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U.S. markets spiked on Tuesday and international shares followed suit on Wednesday, aside from markets in Europe, after housing and durable goods data provided another round of reassurance that the economic recovery in the States was well on track. Concerns in Europe remained, however, even after a bailout deal was reached earlier in the week in regards to Cyprus. The fact that large depositors in the Cypriot banks were 'taxed' heavily as part of the deal concerned investors across the European continent and applied pressure to regional markets and the euro currency, too. Markets on this side of the pond continue to disregard the Cyprus news, but the longer it affects Europe, the potential increases that investors over here will become somewhat concerned as well - but as long as the encouraging economic data we've seen continues moving forward, a large-scale pullback will be viewed as improbable. Especially given the likelihood that America is about to witness its first real budget deal in years.

The stability we've become accustomed to during the early-year record setting uptrend looks to have been replaced by more volatility, if the past few trading sessions are to be a judge, so it could be inching back towards a trader's market, whereas the "buy and hold" crowd has done quite well so far this year. If the overseas markets are an indicator for Wednesday, though, another up day could be in the works.

As the broad-market stories continue , there are still plenty of individual stocks and stories to keep an eye on. Here are just a few of them for the week of March 25, 2013...

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The trading week brings with it heavy anticipation. The DOW has been setting new record highs left and right these days and the S&P may be positioned to do just the same. The momentum built into last week's close favors a continued uptrend this week, although there are multiple major news stories still developing that could quickly come into the picture and create the uncertainty needed to lead to the volatile trading that has been relatively non-existent during the DOW's record run. Leading the way in terms of headlines is Cyprus, where indications over the weekend were that a 'Plan B' bailout deal was on the verge of being reached. Many are concerned that the fiscal fiasco still evolving on the island-nation could spill over onto mainland Europe, but many investors now consider the ordeal as an isolated incident relevant more to Russia than to Europe as a whole. Early Monday headlines indicated that a plan was in place, pending a little bit of cash-raising from Europe to cover the bailout package. While the situation will still be monitored with caution, relative calm should prevail and Cyprus could disappear from the headlines just as quickly as the Yankees' playoff chances - and the Greek debt crisis, which we haven't heard from in a while...

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Another day, another deadline - such is the merry-go-round of Washington. In a last ditch effort to thwart off the potential impact of sequestration on the economy, the U.S. Senate on Wednesday passed a budget that is en route to Congress for its stamp before possibly reaching the President's desk and potentially becoming the first approved budget in years. Of course, that's still an uncertain proposition, given the long-lasting stalemate between the two political parties, but the country is as impatient as ever with the status quo and the politicians know that their political capital is spent, making it likely that a deal will be reached this time. After all, another election season is quickly creeping upon us (although it'll be an off-year season) and the viability of some political careers may be on the line.

The new deadline to get a deal done is 27 March, enough time to halt the building momentum behind planned budget cuts and the furloughing of government workers. General market action seems to indicate that few are panicking over this date, as world markets generally traded favorably on Thursday, more interested in comments from the Fed over the past two days than anything else.

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Markets worldwide continued to trade relatively flat leading into Wednesday's trading day as uncertainty stills abounds in relation to the Cyprus bailout package that some believe could pose a threat to the stability of the still-rebounding global economy. As discussed earlier in the week, however, concerns over a drastic backlash against the eurozone (EZ) economy based solely on the instability in Cyprus may be overblown, as the ordeal looks to be one more involving Russia and Cypriot banks than anything else, but fears will remain, nonetheless, that a similar situation could arise in Greece, Italy or Spain - countries whose failures could greatly effect the health of the European economy. That is likely the reason why European shares fell rather significantly after the recent Italian elections, but have only been modestly effected by the Cyprus fiasco.

On this side of the Atlantic investors can be reassured the Fed will maintain its current measures of stimulus as long as long as uncertainty exists globally and in Washington, according to comments made during day one of a two-day meeting. As a result, investors - who currently look to be in a holding pattern following the early-year record run - can be reassured that no broad changes to current conditions are forthcoming, pending the result of budget talks and a clearer picture of what sequestration may bring. Initially, it looks as if the doomsday scenarios laid out before the 1 March deadline kicked in were more fear-mongering by Washington than anything else, but also keep in mind that the full impact of any newly-implemented measures is not expected to be felt until 1 April or beyond...

