The last market breadth update was written in June, with a theme of main internal indicators pushing towards overbought levels. The report showed how NYSE High Low Ratio, Advance Decline Line and Percentage of Stocks Above 50 & 200 MAs were all signalling that the rally was overextended.

Click image for larger view

Source: Short Side of Long

After the report was published, majority of the main US indices paused, as the price action has been consolidating in a sideways manner throughout majority of July. During the consolation, we have seen a slight pullback in indicators that were overbought the month before (as seen in Chart 1), but not enough change to write an in-depth summary. At the time of writing, HL Ratio and Stocks Above 200 MA both remain around 90% readings, which is considered overbought. This is still not a time to be making long term investments.

Click image for larger view

Source: Short Side of Long

One interesting condition that does stand out as a cautionary signal is seen within the Nasdaq Composite internals. While the overall index remains in a bull market and continues to higher highs, one should be able to observe that since the beginning of the year internals measured by New Highs vs New Lows have been showing signs of deterioration. We have seen a similar condition during peaks in both 2007 and 2011.

I will definitely be keeping a close eye on the conditions of Nasdaq’s internals in the future newsletter posts focusing on market breadth. As the volatility picks up, I am sure market internal picture will get more interesting and posts more in-depth.

http://shortsideoflong.com/

As Sunni militants continue their offensive in western Iraq, the price of oil is surging, as the markets read the unstable situation as further evidence that Iraq will be unable to sustain its oil production levels of around 3.3 million barrels per day.

The current flare-up in the Middle East has had the predictable knock-on effect on the shares of the major E&P companies, whose market values have all risen precipitously since Al Qaeda-breakaway group Islamic State of Iraq and Syria (ISIS) began swallowing up chunks of northern Iraq earlier this month. While the country only accounts for around 3.5 percent of global supply, the crisis comes amid earlier and ongoing conflicts in Syria and Libya, which have already disrupted nearly 2 million barrels a day of production. Should Iraq’s 3 mb/d be taken out of the equation, a price run beyond the current $105-$108 per barrel WTI range is a virtual guarantee.

With oil and other risk-on commodities such as gold and silver back in favor, investors would be advised to consider wading into oil stocks, particularly since E&P companies are some of the largest in the world and offer investors a relatively healthy, if not risk-free, dividend, even if growth targets fail to satisfy.

As the world’s attention stays focused on Iraq, here are five dividend-paying oil companies to keep an eye on in the weeks and months ahead. Factored into my choices below are a company’s current and past dividend payouts, its ability to sustain its dividend or increase it, and the company’s future profitability.

1.    BP (NYSE:BP). At 4.29 percent, BP is a standout amongst its peers for income growth, compared to Chevron’s 3.22 percent yield and Exxon Mobil’s 2.64 percent. The integrated oil and gas producer hiked its dividend by 2.6 percent in May, following the disposition of four of its North Slope Alaska oilfields. The $1.5 billion asset sale was part of a larger strategy by BP to unload $10 billion worth of non-core assets over the next two years, in an effort to underwrite dividend increases and share repurchases. The company has so far paid out about $42 billion in charges related to the 2010 Deepwater Horizon disaster. However, BP has maintained a strong cash position, with first-quarter cash flows of around $8.2 billion, allowing it to easily cover dividend payments of $1.4 billion, according to hedge fund analyst Winning Strategies.

2.    Chevron (NYSE:CVX). With a market cap of  $253 billion, Chevron is one of the world’s largest oil companies, and has rewarded loyal shareholders with 25 years of consistent dividend increases. In April Chevron raised its dividend by 7 cents to $1.07 per share, giving it a yield of 3.22 percent. Over the last 10 years, Chevron has managed to increase its dividend by 11 percent a year, without stretching its dividend payout ratio (dividend divided by net income), which stands at 39 percent over the last 12 months. Analyst Mike Young notes that if Chevron’s payout ratio stays at 35.2 percent and it earns 18 percent return on equity – its average ROE over the past five years – the company’s dividend will grow by 12 percent a year.

