global markets is bound to continue until US legislators will meet again in a few days. This time, they will be sure that their effort to clear the massive accident that has blocked the global highway of liquidity succeeds. Even though the market averages declined last week, the technical picture still points to a positive resolution of this crisis. Indeed, the shares of most financial companies, which are at the center of this financial hurricane, have continued to act much better since they bottomed two and a half months ago. Even after AIG, Freddie Mac, Fannie Mae, Lehman Brothers, and Washington Mutual became penny stocks, the index of US Banking Stocks (BKX) still closed 26% higher today than it did on the July 15 low. In Canada, the TSX Financial Index (XFN) closed up 13% from the July low, even after a 4% decline today. What is this telling us? It is very clearly showing us that the worst-case scenario was factored into the price of most financial companies months ago. Just as it took several months for the equity markets to follow the financial stocks lower last fall after the subprime problems were revealed in the summer of 2007, it will take several months for the equity markets to follow the financial stocks higher now. (Two and a half months have already passed since the financial stocks have improved.) When exactly this will happen is hard to tell. But it can happen anytime.
US stocks are trading 24% below fair value, the same level as they did at the low of the 2000 - 2003 bear market. The level of fear and panic is measured by the the Volatility Index (VIX) has now reached the same peak as it did during the long term capital/Russian default crisis market low in 1998, at the market low on Sept. 21, 2001 after the World Trade Center collapsed and the bear market lows in July and October 2002. The amount of cash in money market funds is at levels last seen at the end of the previous bear market. These extremes in fear and panic selling do not usually last very long and markets have had meaningful advances after each of the periods mentioned above. Just as it was prudent not to buy into the overwhelming sentiment that oil prices were going to even higher this summer, the technical information and the very obvious out-performance of financial indexes indicate that it is not prudent to believe that this downturn can continue much longer either. Hang on to both edges of the canoe until we get through these rapids to calm water.
Bonds - Government bond yields are staying within a trading range even though they are the most popular asset right now. If this is all that happens at this level of fear, yields could rise substantially when this is over.
Commodities - The trend for gold and gold stocks is still positive but the lack of a move to record highs in gold with this level of fear is concerning. The up trend for oil and oil stocks has stalled for the time being.
Currencies - No change from last week. The USD is in a downtrend vs. the CAD$ and the euro. The euro is still in an up trend vs. the yen.
The oscillator has turned down for the first time since July. However, it did not get overbought so it can turn up at anytime and still have a long up trend when the crisis ends. Some sort of action by the government, regulators or the Federal Reserve usually coincides with a bottom. A major bankruptcy is also often associated with a market low but we have had more than enough of those!
![clip_image002[7]](http://www.tradingpostfinancial.com/blog/uploads/WindowsLiveWriter/dc268ea9ae59_B3C3/clip_image002%5B7%5D_thumb.jpg)
You can see that the level of fear has now matched the readings seen at the lows of very major market decline in the last 18 years: the 1997 Asian Crisis, the long term capital/Russian default crisis in 1998, the September 11 attacks in 2001 and the 2000 - 2003 bear market. This alone suggests that we are very close to a turning point.
![clip_image002[9]](http://www.tradingpostfinancial.com/blog/uploads/WindowsLiveWriter/dc268ea9ae59_B3C3/clip_image002%5B9%5D_thumb.jpg)
The red and green lines are the price of the US Banking Index. The up trend in the price and the strength in the oscillator are the best in years. Hopefully I will be able to say that about the equity markets soon! The US financials just about always lead the US markets, which in turn lead Canadian and global markets.
![clip_image002[11]](http://www.tradingpostfinancial.com/blog/uploads/WindowsLiveWriter/dc268ea9ae59_B3C3/clip_image002%5B11%5D_thumb.jpg)
This chart from SentimenTrader.com shows that very high levels of cash are reached at market bottoms. It takes a big rise to encourage cash to return to equities so holders of cash miss out on that.
