U.S. Home Prices Rise at Slowest Pace in 20 Months

Ken Blevins/Wilmington Star-News via AP WASHINGTON -- U.S. home prices in July increased at the slowest pace in 20 months, reflecting sluggish sales and a greater supply of houses for sale.

The Standard & Poor's/Case-Shiller 20-city home price index rose 6.7 percent in July from 12 months earlier. That's down from an 8.1 percent gain in June and the smallest increase since November 2012.

Sales of existing homes have been weak for most of this year. They picked up over the summer but then fell in August and are 5.3 percent lower than a year ago. The slowdown has occurred partly because investors are pulling back from the housing market. Meanwhile, many would-be buyers are unable to obtain a mortgage, particularly first-time buyers. Nineteen of the 20 cities in the index reported lower annual gains than in June. And a new broader index of nationwide home prices compiled by S&P rose just 5.6 percent.

3 Big Stocks With Big Volume to Trade for Big Breakouts

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

Must Read: Sell These 5 Toxic Stocks Before the Next Drop

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

With that in mind, let's take a look at several stocks rising on unusual volume recently.

Must Read: 5 Stocks Insiders Love Right Now

Under Armour

Under Armour (UA), together with its subsidiaries, develops, markets and distributes branded performance apparel, footwear, and accessories for men, women and youth primarily in North America, Europe, the Middle East, Africa, Asia and Latin America. This stock closed up 3.3% to $69.82 in Friday's trading session.

Friday's Volume: 4.50 million

Three-Month Average Volume: 2.43 million

Volume % Change: 79%

From a technical perspective, UA gapped up notably higher here back above its 50-day moving average of $68.49 with above-average volume. This trend to the upside on Friday also briefly pushed shares of UA into breakout territory, since the stock flirted with some near-term overhead resistance at $70.16. Market players should now look for a continuation trend higher in the short-term if UA manages to take out Friday's intraday high of $70.57 with strong volume.

Traders should now look for long-biased trades in UA as long as it's trending above its 50-day moving average of $68.49 and then once it sustains a move or close above $70.57 with volume that hits near or above 2.43 million shares. If that move gets underway soon, then UA will set up to re-test or possibly take out its 52-week high at $73.42. Any high-volume move above that level will then give UA a chance to make a run at $80.

Must Read: Must-See Charts: 5 Big Stocks to Sidestep the Selloff

Micron Technology

Micron Technology (MU), together with its subsidiaries, manufactures and markets semiconductor solutions worldwide. This stock closed up 6.7% at $33.83 in Friday's trading session.

Friday's Volume: 53.97 million

Three-Month Average Volume: 24.24 million

Volume % Change: 137%

From a technical perspective, MU gapped up sharply higher here with strong upside volume flows. This large spike to the upside on Friday also pushed shares of MU into breakout territory, since this stock took out some key near-term overhead resistance levels at $32.55 to $33.41 and at $33.70. Shares of MU are now quickly moving within range of triggering another big breakout trade. That trade will hit if MU manages to clear some more key overhead resistance levels at $34.28 to its 52-week high at $34.85 with high volume.

Traders should now look for long-biased trades in MU as long as it's trending above Friday's intraday low of $33.41 and then once it sustains a move or close above those breakout levels with volume that this near or above 24.24 million shares. If that breakout develops soon, then MU will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $38 to $40.

Must Read: How to Trade the Market's Most-Active Stocks

BlackBerry

BlackBerry (BBRY) provides wireless communications solutions worldwide. This stock closed up 4.6% at $10.26 in Friday's trading session.

Friday's Volume: 63.29 million

Three-Month Average Volume: 14.77 million

Volume % Change: 320%

From a technical perspective, BBRY ripped sharply higher here right above some near-term support at $9.50 and back above its 50-day moving average of $10.08 with monster upside volume flows. This sharp move to the upside on Friday is now quickly pushing shares of BBRY within range of triggering a big breakout trade. That trade will hit if BBRY manages to take out some near-term overhead resistance levels at $11 to $11.17 and then above its 52-week high at $11.65 with high volume.

Traders should now look for long-biased trades in BBRY as long as it's trending above Friday's intraday low of $9.66 and then once it sustains a move or close above those breakout levels with volume that hits near or above 14.77 million shares. If that breakout triggers soon, then BBRY will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $12.18 to $14.

Must Read: 10 Stocks Billionaire John Paulson Loves in 2014

To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>4 Stocks Under $10 Making Big Moves Higher

>>4 Big Tech Stocks on Traders' Radars

>>4 M&A Deal Stocks That Could Cut You a Paycheck This Fall

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

How Falling Crude Oil Prices Could Trigger an Unpredictable, Dangerous Mess

The dive in crude oil prices continued Monday as yet another sell-off targeted the energy sector for a particularly big hit.

Of course, this too shall pass.

The crude oil markets are oversold, and a rebalancing will bring prices back up a bit over the near term.

But the prospect of a protracted decline in oil prices is beginning to have broader policy implications in dangerous parts of the world, where rising prices have been the norm for most of the last decade.

I'm talking about what is going on in countries like Libya, where what's underway now could become the standard for wider regional instability.

As this situation develops, it could quickly get downright nasty...