Related Article: Big Oil Is Cashing In On Iraq Violence

3.    Exxon-Mobil (NYSE:XOM). Exxon is the largest publicly traded company in the world, behind only Apple (NASDAQ:AAPL). With a gigantic market cap of $448 billion, Exxon-Mobil is a cash-generating machine, and should therefore be on every dividend investor’s radar. Like Chevron, XOM is a dividend aristocrat, having increased dividends to shareholders for more than 30 consecutive years. On April 30, Exxon-Mobil boosted its dividend by 10 percent, to 69 cents a share, and currently bears a 2.64 percent yield. As far as future dividend growth, analyst Stock Gamer determined that lower capital expenditures in 2015 and 2016 will cause free cash flow to increase by 16.8 percent (CAGR) to $16.7 billion in 2016, allowing XOM to spend $12 billion annually in share repurchases for the next two years. That, compared to a less leveraged position than its peers, would cause earnings per share to increase and thus create room for dividends to grow, at a rate of between 7 and 8 percent annually, according to Stock Gamer.

4.    Occidental Petroleum (NYSE:OXY). Occidental has a market cap of $82 billion and grants shareholders a dividend of 72 cents a share, giving the stock a current yield of 2.74 percent. OXY’s dividend has risen by 118.2 percent over the past five years, putting it in the company of Williams Companies, ONEOK, and Peabody Energy for comparable dividend yield and growth. However, looking at the revenue growth of these four stocks, Occidental comes out ahead, at 42.8 percent, notes analyst Stan Stafford, making it his top E&P choice for dividend investors. Moreover, with Occidental’s $10.2 billion of capital expenditures set to decline this year on the back of its spin-off of oil and gas assets in California, investors should expect the company to increase share repurchases, allowing it to hike earnings per share and create room for dividend growth.

5.    Enerplus (NYSE:ERF). Compared to the last four energy behemoths cited, Calgary-based Enerplus is a minnow swimming in a sea of great white sharks. Its $4.98-billion market cap is a fraction of the E&P majors, yet its 8 cents per share dividend gives Enerplus a decent yield of 4.06 percent. And with a dividend payout ratio of just 18 percent, investors are assured that a relatively small percentage of net income is being put towards dividends. While ERF was forced to halve its dividend in mid-2012 due to weak commodity prices, the future looks bright for the company. Last week, Enerplus announced a 250 percent increase in contingent reserves from its Fort Berthold Baaken and Three Forks formations, to 136 million BOE. That, combined with a 125 percent increase in drilling inventory and a 50 percent improvement in drilling efficiencies, spells growth for ERF, according to analyst Michael Fitzsimmons, who estimates the stock is 25 percent undervalued. “Enerplus is a BUY and a good choice for income oriented investors seeking exposure to capital appreciation via Bakken and Three Forks produced oil. I am raising my 12-month price target to $28. Combined with the dividend, that represents a total return opportunity of ~20% over the next year,” Fitzsimmons wrote on Seeking Alpha.

By Andrew Topf of Oilprice.com

Benefit From the Latest Energy Trends and Investment Opportunities before the mainstream media and investing public are aware they even exist. The Free Oilprice.com Energy Intelligence Report gives you this and much more. Click here to find out more.

#1. Dream Office Real Estate Investment Trust (TSE:D.UN.CA) — 7.6% YIELD

Click HERE or Chart to view 1-10 in much more detail – Editor Money Talks

Click HERE or Chart to view 1-10 in much more detail – Editor Money Talks

The 2 Stocks with potential are below as is Tyler’s training:- Editor Money Talks

The Trader’s Edge
There is life in the TSX Venture Exchange. After sliding since mid March, the exchange dominated by junior commodity stocks found buyers this week, breaking the three month downward trend. There is a good chance that this will begin a resumption of the recovery that started in January.

The Junior Gold Mining sector had another strong week but I expect short term profit taking before a possible resumption of the upward trend. This week’s rally takes the sector up to a long term downward trend line where sellers inevitably congregate to take profits. Expect a stall in the trend but be watchful for an eventual break of that downward trend line as a signal of strength.

STRATEGY OF THE WEEK

Each day, I use the Stockscores Market Scan tool to look for stocks trading abnormally. The Market Scan has filters that seek out statistically significant abnormal price and volume action, two important signals that investors are anticipating improving fundamentals, or at least an improving perception of fundamentals.