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Tuesday proved a day of modest rebound for international markets, most of which were hammered on Monday on fears over the Cyprus bailout plan and how it could potentially hit the rest of Europe. Futures action indicate a similar open in the US as well. Investor caution has eased once the Cyprus bailout news was digested and the fiasco became more of a comedy show between Cypriot banks and Russian billionaires than anything else as markets stabilized, although initial concerns arose when some pundits wondered whether the savings tax proposed in Cyprus could also be implemented in other Western countries, but those concerns are largely considered unfounded because of existing regulatory measures in other eurozone (EZ) countries and also because of the unique relationships between Cypriot banks and its foreign investors, like Russia.

It's highly unlikely that any scenario evolving from the bailout of Cyprus will have any lasting effects on the rest of the EZ economies, hence Tuesday's more enthusiastic trading. The situation has, however, caused the euro rate to drop a bit in relation to the dollar, but that should cause little concern to investors and do more to satisfy the budgets of any dollar-bearing tourists ready to start taking advantage the spring holiday weather in Europe...

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Although the DOW closed modestly higher on Tuesday, the trend was lower for much of the day and the other major indices finished in the red.  Headlines swirling Tuesday evening and Wednesday morning hinted that the record-setting rally of 2013 may be losing some steam, but the question is whether that means a plateau was hit and we're in for a period of sideways trading or whether concerns of sequestration and a still-sluggish global economy will push the markets lower again.  World stocks indicated on Wednesday that the latter may be modestly true, but as we've discussed before, US markets don't typically follow trends, they set them - barring unforeseen developments from overseas that could heavily impact global markets.

Should investors go looking for reasons to support the argument that the rally has lost steam, discussions of Europe's hardly-recovering economy and the potential impacts of sequestration could lead the charge.  Europe's continued woes have been largely ignored during the early-year rally, but could quickly become a factor over the near term, while sequestration may become a non-factor if Washington finally rallies itself and comes to an agreement.  There's little doubt that voters are tired of the inaction and recent polls indicate that no side of the fence is immune to criticism over the current stalemate - and that might be enough to nudge these guys in the right direction, if they feel that their own political fate or the fate of their party is on the line. 

So far, Washington in 2013 has been about as productive as A-Rod's playoff bat.  So far that fact hasn't effected the markets at all, but another 'missed deadline' for a budget deal combined with massive cuts could set us down a notch or two.

As the major stories play out there are still plenty of individual stocks and stories to keep an eye on. Here are just a few of them for Wednesday, 13 March 2013 ...

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A large part of investing in the speculative sector involves staying one step ahead of the game - finding the next big thing - the latest fad, brightest technology or newest bull market - before the other guy does.

For instance, those who dabbled in the 3D printing market before the hype hit the market hard could have made huge gains by jumping into 3D Systems Corp (DDD) before it tripled from its lows and - taking the healthcare spin - Organovo Holdings (ONVO.PK), which also posted a triple at point leading up to the bubble. Although the bubble burst and those companies have now seen their share prices retreat rather significantly, the point was made that 3D printing is here to stay and the strength of the sector should be taken seriously. Those who figured that out before the market made bank.

In the healthcare and biotech sectors, staying one step ahead of the game may be a bit tougher, as an epidemic of any type could hit at any given time with little or no notice.

That said, finding next-generation drugs while they are still in development can pay off handsomely for those with the patience to wait the story out, while maybe trading a few shares here and there to make sure at least some profits are had along the way. Dendreon's (DNDN) Provenge can be viewed as just such a present-day, but next-generation product, as it targeted an existing disease, prostate cancer, and then effectively ushered in the next generation of the cancer immunotherapy treatment. The DNDN share price, as a result, jumped from roughly three bucks to well over forty at one point along the way.

Searching for the newest trends can help investors, who need to have a little time on their hands, find the next bullish market before those markets hit overdrive. The sub-sector of diabetes treatment is one such market that looks like it could be lining up for take off, given the trends we will discuss below, although it's arguable that this sector has been heating up for years now, as more and more humans survive on fast food, sugary drinks and exercise that only includes couches, office chairs and golf carts.

Below we'll take a look at a disease that is quickly becoming one of the greatest burdens on the global health care system and a few companies that could play a large role in the sector for years to come, but may still be trading relatively below the radar...