Three Reasons Why Oil Prices Are Falling

As it stands, West Texas Intermediate (WTI), the New York benchmark crude rate for futures contracts, has fallen 14.2% since its most recent high on June 19. London Brent also hit its most recent high on the same date and has since fallen 15.8% through yesterday's peg.

There are three reasons behind this decline.

First, unconventional crude production in the United States, and unconventional and heavy oil extraction elsewhere in the world, has changed the supply-side dynamic. Of course, these expectations will be revised as production rates change. But in the short term at least, the availability of shale oil is putting downward pressure on oil prices.

Second, this is also the time of year - between the end of the summer driving season and the beginning of the transition into heating fuel for the winter months - when a decline in oil prices usually occurs. Only this year the decline has been more pronounced than usual.

Finally, and this is the truly unusual element, the presence of significant geopolitical tension is simply being discounted by oil traders. For instance, consider all of the uncertainties in the world today. A civil war and governmental paralysis has effectively taken all of Libya's exports off the table. Iraq is in utter turmoil. And Ukraine is gearing up for the next phase of its crisis, since it doesn't have enough energy in storage to meet the advancing winter.

Traditionally, a troika like this (combined with some smaller other events) would be enough to spike oil prices. In fact, that is exactly what happened in mid-June when all three of these crises seemed to collide.

But then something unexpected happened.

Oil prices quickly retreated.

Apparently, traders are not of the opinion, at least not yet, that the current geopolitical matrix is having a direct impact on the availability of oil. Adequate supply-side calculations, combined with some demand abatement, have only bolstered this approach.

Of course, going out further on the curve toward longer-term futures contracts does indicate some renewed concern about prices, and global demand is still climbing, increasing to the highest daily barrel figures we've ever seen. It is just not accelerating yet.

However, it could just be the lull before another tempest.

Nonetheless, end users are certainly welcoming the reprieve in prices. While the year-on-year difference in price is still higher, it is also tolerable by comparison. But the truth is these prices, while welcome, hardly classify as bargain basement pricing.

Even still, the longer we remain near the $90 level, the more likely it is that we will see a very standard response. Prices below anticipated levels will generate additional demand pressure.

Put simply, when energy is cheaper than expected, people use more of it.

As it stands, the current price of oil is well within the range analysts consider acceptable for continued economic development in price-taking markets (those dependent on others for their energy flow).

It is on the other side of the ledger where lower oil prices are beginning to cause major problems.

Where Lower Oil Prices Are a Recipe for Disaster

In price-making countries, those nations that are in the export business, the current pricing environment is creating a policy nightmare. It's not that the price of oil is too low. At $90 a barrel, all of these producers continue to make a nice profit.

That's because domestic production abroad is paid for in local currencies, while the exports are purchased with hard currencies, namely the U.S. dollar. That spread between the two allows for very cheap production costs and better proceeds on every sale.

Instead, the problem emerges in another way.

Rentier countries (those where the central budget is determined by foreign oil sales, not the development of land and economic diversification) are prisoners of the price oil commands on the world market. Since virtually everything else in these countries needs to be imported, declining oil prices add significant economic pressures.

By their nature, these rentier economies need to be able to design and administer multi-year spending programs based on projected oil revenues. Given their accelerating population growth, especially among the young for whom the unemployment rate is skyrocketing, and the inability to offset the energy sector with increasing revenue from other sources, planning in these economies becomes more difficult.

For the energy producers in the Middle East and North Africa, this is creating a mammoth crisis. One of the aftermaths from the "Arab Spring" has been an increase in government commitments to larger social and welfare programs, heavy internal subsidies on everything from gasoline to food, and an attempt to buy off rising dissent with governmental largess.

The important point is this: All of these promises require more than just the continued sale of oil.

They also require increased revenue from the sale of oil. In fact, several regional studies have already indicated that most Middle Eastern producers will require an average and sustainable crude price at least 25% higher than what is commanded today through 2020.

Thereafter, unless significant diversification takes place (and there are no tangible indications that will happen), the average price of oil needs to reach $130 to $135 a barrel before 2025. And absent pronounced and deepening geopolitical pressures, the alternative supplies globally available would make these prices problematic, although possible.

As a result, here is the quandary facing the producing countries in a restrained oil pricing environment. Planning needs to be done in at least five-year increments. But the funds necessary to pay for those programs are very uncertain.

That has all the earmarks of rising internal political unrest. Each year the population becomes more reliant on central authorities, not the market. And a government can only buy an artificial domestic peace if the money continues to flow.

This is ultimately unsustainable - even if oil prices are rising. But in the current environment, a protracted narrow pricing range could easily translate into a dangerous and unpredictable mess like the one going on in Libya right now.

And Libya is just the beginning of this mess.

Over the past few days, the crisis hitting in Algeria looks like it has become "the new normal," an inability to plan more than six months out because of uncertainty in oil prices and rising political demands from an increasingly frustrated population.

It's a nasty mix that will eventually explode.

More from Dr. Kent Moors: On the face of it, it sounds like a major miscalculation - the EPA's latest rules requiring that power plants reduce emissions are actually increasing the use of higher sulfur content coal. But this situation has improved the short- to medium-term prospects for a certain niche of coal stocks...

