August 22, 2018
"Stocks in the Spotlight's"
A CURRENT UP-DATE
Nasdaq symbol in ( ) = Quote
-- News in ( ) = news
on each will take you there
Week's Closing Indices
The Economy Is Screaming - Expect It To Continue
The Markets Are Still Quite Bullish!
My Best Guess would
be the markets are going to continue moving up and down, with a leaning to the upside, until the
Mid-term elections in November. Having the Value Line & SPREAD
hitting new all-time highs is one of the most bullish signs we might
the Democrats regain the House we will need to get out of the markets
as fast as the Flash, however, if the Republicans hold on, and possibly
gain seats in the Senate, the markets will climb at rocket speed, and
possibly all the way to the end of the year, and then some.
Our problem is still the same either way. Are the markets capable of
climbing enough to make buying here worth the risk? If they keep moving
sideways any gains will be slight and the current overpriced ones
will become even more overpriced.
However, if we don't chase the big winners, but find a value stock
instead, a lot of money can still be made. There is little reason for a major
negative globally until November. Possibly increasing interest rates, tariff's and a trade war
could slow down the markets but this has many unknowns and all tend to favor the good ole USA.
The newest problem would be the new tariffs and possible trade war, but
no matter how it turns out the US will come out on top, simply because
other countries have been taking advantage of the US for decades and it
is going to stop.
People are worried that the tariffs will stop the big growth we have
experienced lately. Maybe in the beginning but we closed our
factories and stopped making products we needed right here in good old USA
and started buying elsewhere.
follow me on this one. If other countries decide to raise their
tariffs on us, and they do so, it will simply force our country to
start opening factories here at home where we won't have to worry about a
tariff and won't have to sell them anything. Buy American will only grow.
What happens next is the foreign country that overcharged us will no
longer be able to sell us anything because we will be making it
ourselves, therefore, I believe many of countries will drop it's
tariff on us early in the game in order to continue doing business with us.
we have heard about a steel manufacturing plant that has canceled a
new factory in China and will be building it in the US instead. Also,
we heard about a steel manufacturing plant in the US that is reopening.
Soon we can buy steel from our own companies and never worry about any
I believe the
return to manufacturing here in the USA will lead to an explosion in
new jobs that could last a long time and the markets could easily
continue to climb with the ever increasing economy.
Since I believe the big OTC stocks tend to lead the markets, the new highs on the SPREAD & Value Line should
mean higher ground ahead. As long as the VL & Nasdaq
fair better than the NY the rally should still be on track. Its when
the NY starts doing better then the VL & Nasdaq we have to worry.
My rule is: The markets cannot rally very long without the big OTC stocks.
DOW 30 chart below is an average of all 30 of the Dow Jones industrials
and what percentage the total are away from the 52-week high. I use it as a
measure of when markets are undervalued, or overvalued, simply
because these 30 stocks are carried by just about every fund there is.
Keep in mind, since it is a discount, the percentage can never be in
The record for the
discount to the 52-week high is - 2.87% reached on 1.8.2010.
The maximum discount was -52.76 on 11.20.2008 showing just how far this index can move. Currently the discount rate is -8.43%,
meaning there is quite a bit of "wiggle" room to continue improvement, but the nearer the
average of all 30 stocks come to the 52-week high the more overvalued they become. In 2016 there were 24 that reached a new 52-week high, 25 reaching a new high in 2017 and 26 so far in 2018.
This discount had
been trading mostly between -9% and -13% so far this year, with a breakout to more than -13% about 2 times.
once an index or stock sets a new high the next new high is easier to
only has to
break the current one by 0.01%. Also, Once the previous 52-week high
it is easier to set a new high. The DOW 30 has set a new high more than 100 times since the election.
of losing profits will be the reason forcing the markets down
rapidly, which in an overvalued market is, and should be, expected.
Nothing goes up forever, however the new tax cuts for corporations will make a big difference in valuations and provide much
fuel for the bull to keep charging.
trend is our friend and it appears to be leading the markets on a roller
coaster ride through the last few weeks of the 2nd Q and continuing
through July and August.
The markets could continue this way all the way to the November
elections, but if the demo's win Congress get out because the drop will
We need to keep our cautious shoes on and tread through the bargains.
Look for the deals and look at newer and start up
companies and do the homework.