Here are two stocks that showed abnormal action recently and also chart patterns that make them stocks worth considering:

STOCKS THAT MEET THAT FEATURED STRATEGY

1. T.ORE
T.ORE has been trending sideways for about a year but came alive this week, breaking out through $0.75 resistance. The stock may finally be starting its recovery process after a lengthy basing period. Support at $0.65.

2. DRRX
DRRX recently had its Sentiment Stockscore cross above the important 60 mark, taking the stock in to optimistic territory. Abnormal price and volume action on Friday indicate investors are excited about something, giving the stock a good chance of filling in the price gap up to $2. Support at $1.44.

Stockscores Trader Training – Seven Ways to Take the Emotion Out of Trading
I think that many traders have a hard time believing that they can make money by buying a stock and waiting. Most of us are not taught to make our money work for us but instead that we must work for our money. Go to a job, put in the time and you get a pay check. Work hard, your pay checks will grow. But the thought that you can make money by putting your feet up is a difficult thing for most to grasp.

With that mental programming, most of us have difficulty holding on to our strong stocks and letting the profits grow. If we buy a stock at $1 and it goes up to $1.20 in a couple of days we are likely to sell. In some ways we think of this fast return as good luck, not much different than buying a winning lottery ticket. We have a fear that someone is going to figure out that we have benefited from a mistake and so we better get out now before we get discovered.

This thinking is strengthened when we own a marginal stock and it goes down as quickly as it went up. If we take a marginal trade we should expect marginal results but somehow we only remember the negative feeling of watching a paper profit turn in to a loss. We tell ourselves that next time we will sell at the first sign of weakness and crystallize the gain. Avoiding pain is human nature.

Our next trade is of higher quality but we sell it on a short term weakness and lock in a quick but relatively small profit. While lost in self congratulations we realize that someone named Murphy is writing the laws of trading and we watch the stock march ever higher with us eating the stock’s dust. We have jumped off of a high speed bus that is headed for Profit City.

So what is behind this destructive behavior? It is that deep routed emotional response to danger that keeps us out of trouble but also makes us avoid a greater feeling of fulfillment.

Fear is what makes us sell our winners too early and hold our losers too long.

The best traders are not afraid of holding on to strong stocks, they are afraid of holding on to losing stocks. What do you do?

If you are a normal human being, you do the opposite. Think about the last loser that you owned. As the stock fell lower and lower, what was it that you told yourself over and over?

“It will bounce back eventually, I will just be patient.”

What your subconscious mind was really saying was, “It is much too painful to sell this loser and see that loss of my hard earned capital. I will hold on with the hope that it goes back to what I paid for it and then I will sell.” And of course, it continued lower because there was something wrong with the company and it deserved to go lower.

So what can be done to fight our destructive minds? How can we program ourselves to hold on to our winners and dump the losers? How can we trade without fear?

Here are my Seven Ways to Take Emotion Out of Trading

Trade Quality
Our fears are confirmed when we enter marginal trades. If you only trade the best opportunities you will trade less but you will have greater success. This will put you on the road to fearless trading and help you to simplify the trading approach. Write down your rules and do nothing if every rule is not satisfied. When you consider a stock, look for a reason to avoid the trade. If you can’t find one then you have a trade worth taking.

Buy With Confidence
The rules that you trade with have to have a foundation of success. You have to believe in your rules or you won’t believe in holding the stock through the shakeout periods in the longer term up trend. Analyze and test the strategy until you have proven to yourself that it works. Then trade it slowly without a lot of risk so you can gain a greater level of confidence that it works.

Don’t Watch the Scoreboard
Sports fans don’t spend a lot of time watching the scoreboard during a game, it only matters when the game is over. In trading, the scoreboard is the profit and loss figure for your account. If you focus on the scoreboard it is likely that you will lose sight of what is happening in the game. As a technical trader, all that matters to me is what the chart is telling me.

Plan Your Losses
Before you enter a trade, figure out what needs to happen for you to consider the trade a loser. For me, that is a move through chart support; I plan to exit the trade when the stock goes through a psychological floor price on the chart. Understanding where that point requires some experience and knowledge but once you know how to identify support on the chart, plan your losses.

Plan the Trade
I find it helpful to predict pull backs. My rational side knows that stocks cannot go straight up and that they must suffer pullbacks to recharge buyer interest and shake out weak holders. My emotional side feels fear when those pull backs happen. If I plan my trade and build in expectations for the counter trend pull backs I can deal with them better and have a greater chance of not succumbing to the fear when they do.