Why You Should Go For Western Digital

The capacity drive industry is a duopoly with Western Digital (WDC) and Seagate Technology (STX) leading the way. Both organizations were on an equivalent balance a year ago with a 43% offer of the hard-plate drive, or HDD market. In any case, Western Digital has hurried ahead with a 45% offer, while Seagate lingers behind with 40% of the business sector. Also focused around a couple of basic presumptions, I think this hole could enlarge further.

Contrast in execution

The PC business is decaying, so both Western Digital and Seagate are relied upon to see shortcoming in their businesses. In the past, both organizations were reporting marvelous development in their financials as the surges in Thailand limited supply. Be that as it may now, both capacity organizations reported a decrease in profit and income in their separate quarters.

Then again, it appears Western Digital is the particular case that's improving in a frail nature's domain. In its last reported second from last quarter, Western Digital's income was down only 1.6% year over year, while profit dropped 4%. In comparison, Seagate's income dropped 3.4% and profit fell 5%.

Contrast in essentials

A more critical take at the two monetary records likewise demonstrates Western Digital's prevalence. The organization has more money and lower obligation, with figures of $4.9 billion and $2.5 billion, individually. Thus, Western Digital's obligation is practically 50% of the measure of money. The story is the inverse for Seagate, which has obligation of $3.5 billion and money of $2.3 billion. Additionally, Western Digital's working money stream for the most recent year remains at $2.8 billion, better than Seagate's $2.4 billion.

Hence, Western Digital has a stronger accounting report and produces more money. Additionally, a lower measure of obligation implies that it need to endure lower investment costs. The organization right now yields 1.9% with a payout degree of 25%. Seagate has a higher profit yield of 3.3%, yet it has a higher payout proportion of 36%. Along these lines, Western Digital looks the more probable of the two to build the profit at a speedier rate since it is in a finer budgetary position.

Endeavor business

Western Digital is forcefully concentrating on tapping the undertaking business sector. Its venture class strong state drives, or SSDs, are seeing solid interest from clients. Along these lines, the organization is centered around growing its scope of big business SSD items - for example, SAS, Pcie, and SATA - with diverse structure variables and limits.

Western Digital's 6 TB-helium filled drive is constantly sent in volumes to a few unique gear makers over the globe. Then again, Seagate's 6 TB endeavor drive was presented in the last quarter. It's relied upon to addition force in the second a large portion of the year, when venture cloud clients embrace higher-thickness drives.

Nonetheless, Seagate has fallen behind Western Digital in this business, as the latter is seeing

Friday’s Analyst Moves: Nike Inc, Altria Group Inc, QUALCOMM, Inc, More (NKE, MO, QCOM, More)

Before Friday’s opening bell, a number of big name dividend stocks were the subject of analyst moves. Below, we highlight the important analyst commentary for investors.

Two Firms Bullish on Nike

Following Thursday’s after hours earnings release, Nike Inc (NKE) has been upgraded from “Neutral” to “Buy” at Janney Capital. The upgrade is primarily due to sales growth and strong cash flow. The firm has a $93 price target on NKE.

Sterne Agee boosted its price target on Nike to $95 as the company is seeing higher orders throughout the world.  NKE has a dividend yield of 1.20%.

Altria Upgraded at BofA/Merrill

Altria Group Inc (MO) has been upgraded from “Neutral” to “Buy” at BofA/Merrill. The firm has also boosted estimates on MO and has given the company a $50 price target (suggesting an 11% upside). MO has a dividend yield of 4.61%.

BMO Capital Lowers Estimates on QUALCOMM

BMO Capital has cut estimates on QUALCOMM, Inc. (QCOM) through 2015 as the company is seeing lower royalty sales. The firm has an $86 price target on QCOM, suggesting a 15% upside. QCOM has a dividend yield of 2.25%.

Jefferies Lowers Estimates on 3M

Jefferies has lowered its price target on 3M Co (MMM) to $164, suggesting a 15% upside. The firm has also cut estimates on the company due to reduced lower end market demand. MMM has a dividend yield of 2.40%.

Nomura Raises PT on Kohl’s

Nomura has raised its price target on Kohl’s Corporation (KSS) to $68, suggesting an 11% upside. The firm has also boosted estimates on the retailer following recent checks. KSS has a dividend yield of 2.54%.

Wunderlich Starts Harley-Davidson at “Hold”

Wunderlich has started coverage on Harley-Davidson Inc (

Which Dollar Store Are You Eyeing On?

Discount retailers and stockroom retailers have been benefitting from the market of late. This is for the most part due to a huge change in the preferences of people. The current financial condition is such that the person who gives most extreme profit to tempt customers wins. Henceforth, dollar stores, for example, Dollar General (DG) has been taking advantage of it. Dollar stores' regular low prices give the financial backing obliged customers a solid motivation to visit their stores.

Indeed stockroom retailers, for example, Costco Wholesale (COST) has been in vogue in view of their slight edge technique, which empowers clients to get progressively lower costs.

Then again, grocers, for example, Kroger (KR) and Safeway (SWY) are having an intense time, making arrangements for new techniques to drive traffic into stores. These players need to discover different approaches to offer their items. Their issues appear to be interminable when climbing data expenses were added to the powerless monetary conditions alongside losing piece of the pie.

The real picture

In the most recent one year, both Dollar General and Costco have had revenue growth more prominent than Kroger and Safeway. This is essentially due to higher store traffic driven by their low value offerings.