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Another day, another DOW record. The boost provided by last week's encouraging jobs report looks to have carried over into the new trading week while it also looks like investors are continuing to brush off any negative effects that could come into play as a result of sequestration. Those predicted effects my never come into play anyway, given the fact that Washington has issued itself a new deadline to reach a budget agreement and our elected officials are talking to each other again - after cringing at the bad press both sides received as the last deadline expired.

Shares continue to inch higher, defying the odds and the predictions of most experts and analysts, but at some point investors should assume that "what goes up" has to pull back and consolidate, especially with the amount of uncertainty still existing on a global scale. The U.S. recovery looks solid, given the most recent jobs numbers, but it wasn't too long ago that GDP was reported as down to flat. We also cannot ignore the fact that budget cuts in Washington are likely coming - sooner rather than later - and the impact of cuts made now likely won't be seen until a month or two down the road.

Additionally, the Fed cannot maintain its current rate of stimulus forever. At some point the training wheels will have to come off...

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Record high after record high is what we saw from the DOW last week and investors will look this week to see if the momentum can carry over after a strong jobs report on Friday dropped the US unemployment rate to 7.7%.  236,000 jobs were added in February, well above previous estimates, and many see this as a positive sign that the economy continues to gain strength and is well on the road to a full recovery.  Since the markets generally look ahead by a couple of quarters, the record highs could be justified, but the question is whether or not they can be sustained over the short term without any volatility entering the picture.

That question holds extra weight right now as the true effects of sequestration, which are still set to come into play in April, are still unknown.  A harsh round of budget cuts and pullbacks could knock down the merry market mood just a notch, as ancillary evidence still exists - jobs numbers aside - that the economy is not yet healthy enough to grow substantially - if at all - without the help of the Fed's stimulus measures that have been in place since the depths of the recession.  Look to 2012's fourth calendar quarter as evidence of such, when a pullback in defense spending caused GDP to roll flat for the quarter, only after being revised higher.

Although Fed Chairman Ben Bernanke last week indicated that there were no immediate plans in place to lighten up on the stimulus measures that have been in place since the depths of the recession, Friday's enthusiastic jobs report has refueled talk from many analysts and pundits that it makes little sense to keep these measures in place while the economy looks to be gaining strength on its own accord, while February's jobs numbers speak for themselves.  A reversal from the Fed that indicates stimulus might be lightened could temper the market's early-year rally.

This week will be a light earnings week, with only a few major holdovers left to report.  Attention will be strictly paid to the debate that will likely rage over how much of an impact the pending sequestration will have on the new record highs. 

It's been a definitive year of rebound thus far, and many would agree that - in retrospect - the markets are flowing on a stronger foundation now than they were when the old record highs were set just before the crash, but we've likely not yet approached the light at the end of the tunnel.  Caution against going 'all in' at this point may still be advised, as any economic news that again creates uncertainty could quickly have an impact on the upwards momentum, as evidenced by the election news in Italy a few weeks ago that led to a DOW drop of more than two hundred points.

Enjoy the ride while it lasts.  As always, there will be plenty of individual stocks and stories to keep an eye on while the major news plays out. Here are just a few of them for the week of 11 March, 2013...

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Shares of Implant Sciences (IMSC) traded higher by nearly seven percent on Wednesday morning after dropping to as low as $1.05 earlier in the week. Although some recent events may hamper IMSC's immediate potential to excel, such as the fiscal cutbacks in DC resulting from the inability of our elected officials to efficiently run a government or a budget, others have taken shape that put the company on a more stable foundation moving forward. In a summary of this week's events thus far, VFC's Stock House examines the latest Implant Sciences credit extension with DMRJ and also takes a look at how the budgetary turmoil in Washington could effect the short term potential to land national-level contracts or sales.

Implant's Credit Extension Marks Potential Pivot Point

With the announcement last weak of Implant Sciences' (IMSC) deal to extend the terms of a debt agreement with its primary creditor - DMRJ Group - for a full year, investors and company officials can concentrate fully on the building of sales, revenue and - with a recent TSA approval in the bag - the path towards becoming a dominant player in the ETD and homeland defense markets. Implant had last year already extended this agreement through the current month. In retrospect, this move looked to be a temporary fix in order to allow for the TSA approval to come to fruition, but the year-long extension allows ample time for the business to grow and the for the company to gain the means and resources to pay the portion of its debt that has not been converted into the convertible notes outlined in the press releases associated with the said credit agreements.

