Value Line Low Total Return Screen (8/16/2013)

Companies of Interest

Materially Stronger: Google (GOOG), Symantec (SYMC), Pandora (P), Fiserv (FISV)

Materially Weaker: United Online (UNTD), Microsoft (MSFT)1, Paychex (PAYX)2, Principal Financial Group (PFG)

1 – smaller reduction in expectations from $45 to $40 on the long-term forecast.
2 – smaller reduction in expectations from $50 to $45 on the long-term forecast.

Market Barometers

The median Value Line low total return forecast (VLLTR) is now 4.3%, down from 4.4% last week.

You could sub-title this one, ROC and Roll. Yes, stock prices are widely overbought (RSI>70) but the challenge is that they can stay this way for a very, very long time.

Yes, we think it’s prudent to selectively sell and trim lower-quality stocks from portfolios as conditions merit — but so long as the momentum persists, this still doesn’t feel like a run for the hills moment. I might trim carefully, but I’d not significantly raise cash until the rate of change (ROC) approaches and crosses over zero.

If that ROC crossover combines with a sub-zero swoon for the $USHL indicator (with return forecasts still at historical lows), I’d go into “capital preservation mode” on all personal accounts.

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