For instance, Costco has been pulling in parts due to its undeniable low costs and good customer service. Additionally, its yearly membership charge adds to its income. Concentration on online deals and international operations drove Costco's latest quarter revenue by 7%. Costco purchases directly from makers at a dealing value which is passed on to the clients, if merchandise are purchased in bulk. Its high volume and thin margins empower the stockroom retailer to take away customers' attention.

Likewise, Dollar General posted a great quarter owing to its items which are basically valued at $1. The organization has likewise figured out how to keep up its cost structure well by having smaller stores, unlike Safeway and Kroger which have bigger stores expanding the expense structure. These little stores additionally help clients in exploring it effortlessly.

Then again, Safeway posted a dull quarte

5 Short-Squeeze Stocks Set to Soar on Bullish Earnings

DELAFIELD, Wis. (Stockpickr) -- Short-sellers hate being caught short a stock that reports a blowout quarter. When this happens, we often see a tradable short squeeze develop as the bears rush to cover their positions to avoid big losses. Even the best short-sellers know that it's never a great idea to stay short once a bullish earnings report sparks a big short-covering rally.

Must Read: 5 Breakout Stocks Under $10 Set to Soar




This is why I scan the market for heavily shorted stocks that are about to report earnings. You only need to find a few of these stocks in a year to help enhance your portfolio returns -- the gains become so outsized in such a short time frame that your profits add up quickly.



That said, let's not forget that stocks are heavily shorted for a reason, so you have to use trading discipline and sound money management when playing earnings short-squeeze candidates. It's important that you don't go betting the farm on these plays and that you manage your risk accordingly. Sometimes the best play is to wait for the stock to break out following the report before you jump in to profit off a short squeeze. This way, you're letting the trend emerge after the market has digested all of the news.



Of course, sometimes the stock is going to be in such high demand that you risk missing a lot of the move by waiting. That's why it can be worth betting prior to the report -- but only if the stock is acting technically very bullish and you have a very strong conviction that it is going to rip higher. Just remember that even when you have that conviction and have done your due diligence, the stock can still get hammered if Wall Street doesn't like the numbers or guidance.



If you do decide to bet ahead of a quarter, then you might want to use options to limit your capital exposure. Heavily shorted stocks are usually the names that make the biggest post-earnings moves and have the most volatility. I personally prefer to wait until all the earnings-related news is out for a heavily shorted stock and then jump in and trade the prevailing trend.

With that in mind, here's a look at several stocks that could experience big short squeezes when they report earnings this week.

Must Read: 4 Stocks Spiking on Big Volume

KH Home

My first earnings short-squeeze play is homebuilding player KB Home (KBH), which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect KB Home to report revenue of $646.76 million on earnings of 40 cents per share.

The current short interest as a percentage of the float for KB Home is extremely high at 21.2%. That means that out of the 80.51 million shares in the tradable float, 17.13 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 2.7%, or by 454,000 shares. If the bears get caught pressing their bets into a bullish quarter, then shares of KBH could easily rip sharply higher post-earnings as the shorts jump to cover some of their trades.

From a technical perspective, KBH is currently trending just below both its 50-day and 200-day moving averages, which is bearish. This stock has been trending sideways over the last month and change, with shares moving between $16.06 on the downside and $17.94 on the upside. Any high-volume move above the upper-end of its recent range post-earnings could trigger a near-term breakout trade for shares of KBH.

If you're bullish on KBH, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $17.60 to $17.94 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 3.16 million shares. If that breakout starts post-earnings, then KBH will set up to re-test or possibly take out its next major overhead resistance levels at $18.47 to $18.96 a share, or even $19.38 to its 52-week high at $20.78 a share.

I would simply avoid KBH or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support levels at $16.66 to $16.06 a share with high volume. If we get that move, then KBH will set up to re-test or possibly take out its next major support level at its 52-week low of $15.40 a share.

Must Read: 5 Rocket Stocks Ready for Blastoff This Week

CarMax

Another potential earnings short-squeeze trade idea is used car retailer CarMax (KMX), which is set to release its numbers on Tuesday before the market open. Wall Street analysts, on average, expect CarMax to report revenue $3.57 billion on earnings of 67 cents per share.

The current short interest as a percentage of the float for CarMax is notable at 6.1%. That means that out of the 218 million shares in the tradable float, 13.48 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 2.2%, or by 289,000 shares. If the bears get caught pressing their bets into a strong quarter, then shares of KMX could easily jump sharply higher post-earnings as the shorts rush to cover some of their positions.

From a technical perspective, KMX is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending for the last month and change, with shares moving higher from its low of $46.64 to its recent high of $54.28 a share. During that uptrend, shares of KMX have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of KMX within range of triggering a big breakout trade post-earnings.

If you're in the bull camp on KMX, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $54.01 to its 52-week high of $54.28 a share with high volume. Look for volume on that move that registers near or above its three-month average volume of 1.52 million shares. If that breakout develops post-earnings, then KMX will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $60 to $65 a share, or even $70 a share.

I would simply avoid KMX or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 50-day moving average of $51.47 a share and then below more near-term support at $51 a share with high volume. If we get that move, then KMX will set up to re-test or possibly take out its next major support levels at $48.64 to its 200-day moving average of $48.02 a share. Any high-volume move below those level will then give KMX a chance to re-fill some of its previous gap-up-day zone from June that started just above $45 a share.