In noting the recent IMSC share price dip, short term credit concerns and uncertainty may have prevailed and curtailed enough investor interest to cause the drop. The relatively light volume, however, also indicates that many investors continue to hold to see this story - which is still in its early chapters - play out...

 

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A new DOW record is in the books and world stocks were moving higher on Wednesday as a result.  As mentioned earlier this week, we're at a serious pivot point now as to whether the markets can sustain these or whether a pullback will materialize based on the developments of other general conditions and geopolitical events.  A positive private jobs report on Wednesday AM was key in determining the strength of the new record over the short term, but investors will now look towards the effects of sequestration and how budget cuts can have an impact over the coming weeks. 

Most of the expected cuts that were regarded as a doomsday scenario by many politicians leading into the March 1 deadline, however, are not due to be implemented until the April time frame, according to the most recent reports from Washington.  That allows more time for our elected officials to come up with something solid in terms of a budget for the first time in years, but it also leaves us in a position where investors could feel complacent with the bullish momentum just before the real impact could be seen.  Many government programs are slated to lose at least portions of their funding and - maybe even more important for the already sluggish recovery - federally paid workers could be in for a slate of pay cuts and furloughs.  Those cuts could offer the markets a look at the potential impacts of having an increasing portion of the population relying on government money, whether it be through government jobs or handouts. 

For the time being, investors are satisfied enough with what Fed Chairman Ben Bernanke had to say last week to keep the markets elevated, but now is also not the time for complacency.  With the uncertainty regarding budget cuts and federal furloughs, investors should prepare for multiple eventualities, which includes positioning for a pullback, should one - no matter how modest it may be - materialize.

Over the short term, the job numbers are the key indicator to watch, but in the absence of a budget deal - and the politicians don't look to be in a rush to push one through - watch for signs of how sequestration could impact consumer spending, consumer sentiment and overall growth.

As always, there will be plenty of individual stocks and stories to keep an eye on while the major news plays out. Here are just a few of them for Wednesday, 6 March 2013...

 

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AntriaBio, Inc. (ANTB) remains a stock to watch this week, as outlined in this week's 'Weekly Stock Watch,' due to a notable increase in trading volume over the past couple of the weeks and the advancement to human trials of a once-weekly basal insulin shot that has the potential to eventually replace the current standards of care, which includes once-or-twice daily shots.  Having fallen off the recent highs set at $2.50, investors may be taking advantage of the current pullback as volume has notiecably increased over the past week.  On Monday, in fact, ANTB shares registered their second-highest trading day of the year and were not too far off from seeing the most shares traded in one day since the symbol began trading in mid-January.  Investors taking note of potential 'volume precedes price' action may anticipate an eventual move higher based on the recent volume and interest paid to this stock.

Over the long term, AntriaBio has the potential to enter a multi-billion dollar industry with a next-generation product that could drastically increase the quality of life for diabetic patients needing daily basal insulin shots as a sustained treatment option.  Aside from this week's 'Weekly Stock Watch' report linked above, below is our original write-up on AntriaBio. 

ANTB trades in a highly volatile sector, so there are key points to consider, as outlined below, but this is an emerging story to monitor these days.

Stay tuned...

AntriaBio Potentially Positioned For Both Long And Short Term Gains

 

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This week could be a pivotal one.  Record market highs are well within sight and investors will look for evidence that last week's bullish momentum can continue into the new trading week, even as the effects of sequestration set in.  Comments before Congress last week by Fed Chairman Ben Bernanke helped to reverse Monday's notable pullback and spark an overall move higher through the remainder of the week.  All the while our politicians in Washington failed - yet again - to reach a budget deal that would stave off a harsh round of budget cuts that will end up slashing tens of billions of dollars from the federal budget over the coming quarters. 

With the weekend under the belt and a few days for investors to digest the news and potential impacts of sequestration, we'll know fairly soon what the market makes of it all.  Significant cuts in defense spending, as we've noted before, led to a retraction in GDP numbers for the fourth calendar quarter of 2012, although those numbers were recently revised higher to demonstrate stagnant growth. 

The point was made, however, that the US economy is still hovering in a state that is heavily reliant on government spending - that's why at least some investors will consider the looming sequestration as dangerous for the short term, although many will also argue that drastic cuts are needed in federal spending for a healthy long term outlook.  Many would expect that those cuts would come responsibly, though, and not at the behest of another fiscal deadline imposed by the bureaucrats in DC who time and again prove the futility of their attempts to get the job done...

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