A best bet might be a small stock that reads good and offers a
decent chance. Small stocks tend to trade on their own and are not as sensitive to the overall market. It needs to be trading near the low-end but with a
reason to climb. Again, they are out there. We just have to search hard
to find them.
May Be The Best Place To Be
Considering the markets are trading so high Small Stocks might be the better bet!
can be made on low-priced stocks, unfortunately finding a good one is
harder than finding a new gold mine, quite a bit harder.
There are more scams in low-priced stocks than Carter has Little Liver
we dig 100 gold mines we will probably find something, but if we look
at 100 penny stocks we will be lucky to find one that is worthy of
further research. This tends to be my story. Still, it is worth the
time because once we discover a good one big money can be made.
very important things we need to know is the history of the price and
the amount of shares held by the public (float). Also we need to glance
at the total outstanding shares because this includes the insiders.
rule is if the outstanding is over 100 million shares close the books
on that one. Since small stocks move because of "supply &
demand," if there is too much supply the stock
rule is that "volume is King" but this does not necessarily mean big
volume. Big volume in the wrong place, or time, or both can be very
bearish. A good example would be a penny stock remaining at the same
price for a long time but trading strong daily volume would be telling us
that the market makers (floor specialist) have "enough big sellers to
handle all the buyers."
a stock trades heavy volume it will move up, if buyers, or down, if
selling but it should not stay where it has been staying.
have never seen a market so strong with so many big stocks trading so
high as the current one. This is where "trickle down" economics comes
into play as we trickle down to smaller stocks.
am currently looking at several small stocks, but finding it hard to
find a "winner" and as soon as I come up with what I think is a "real
deal" I will let you know
Powin Energy - (OTC-BB) (PWON) (52 week range 0.30 - 5.00 ), now at $1.80.
A leading manufacturer of fully integrated energy
storage solutions is a company with a future. The stocks has low
volume and keeps bouncing higher and falling back. Money can be made
here if we have patience. Just not an exciting stock but a great
From $0.30 to $5.00
From $1.75 to over $21.18
Advanced Micro Devices (AMD) (52 week range 9.04 - 21.18 ), now at $20.84. AMD
has been a big winner from our original buy at $1.75. AMD increased
estimates for the Q and the stock has been hitting new highs. Its hard
to buy after such a big move but strong news combined with a strong
economy could keep this one climbing. We could see over $28 yet this year.
From $0.27 (4.16.2007) to over $33
Fonar Corp. ( FONR ) (52 week range 17.20 - 33.90),
now at $26.30. I first started following
Fonar in 1982 and have followed it every day since. Great products would
be the reason to own this stock. The current PE is only 10.52.
has been a favorite of mine for over 30 years. A strong growing company
with an unusually low P/E ratio in the medical product industry makes
this company of it that for anybody. The problem is the stock is
trading to near the high and has a habit of easing back down again,with
support between 24 and $25.
No matter how much I like the stock near-term entry is best if under $25 with a move to $33 possible this year.
Up From $22.10 to over $35 since February
Comtech Telecommunications ( CMTL ) (52 week range 17.11 - 35.97), now at
$35.67. CMTL is a stock
to own for the long term.
only buy area that I like right now would be the $22 support level with
the stock to high for entry at current levels, although the stock is on
a steady up trend and a continued strong market would lead to higher
ground, with my target near $40. The current PE is 28.81.
In closing I would like to mention that one of the worst things we can do is buy stock in a young penny stock company that has already issued, or is going to issue too many shares too low in price.
market makers love too many shares as it keeps the price low making it
possible to short millions of shares, which prevents the stock from
a quality small stock "to buy" with not too many shares owned, near the
low, will be very hard but once found the rewards can be plentiful.
If you have a situation, or questions, please feel free to contact me.
I wish you all good luck!
J.R. Budke became a stock broker in 1981, an options
principle in 1982 and a branch office manager in 1987 and a National
Sales Manager over 150 stockbrokers. He is currently
inactive as a stockbroker as of 12/31/99. J.R. writes the articles and
opinions for the Stocks in the Spotlight. The stories and stocks found on this
site, or any "Stocks in the Spotlight" written material, are the
opinions of J.R. Budke unless other wise stated, and should not be
considered as advice. You should not purchase any stocks
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reader must understand that the companies we select may involve a high
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|The recommendations and updates in this "Current Up-Date" may
include "forward- looking" statements as that term is defined in the
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