Must Read: 5 Stocks to Trade for Big Breakout Gains

Bed Bath & Beyond

Another potential earnings short-squeeze candidate is home furnishing retail chain store operator Bed Bath & Beyond (BBBY), which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect Bed Bath & Beyond to report revenue of $2.89 billion on earnings of $1.14 per share.

The current short interest as a percentage of the float for Bed Bath & Beyond is pretty high at 12.4%. That means that out of the 192.23 million shares in the tradable float, 23.90 million shares are sold short by the bears. If the bulls can get the earnings news they're looking for, then shares of BBBY could easily rip sharply higher post-earnings as the bears move fast to cover some of their short positions.

From a technical perspective, BBBY is currently trending above its 50-day moving average and just below its 200-day moving average, which is neutral trendwise. This stock has been uptrending strong for the last two month and change, with shares moving higher from its low of $54.96 to its recent high of $66 a share. During that uptrend, shares of BBBY have been consistently making higher lows and higher highs, which is bullish technical price action. That strong move has now pushed shares of BBBY within range of triggering a big breakout trade post-earnings.

If you're bullish on BBBY, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 200-day moving average of $65.47 a share and then above more near-term resistance at $66 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 3.26 million shares. If that breakout kicks off post-earnings, then BBBY will set up to re-test or possibly take out its next major overhead resistance levels at $70.98 to $72 a share. Any high-volume move above $72 will then give BBBY a chance to re-fill some of its previous gap-down-day zone from January that started just above $80 a share.

I would avoid BBBY or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support levels at $63.48 a share to its 50-day moving average of $63.18 a share with high volume. If we get that move, then BBBY will set up to re-test or possibly take out its next major support levels at $61.03 to $57.87 a share, or even its 52-week lowof $54.96 a share.

Must Read: 10 Stocks Billionaire John Paulson Loves in 2014

Paychex

Another earnings short-squeeze prospect is staffing and outsourcing services player Paychex (PAYX), which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect Paychex to report revenue of $662.62 million on earnings of 46 cents per share.

The current short interest as a percentage of the float for Paychex is notable at 5.4%. That means that out of the 324.52 million shares in the tradable float, 17.83 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 1.9%, or by 339,000 shares. If the bears get caught pressing their bets into a strong quarter, then shares of PAYX could easily trend sharply higher post-earnings as the shorts rush to cover some of their positions.

From a technical perspective, PAYX is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending over the last four months and change, with shares moving higher from its low of $39.09 to its recent high of $41.17 a share. During that uptrend, shares of PAYX have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of PAYX within range of triggering a big breakout trade post-earnings above some key overhead resistance levels.

If you're bullish on PAYX, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $43.17 to $44.76 a s share and then above its 52-week high at $45.95 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 1.83 million shares. If that breakout gets underway post-earnings, then PAYX will set up to enter new 52-week-high territory above $45.95, which is bullish technical price action. Some possible upside targets off that breakout are $50 to $55 a share, or even $60 a share.

I would simply avoid PAYX or look for short-biased trades if after earnings it fails to trigger that breakout and then takes out its 50-day moving average of $41.80 a share to its 200-day moving average of $41.44 a share with high volume. If we get that move, then PAYX will set up to re-test or possibly take out its next major support levels at $40.10 to its 52-week low of $39.21 a share.

Must Read: 4 Stocks Spiking on Big Volume

AAR

My final earnings short-squeeze play is diversified commercial aviation products and services provider AAR (AIR), which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect AAR Corp. to report revenue of $489.53 million on earnings of 38 cents per share.

The current short interest as a percentage of the float for AAR is notable at 6.8%. That means that out of the 36.45 million shares in the tradable float, 2.5 million shares are sold short by the bears. This is a decent short interest on a stock with a low tradable float. Any bullish earnings could easily spark a tradable short-covering rally for shares of AIR post-earnings as the bears rush to cover some of their positions.

From a technical perspective, AIR is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending over the last three months and change, with shares moving higher from its low of $23.68 to its recent high of $29.05 a share. During that uptrend, shares of AIR have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of AIR within range of triggering a big breakout trade post-earnings.

If you're in the bull camp on AIR, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance at $29.05 to $31.24 a share and then above its 52-week high at $31.55 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 217,333 shares. If that breakout materializes post-earnings, then AIR will set up to enter new 52-week-high territory above $31.55, which is bullish technical price action. Some possible upside targets off that breakout are $40 to $45 a share.

I would avoid AIR or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below both its 50-day at $27.38 and its 200-day at $27.14 a share with high volume. If we get that move, then AIR will set up to re-test or possibly take out its next major support levels at $25.47 to its 52-week low of $23.74 a share.

Must Read: Warren Buffett's Top 10 Dividend Stocks

To see more potential earnings short squeeze plays, check out the Earnings Short-Squeeze Plays portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>5 Dividend Stocks Ready to Pay You More

>>How to Trade the Market's Most-Active Stocks

>>Hedge Funds Love These 5 Tech Stocks -- but Should You?

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com.

