This One Number Makes Me Think the Rally Is Over

This week I heard from a reader with a question I bet is on every investor’s lips.

Q: Michael, Excellent written article … However, I am curious on your “take” as we move into fall and December – What about the notorious “Christmas rally”? ~ James B.

A: James, the S&P 500 has rallied a remarkable 13% in the last five weeks, recapturing all of its summer losses. The Dow Jones Industrial Average jumped by 8.5%, while the S&P 500 soared by 8%, and the Nasdaq Composite Index outdid them both with a 9.38% performance. Even more noteworthy is that the three major indices have done this in the face of unrelentingly poor economic data. (More on that in a minute.)

So it’s no surprise you’re wondering, as we sit here in the first week of November, whether Santa Claus came early or whether the market will keep “melting up” through the end of the year. And I bet you’re not the only one.

Here’s the number I’m looking at…

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Here’s How to Make My “Favorite Trade” on VRX

You’ve asked me for specific trade recommendation to bet against the rotten company we’ve been tracking, Valeant Pharmaceuticals International Inc. (NYSE:VRX).

Today I’ve got a really good one for you that I think could bring a huge return – fast.

First a quick update.

Valeant Pharmaceuticals has thrown in the towel on its questionable relationship with Philidor Rx Services, LLC, the shadowy mail-order pharmacy company through which it was selling 7% of its drugs. Early this morning, VRX issued a press release announcing that it is severing all ties with Philidor and that Philidor had informed Valeant that it will shut down operations immediately consistent with all applicable laws.

Unfortunately, these moves come too late to save the reputation of VRX’s management.

Keep reading.

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