![clip_image002[13]](http://www.tradingpostfinancial.com/blog/uploads/WindowsLiveWriter/dc268ea9ae59_B3C3/clip_image002%5B13%5D_thumb.jpg)
The up trend in the long-term oscillator for the TSX has stalled a month after it got started. This is unusual but it does happen on rare occasions. It is still oversold so it could just as easily turn back up again.
![clip_image002[15]](http://www.tradingpostfinancial.com/blog/uploads/WindowsLiveWriter/dc268ea9ae59_B3C3/clip_image002%5B15%5D_thumb.jpg)
The same comments for the TSX apply to the TSX Energy Index.
![clip_image002[17]](http://www.tradingpostfinancial.com/blog/uploads/WindowsLiveWriter/dc268ea9ae59_B3C3/clip_image002%5B17%5D_thumb.jpg)
According to the oscillator, the up trend for gold stocks is still intact.
![clip_image002[19]](http://www.tradingpostfinancial.com/blog/uploads/WindowsLiveWriter/dc268ea9ae59_B3C3/clip_image002%5B19%5D_thumb.jpg)
Prices on US and Canadian government bonds are not any higher than they were at other times in the last year which is interesting. If this is the best that bonds can do at the worst of times, they will likely not perform well when the investing climate improves. Liquidity of historical proportions has been added to the financial system. This is inflationary, which is negative for bonds.
![clip_image002[21]](http://www.tradingpostfinancial.com/blog/uploads/WindowsLiveWriter/dc268ea9ae59_B3C3/clip_image002%5B21%5D_thumb.jpg)
The trend for gold is still up but the price is not anywhere near the record price of $1,000 that it reached during the Bear Stearns collapse in March. This is worrisome. With much more fear and worry than there was in March, investors should be very alert to how gold responds when fear subsides.
![clip_image002[23]](http://www.tradingpostfinancial.com/blog/uploads/WindowsLiveWriter/dc268ea9ae59_B3C3/clip_image002%5B23%5D_thumb.jpg)
The up trend for oil has stalled. This could be temporary. It is still very oversold so it could resume the trend at anytime.
![clip_image002[25]](http://www.tradingpostfinancial.com/blog/uploads/WindowsLiveWriter/dc268ea9ae59_B3C3/clip_image002%5B25%5D_thumb.jpg)
The euro is still acting relatively well compared to the USD even though bank failures are increasing in Europe too.
![clip_image002[27]](http://www.tradingpostfinancial.com/blog/uploads/WindowsLiveWriter/dc268ea9ae59_B3C3/clip_image002%5B27%5D_thumb.jpg)
The long-term oscillator for the euro/yen price, which reflects the carry trade, still indicates that the euros up trend is intact. This would suggest that most of the de-leveraging using the carry trade has occurred and is now in the process of reversing.
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(Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend lines in red; horizontal support/resistance level in yellow; 50-period simple moving average in light blue.)
9/30/2008 – GBP/USD – Price action on the key GBP/USD pair (a daily chart of which is shown) has been in strong bearish mode since the beginning of the week as the dollar has strengthened across the board. This has manifested itself into what is appearing to be a continuation of the downtrend that has been in place since late-July. Momentum on this pair still appears to be unmistakably down, with little in the way of a strong bottom in sight.
Price has broken down below support barrier after support barrier, including several significant Fibonacci levels. Currently, as of Tuesday mid-morning in New York, fast-moving price-action has moved down below a key 61.8% Fibonacci level, and any continued bearish momentum could now target the major support that resides first around 1.7750, and then eventually around the 1.7450 region.
James Chen
Chief Technical Analyst, FX Solutions
To download the latest version of FX AccuCharts 7.0, please click here: Download FX AccuCharts 7.0
*IMPORTANT NOTICE: These comments are for information purposes only. The information contained on this document does not constitute a solicitation to buy or sell by FX Solutions, LLC., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law. Opinions, market data, and recommendations are subject to change at any time. Forex trading involves substantial risk of loss and is not suitable for all investors. Click here for more information.
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The financial-rescue plan intended to restore confidence in the U.S. banking system collapsed in partisan wrangling as the House of Representatives voted down the proposal backed by the Bush administration and congressional leaders of both partie
5 Vote(s)
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