You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

Mortgage Rates Surge, Hit Highest Level Since May

Getty Images WASHINGTON -- Average long-term U.S. mortgage rates surged this week, marking their largest one-week gain this year. Mortgage company Freddie Mac says the nationwide average for a 30-year loan jumped to 4.23 percent from 4.12 percent last week. The average for a 15-year mortgage, a popular choice for people who are refinancing, rose to 3.37 percent from 3.26 percent. At 4.23 percent, the rate on a 30-year mortgage is at its highest level since the week ended May 1, though it is still at a historically low level. Mortgage rates often follow the yield on the 10-year Treasury note. The 10-year note traded at 2.62 percent Wednesday, up sharply from 2.54 percent a week earlier. It was trading at 2.63 percent Thursday morning. Bond yields rise when bond prices fall.

Deere: Ag-pocalypse Now?

In a report call “AGpocalypse Now?,” Morgan Stanley’s Nicole DeBlase and team worry that Deere (DE) could be setting up for a repeat of 1998-1999. They explain:

Bloomberg News

Excluding the financial crisis-driven 2008-09 trough, the last Ag equipment downturn took place in 1998-99 – and examining industry fundamentals during this time reveals many parallels with the current setup. Commodity prices benefited from drought in 1996, but then yields were far better than expected during 1997-98, causing the corn price to fall below $2/bu. As such, the USDA projected a 5% Y/Y decline in farm cash receipts in 1998, followed by two subsequent years of LSD declines – the exact setup outlined by the agency for the 2014-16e period…

Applying Deere's FY99 guidance yields a 16% Y/Y Agriculture & Turf revenue decline in FY15e…At the margin line, after accounting for structural improvement ($100m restructuring, SVA) and mix, we credit Deere with 330bps of peak-to-peak margin expansion. Similarly, if we apply 50% decrementals to an implied 30% Y/Y decline in HHP sales, we see trough A&T margins of 6.0%, well below 12.1% [Morgan Stanley estimate]. This would drive bear case EPS of $5.00. We apply a 15-16x trough multiple, for a $75-80 bear case valuation. This leaves 11% remaining downside vs. the current share price, and so we remain comfortable with our UW rating.

Shares of Deere have dropped 1% to $86.30 at 3:54 p.m. today, and are down 5.5% so far this year.

Pioneer Natural Resources Earnings: 1 Number Investors Can’t Afford to Miss

Photo credit: Flickr user Paul Lowry. 

When Pioneer Natural Resources (NYSE: PXD  ) reported its second quarter results on August 4, investors initially sold off the stock. That's surprising in more ways than one. The company reported adjusted second quarter earnings of $195 million, or $1.35 per share, which actually beat analysts' estimates of $1.28 per share. Further, the company narrowed its 2014 production growth guidance range from 14%-19% to 16%-19%.

The only notable miss was on the revenue side, where the company fell about $10 million short of what analysts expected to see this quarter. The revenue miss, however, is pretty meaningless for an oil and gas company. So, if anything, investors simply sold off what is viewed by analysts as a richly valued stock as market troubles on the day the company released earnings exacerbated any existing negativity on the revenue miss -- sending Pioneer Natural Resources stock down by more than 5%.

However, beyond the headline numbers there was one important number buried within Pioneer Natural Resources' earnings report that investors cannot afford to miss. With each passing quarter the company becomes stronger in its belief that it is sitting on 10 billion barrels of recoverable oil and gas in its position in the Permian Basin. That is a huge step up from the 845 million barrels of oil equivalent, or BOE, of proved oil and gas reserves the company held at the end of last year. The company is basing its recoverable resource number on the estimated ultimate recovery, or EUR, it has been seeing from the horizontal wells it is drilling in the Permian Basin.

What is EUR and why does it matter?
The estimated ultimate recovery, or EUR, of an oil and gas well is the amount of oil and gas an energy company like Pioneer Natural Resources expects to extract over the lifetime of a well. It's a critical number in determining the return a company will earn when it drills a well. Because of this, the higher the EUR, the better the well.

In Pioneer Natural Resources' case, the company reported that its EURs in the Permian Basin continue to average 1 million BOE in the Wolfcamp B zone. That's a lot of oil and gas. In fact, it is well above what companies in the Bakken Shale and Eagle Ford Shale are seeing these days. For example, the average EUR of Continental Resources' (NYSE: CLR  ) oil wells in the Bakken Shale is just 603,000 BOE. Meanwhile, Devon Energy's (NYSE: DVN  ) top wells targeting the Eagle Ford shale in DeWitt County and Lavaca Texas see EURs of 850,000-950,000 BOE and 400,000-500,000 BOE, respectively.

Pioneer Natural Resources' position in the Permian Basin, however, consists of more than just the Wolfcamp B zone. The company is also experiencing strong well results from the Wolfcamp A and D zones, as well as the Lower Spraberry Shale. As the following slide notes, the EURs from these zones are ranging from as low as 650,000 BOE to well over 1 million BOE.

Source: Pioneer Natural Resources Investor Presentation (link opens a PDF)

In addition to that, Pioneer Natural Resources is also appraising results from the Middle Spraberry Shale and Jo Mill intervals. While the results of both intervals have been mixed, the company is seeing its best wells produce really strong EURs. In the Jo Mill the two best wells look to produce an EUR of 800,000 BOE, while the best Middle Spraberry Shale well looks like it's on pace to produce 700,000 BOE, as noted in the following side.

Source: Pioneer Natural Resources

Because of these high EURs, as well as the fact that several layers of energy-rich shale plays are stacked on top of each other, many companies are suggesting that the Permian Basin could become the best shale play in the country.