Don’t Fall in Love
I don’t want to know too much about what a company is doing because I have found that the more I like a stock the more likely I am to not listen to the message of the market. There is a lot of bias in the information that we receive about companies and what they are doing. The ultimate arbiter of truth is the market itself; we should have a greater faith in the opinions of thousands of market participants than a few biased sources of information.

Tolerate Risk
Without risk, there is no potential for return. To avoid trading with fear we have to be comfortable with the risk. If not, we will let fear guide our decisions and those decisions will probably be wrong. Therefore, do not take more risk on a trade than you are comfortable losing. Plan your losses based on how much you are willing to lose and let that determine the size of your positions.

The Profit is in the Patience
When a trade is working, let it work for you. A business owner does not fire her best employee. A hockey coach does not send his best player to the minor leagues. A company does not stop making their best products. Hang on to your best stocks with the same attitude. Hold the stock until there is a rational reason to exit the trade rather than selling because it feels good. If you are taking quality trades and trading without fear, you will feel better over the long run.

The time to get started on your reprogramming is now. Don’t expect to break habits built up over a life time in a couple of days. The battle against your fears is one that takes time win but with determination you can do it.

References

• Get the Stockscore on any of over 20,000 North American stocks.
• Background on the theories used by Stockscores.
• Strategies that can help you find new opportunities.
• Scan the market using extensive filter criteria.
• Build a portfolio of stocks and view a slide show of their charts.
• See which sectors are leading the market, and their components.

   

Stockscores Market Minutes Video
A look at Gold with a focus on how the chart time frame will change the outlook for a trade. Plus, Tyler’s regular weekly market analysis, watch the video at

http://youtu.be/NoktguCylLU

Live Webinar Tuesday June 24 6:30PT, 9:30ET
An Introduction to Active Trading – This free webinar will highlight the tools and processes used to actively trade the stock market using the Stockscores strategies. If you have ever thought about making trading a full or part time occupation, this webinar should not be missed. Stockscores founder Tyler Bollhorn will show what he does each trading day to find and execute his trades. Register at:

https://attendee.gotowebinar.com/register/6772855646720316162

or use the link on the Stockscores.com home page.

Disclaimer
This is not an investment advisory, and should not be used to make investment decisions. Information in Stockscores Perspectives is often opinionated and should be considered for information purposes only. No stock exchange anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. The writers and editors of Perspectives may have positions in the stocks discussed above and may trade in the stocks mentioned. Don’t consider buying or selling any stock without conducting your own due diligence.

We Americans are watching the events unfold in Iraq with great trepidation. Rising terrorism and rising energy prices. Déjà vu all over again.

And gold is reacting, soaring like a bat out of hell. Up more than $50 last Thursday alone.

A huge move reminiscent of the blastoff phase in late 1978 when gold exploded from a low of $193.40 in November to a high of $875 in January 1980 — a parabolic 352 percent move higher in the price of gold in a tad over two short years.

Thus far for June, gold is up an amazing $82, almost 6.7 percent. Mining shares are doing even better, with the ARCA Gold Bugs Index up 16.7 percent.

The chart shows Basket of gold miners up 16.7% in 20 days— while some of my favorite miners are up even more, as much as 40% in 20 days.

These are real moves. More importantly, they are market moves that tell you that it’s not just us Americans who are worried about the world and starting to buy gold again. The entire investment community — and anyone in their right mind — is worried.

That’s not surprising, considering the sorry state of affairs the world is embarking upon.

It’s not surprising, considering that I have warned you repeatedly of the ramping up of the war cycles. Cycles that govern human social interaction on a grand scale, cycles that can be quantified and used to forecast periods of peace and war, periods of civil unrest and international conflict.

And those cycles are now ramping up and converging in the worst possible combination of forces not seen since the late 1800s.

These are the cycles that are responsible for all that you are now seeing …

– Russia versus Ukraine and other former Soviet satellites, versus Europe and the U.S.

– The reign of terror by the Islamic State in Iraq and Syria (ISIS) in Iraq. This group of terrorists is so violent andextreme that they were kicked out of Al-Qaeda. And now they are the most well-funded terror group in the world with nearly $500 million in the bank and they are ravaging Iraq and headed on to Jordan and other Middle Eastern countries.

