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BALTIMORE ( Stockpickr) -- Well, he's already got the beard -- if Wall Street analysts are right, we may as well get Ben Bernanke a red suit too. That's because analysts are expecting Bernanke to announce that the Fed is shoving $45 billion a month in Mr. Market's stocking tomorrow.
That much treasury buying would push the Fed's balance sheet to $4 trillion...
For the last four years, the Fed has made a big statement about what they want to happen in the markets. By keeping interest rates low and fuelling inflation by printing cash, the Fed has opted to encourage an equity rally by punishing savers. But dumping cash into treasuries can have unintended effects -- in the past couple of years, that's meant that skittish investors have piled into treasuries too in spite of the toxic effects of negative real rates.
We've been in a return
of capital rather than a return
on capital environment, after all.
And while tomorrow's Fed action may well spark buying pressure in stocks, some stocks are going to benefit more than others. A lot more. That's why, today, we're taking a technical look at five names that could be toxic for your portfolio this winter.
To be fair, the companies I'm talking about today aren't exactly "junk."
I mean, they're not next up in line at bankruptcy court. But that's frankly irrelevant; from a technical analysis standpoint, they're some of the worst positioned names out there right now. For that reason, fundamental investors need to decide how long they're willing to take the pain if they want to hold onto these firms this Fall. And for investors looking to buy one of these positions, it makes sense to wait for more favorable technical conditions (and a lower share price) before piling in.
>>5 Stocks Insiders are Stashing
For the unfamiliar,
technical analysis is a way for investors to quantify qualitative factors, such as investor psychology, based on a stock's price action and trends. Once the domain of cloistered trading teams on Wall Street, technicals can help top traders make consistently profitable trades and can aid fundamental investors in better planning their stock execution.
So, without further ado, let's take a look at
five "toxic stocks" you should be unloading in December.