Lots and lots of growth ahead for investors
Because of continued strong well results Pioneer Natural Resources remains on pace to more than double its 2013 production by 2018. Further, the company believes that its current position in the Permian Basin offers more than a decade's worth of growth as it works to unlock the more than 10 billion barrels of oil and gas underneath its vast acreage position. The company's second quarter earnings release highlighted the fact that the EURs from Pioneer Natural Resources' wells continue to be on pace to produce lots and lots of oil. Needless to say, because of this, the long-term growth story remains very well intact. 

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Who the heck is Jack Ma? Meet the man who built Alibaba

  Who is Jack Ma? HONG KONG (CNNMoney) Alibaba founder Jack Ma was never supposed to be a billionaire.

Harvard snubbed him. He flunked college entrance exams twice. Investors thought the serial entrepreneur was crazy when he started building an e-commerce site in China.

But Ma proved them all wrong. Alibaba, which he launched in 1999 from his tiny Hangzhou apartment, is set for one of the largest IPOs in U.S. history.

Analysts estimate that Alibaba -- which does most things digital -- could be valued at $200 billion, roughly four times the market cap of Lockheed Martin (LMT).

How did an English teacher with a modest translation business become a tech titan? It began with a drink.

Searching for "beer" and "China" during his first use of the Internet in 1995, Ma found nothing. But there was plenty of information about American beer. And German beer.

Sensing an opportunity, Ma built a Chinese-language webpage. Within hours of launch, he was receiving enquiries from around the world. The Internet, Ma thought, is "going to change the world and change China."

A few years later, in 1999, Ma gathered 17 friends and acquaintances at his home. They worked feverishly on a new venture: a website to connect exporters with foreign buyers.

Alibaba.com was born. The firm quickly outgrew Ma's apartment, eventually becoming the dominant tech company in China.

The comedian is our CEO

Ma, 49, has always been proud of his humble roots. When Alibaba launched, Ma had no money, no tech experience and a haphazard management style.

But he did have plenty of charisma. Former executives say Ma's infectious optimism -- and his talent with languages -- helped sell the dream.

"He's funny! He can do standup in Chinese or English," said Duncan Clark, a former Alibaba consultant. "He can adapt to the audience ... he has the ability to make everybody in the room feel as if he's talking to just one person."

Ma, married with two kids, is also known to rely on gut instinct.

"He cares more about what is in someone's heart than what is on their resume," said Porter Erisman, a former executive who made a documentary about the company. "Look at the senior managers -- at Alibaba, a lot of them had no! prior business experience."

Employees are "Ali people," and managers are given nicknames taken from popular Chinese martial arts novels. Ma, a tai chi devotee, sometimes draws inspiration for company strategy from those books.

The Yangtze River crocodile

Ma is also a ferocious competitor, and steadfast in his belief that Chinese firms can take on international rivals.

"Chinese brains are just as good ... this is the reason we dare to compete with Americans," Ma told his fellow co-founders in 1999. "We can beat government agencies and big famous companies, because of our innovative spirit."

It was this conviction that led Ma to challenge eBay in 2003 when the Silicon Valley firm was expanding its China operation.

Spoiling for a fight, Ma sent a team back to his apartment to devise the next big thing. "EBay is a shark in the ocean; we are a crocodile in the Yangtze River," he said. "If we fight in the ocean, we will lose, but if we fight in the river, we will win."

The team came back with a product called Taobao, or "searching for treasure," in Chinese. The platform was similar to eBay, but better suited to the local market.

Yahoo (YHOO, Tech30) invested $1 billion in the venture. Within a few years, Taobao squeezed eBay out of China. The marketplace handled $177 billion in sales in 2013.

"Ali People" flock to Alifest

Alibaba is a global company with 22,000 employees and 90 offices. Its popular sites, Taobao and Tmall.com, account for 80% of China's online retail sales, and receive more than 100 million visitors a day.

The group and its affiliates operate an e-payment business, online investment funds, cloud computing and mobile services. Remembering how difficult it was to get financing for his translation business, Ma started a loan service to help entrepreneurs.

Alibaba is also getting into entertainment and sports, acquiring media companies and a soccer team in a pre-IPO buying spree. Critics s! ay this i! s irresponsible -- a last hurrah before Ma is beholden to shareholders.

Ma stepped down as CEO in 2013, and now pursues philanthropic endeavors. But he remains chief strategist at Alibaba, and the public face of the company. He is, by all accounts, still very involved in management decisions.

Once a year, employees and customers turn their attention to Alifest -- a conference that at times resembles a rock concert. The blowout event has featured guests including Bill Clinton and Kobe Bryant.

"Alifest convinced me to join Alibaba," said former executive David Wei. "I've never seen so many happy customers, so many happy employees."

Ma performs at these gatherings, donning sparkly costumes and belting out popular tunes. The crowd always goes wild.

"I never thought I would be where I am today," Ma said in a speech last year. "I never thought Alibaba would be where it is today."

The Only Way to Fix the Broken U.S. Free Market Economy

There's a reason America is floundering economically. There's a reason for the ever-widening divide between the "haves" and the "have-nots" in the United States.

Our country is no longer a free market, capitalist republic.

America has devolved into a socialist plutocracy as a result of the "financialization" of the economy.

