The markets have had a nearly 5% straight-up move since the most recent bottom was put in last Friday morning. On the one hand, there's that old saying, which has some merit: "The biggest rallies happen in bear markets." On the other hand, that Friday bottom is a higher low that the chartists will have to respect.
I still think there's a lot of money managers out there who are underexposed to the markets and were worried we could get a 2008-like meltdown but are now starting to cover/buy more stocks as the market runs away from them. Certainly there's a possibility that we drop back to the August lows, but feet to fire, I think the path of least resistance for the stock market is higher into year end.
In the meantime, here's a mid-week must-read roundup for you, with my commentary for each headline.
Gold Bulls Will Take What They Can Get and Dougie the Gold Bug! -- I think gold might stall out here near $1,200 on the high end and $1,100 on the low end for a while. I'm still holding some of my Market Vectors Gold Miners ETF (GDX) call options and am up nearly triple on some of them at this point. I might look to trim them again soon.
Sens. Bernie Sanders and Elijah Cummings are investigating sudden hikes in the costs of older medicines -- Another example of the growing crackdown on biotech/pharma pricing. I recently got back on the short side of biotech with some puts. It should be a great hedge to our broader net long portfolio.
In-App Facebook Retail Could Be Huge for FB Stock -- Facebook (FB) is still the best-run app company on the planet. Remember when Yahoo! (YHOO) paid $1 billion for Tumbler about the same time Facebook bought Instagram for the same amount? Tumbler has done nothing for Yahoo. Instagram just passed its 400 millionth user and is worth at least tens of billions of dollars now.
Twitter Goes to Google for Executive Chairman -- Jack Dorsey's come back and probably is trying to clean up some of past CEO Dick Costolo's initiatives and/or in areas within Twitter (TWTR) that he thinks have gotten away from the core places he's going to focus on. He's got an eye on profitability as revenue continues to grow quickly. Sad for the employees being laid off, but probably good for shareholders long term to keep the company fine-tuned and focused. The CEO and chairman and their choices about setting priorities and shaping the company certainly make a difference over time. These two could be the next Terry Semel, who never seemed to steer Yahoo! correctly and saw shareholder value destroyed during his tenure, or they could be the next Eric Schmidt, who oversaw big growth and a rise to dominance as CEO of Google (GOOGL). (Facebook, Twitter and Google are part of TheStreet's Action Alerts PLUS portfolio.)
Carly Fiorina's Troubling Telecom Past -- I think Fiorina was a failure at both Lucent (ALU) and at Hewlett-Packard (HPQ). Here are some details of her shenanigans while running Lucent. Her time at HPQ oversaw the worst merger in its history and set the company on a path of destroying hundreds of billions of dollars of shareholder value.
Goldman Sachs Earnings Are Moving to Twitter --This is part of what I'm talking about when I have said Twitter is going to be a huge news media platform. The Wall Street firm plans to disseminate its earnings report through its website and Twitter feed, eschewing independent business wires. Twitter's become a de-facto standard for disseminating real-time news and there's no competition for Twitter in that regard. I bought more Twitter common stock for myself today.
Black Swan Risk Rises to Highest Level Ever -- This headline makes me bullish-er. I mean, "Ever?!" Haha.
An Investing Lesson: Admit Your Mistakes -- Like I said, I'm bullish and getting longer stocks.
These New Earbuds Use Hearing-Aid Technology That Enables Them to Be Truly Wireless -- Pretty cool idea and the case itself is very cool as you won't lose your headphones.