– Nigeria, where Boko Haram Islamists have killed hundreds of villagers and kidnapped hundreds of women by posing as Nigerian soldiers, rounding everyone up, and opening fire.

– Kenya, where the Al-Qaeda affiliate Al-Shabab terrorist group is responsible for the recent bloodbath that took place in Mpekeoni, a well-known tourist area.  And where nine more people have been massacred by Islamic extremists and Al-Shabab in the coastal areas … and an additional 48 World Cup fans were killed in Mpeketoni.

– Pakistan, where more than 70,000 civilians are now homeless refugees, fleeing from government troops who killed 105 militants in North Waziristan’s Shawal area.

– Canada, where a Calgary suicide bomber who killed 19 Iraqis has become a propaganda tool for jihadists, who are urging Muslims to follow his “great example” and threatening Canada to change its “oppressive” foreign policies.

– China, where the Chinese government recently executed 13 people in the Xinjiang region who were found guilty of organizing and leading terrorist groups, as well as murder, arson, theft and other crimes.

– China versus Japan, Vietnam, Indonesia, Malaysia, the Philippines, in an international dispute over the Spratly and Senkaku Islands and their vast oil and gas reserves … and where China is claiming territorial jurisdiction, seizing land and waters away from countries, a dispute that will ultimately lead to an international war.

– Then there’s Syria, Yemen, Egypt, Turkey, Iran, North Korea, Venezuela, Myanmar, Libya, and a host of other countries where violence is rapidly rising.

All told, there are now a record 61 countries involved in wars and 540 militia, anarchist, religious and separatist groups.

And lest you think the turmoil you are seeing is all terrorist-related, or isolated events that do not impact you, think again:

The rising war cycles are also about bankrupt, destitute governments that are now acting like caged animals, striking out against their own people …

By raising taxes, engaging in confiscatory wealth measures and capital controls, by spying on their own citizens and more.

Consider:

– Last March’s Cyprus confiscation of depositor wealth to bail out Cyprus’ banks, a policy that has now been embraced and legalized for all of Europe. Have money in a European bank? Good luck, if it goes under, your money is at risk of being confiscated.

– Last September’s confiscation of retirement accounts by Poland’s government. Fully half of all private retirement assets transferred to the state without offering retirees any compensation whatsoever.

– France’s SEVENTY-FIVE percent income tax. And to counter, where France’s Marine Le Pen’s Front National is championing a recent report by well-known French economists that concluded that 60 percent of French public debt is illegitimate, sowing the seeds for a French sovereign debt default down the road.

 – Argentina, where massive sovereign debts are now unpayable, and confiscatory measures against pensions are now in the planning stage by President Cristina Kirchner.

– Or Washington’s incessant spying on YOU, all designed to track everything you do, every penny you spend or squirrel away.

In short, all over the globe the rising tide of geo-political unrest is occurring at a pace at which even I underestimated.

You may think all these conflicts are unrelated … or the
result of religious extremists … or that they have no impact on you.

But mark my words: Look closely, as I have done, at all of the conflicts around the world — whether religiously inspired or not — and you will see two common threads:

1. Private sector groups rising up against authoritarian, unjust, corrupt and imperialist governments.

2. Private sector groups rising up against governments that want to increase taxes or even confiscate wealth while, at the same time, levying austerity measures on its people to slash previously promised benefits.

In lesser developed countries, it’s the result of government corruption, imperialistic actions taken by developed countries, pillaging of natural resources, and more. Yes, they are shrouded in religious, especially Islamic extremism …

But when distilled down to the truth, the forces driving them are no different than the forces that are driving the civil and international unrest you are now seeing in developed countries.

It’s merely a matter of degree. Yet an impartial and objective study of the forces that are driving the war cycles higher — wherever in the world they are playing themselves out …

Can all be distilled down to a great battle between the public and the private sectors.

These are the chief reasons gold and 
silver are now starting to explode higher.

And why gold will likely fetch well over $5,000 an ounce a few years from now … silver to more than $125 an ounce … and mining shares,  to the moon.

Best wishes and stay tuned,

Larry

The post War Cycles Sending Gold, Mining Shares SOARING! appeared first on Money and Markets – Financial Advice | Financial Investment Newsletter.