Wealthy financial alchemists with the backing of paid-for White House administrations and Congressional lap-dogs engineer and manage the U.S. economy.

They also manage the public's access to money and credit for their speculative benefit when they win, and to taxpayers' detriment when they lose.

There's only one way out of this downward spiral...

What Went Wrong with American Free Markets

The truth about who runs the country, for whose benefit, and how they do it, has to be told.

Then what to do to get us back on our constitutional, republican path will be obvious...

The history of how America morphed into a socialist plutocracy where financialization of the economy has completely undermined free-market capital allocation is straightforward enough. 

Although the seeds were sown long before 1971, the official beginning of the financialization of the American economy began when President Richard Nixon announced on August 15, 1971 he was taking the United States off the gold standard.

The American dollar was redeemable in gold at $35 an ounce until Nixon took us off that fiscal tether. The currency, to which most others were pegged, would forevermore be allowed to "float" against other currencies.

To get Shah's critical briefing on how to protect your assets against this "financialization" morass – plus his weekly updates – click here.

Floating exchange rates means the value of one currency in terms of another currency isn't fixed, it changes depending on what the "market" determines the exchange rate should be.

The principal determinant in the valuation of one currency against another currency is the interest rate differential between the countries.

A country with a higher rate of interest (the 10-year U.S. Treasury rate is 2.40%) would likely have a more valuable, more expensive currency relative to a country with lower interest rates (Germany's 10-year bund pays less than 1%) because investors would sell their euros to buy dollars in order to park their money in higher yielding U.S. government bonds, which they have to pay for with dollars.

For importers and exporters of all stripes, exchange rates matter a lot. When exchange rates were "pegged" they didn't move much at all. When they began to float, changing currency values upended international trade.

Huge sums of currencies are swapped every day by importers and exporters who transact business in different currencies around the world. Constantly changing foreign currencies exposed businesses to huge profit and loss swings that had to be hedged to whatever extent possible.

But, as you now know, interest rates play the largest part in foreign exchange valuations. So, not only did currency hedging explode due to international trade factors, speculating on interest rate movements within countries and between countries emerged as the new biggest game.

Financial product innovation exploded as hedgers and speculators sought instruments to manage and profit from currency and interest rate movements. The Great Financialization game was on.

The biggest problem with untethering the U.S. dollar from a gold standard was that fiscal discipline disappeared.

If the dollar wasn't redeemable in gold, its value didn't matter on any relative basis, other than how it floated against other currencies. That left the Federal Reserve free to print as much money as it wanted to, and Congress with the ability to spend money it wouldn't have to raise by taxing the citizenry because the Fed could just print the money it wanted to spend.

Of course that wasn't supposed to happen. The prevailing economic theory of the day was "monetarism" as espoused by renowned economist Milton Friedman. According to Friedman's monetary theory, the Fed could grow the economy conservatively and robustly at 3% per year by simply increasing the money supply by that same amount every year.

It didn't work out that way because there was no control over the Fed. In theory they would manage the money supply, but in reality they answer to the bankers that control the Fed and to Congress which uses the Fed to pay for spending programs they lavish on voters to keep getting themselves re-elected.

The most disgusting and egregious manifestation of Congress' abdication of their fiscal and public duties occurred in 1977 when Congress amended The Federal Reserve Act, stating the monetary policy objectives of the Federal Reserve as:

"The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long-run growth of the monetary and credit aggregates commensurate with the economy's long-run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."

The so-called "dual mandate" gave the Fed the infinite, untethered ability to flood the economy with money to promote "maximum employment." In truth, Congress needed them to print money for their spending under the guise of lowering interest rates to spur economic growth and create jobs.

With all the capital they needed being supplied by the Fed, banks, so-called investment banks and trading juggernauts were awash in profit possibilities.

Financial products, including derivatives and other weapons of mass financial destruction, were devised as speculative vehicles for banks and trading houses to leverage themselves up in pursuit of paper profits on mathematical anomalies.

Since the beginning of the Great Financialization, the Fed has consistently flooded the banking system with capital and liquidity whenever it became over leveraged and favored institutions verged on insolvency.

Here's How to Fix the Problem

The Fed's backstopping of speculators' and bankers' failed schemes, originally named the "Greenspan Put," then the Bernanke Put, now the Yellen Put, virtually eliminated "moral hazard" and keeps the speculators bankrolled in an endless array of "carry trades."

With the majority of America's capital being allocated to financial speculation on account of its unprecedented return possibilities, it's easy to understand why there's not enough economic growth happening.

There isn't a free market allocating capital to productive endeavors, the kinds of endeavors that create long-term employment and careers.

The financialization of America is why the economy isn't growing and why the rich are getting richer.

If we want free market capitalism again, the first thing that has to be done is eliminate the Fed's dual mandate. Immediately. Next, we'll have to eliminate the Federal Reserve altogether. 

There are other ways to control the money supply and manage price stability. The "Taylor Rule," which puts stipulations on when interest rates can be manipulated, is one way.

And last but certainly not least, fiscal discipline has to return to Congress.

The way to do that is to make sure no one currently in Congress returns to Congress.

Editor's Note: This is a developing situation. It's very important for you to understand what's happening. You can get Shah's critical briefing on how this currency situation is affecting our economy - plus get his weekly updates - by clicking here.