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Two Ways: Amex Up As Cardholders Pay Down


Strengthen your portfolio in good times and bad.

Shares of American Express (AXP) jumped today after data showed a stabilization in the ability of cardholders to pay their bills in March.

According to Bloomberg, the largest US credit card company by purchases said writeoffs on US loans deemed uncollectible rose to 8.8% in March after increasing to 8.6% in February and 8.1% in January. American Express was also able to sell previously written off cardmember loans to third parties. This helped offset some losses and improved the March charge-off rate.

The company did say it expects increased "past-due loans and writeoffs to increase through the second quarter of 2009." But despite the warning, shares closed up 11.88% to $20.62.

See Professor Mike Mish Shedlock's Goodbye to the Rally?

From the Bull Pen: Was Amex's gain today really a rush to value? The stock could have more room to run, but a better play might be in the agriculture sector, like Agrium (AGU). Watch the stock as it creeps out of a multi-month range. Those bullish can set a 2% sell stop.

From the Bear Cave: If the market's rally is coming to an end, bears can use the S&P 500 Depository Receipts (SPY) with a tight buy stop above $86.

Have a good night!

In memory of our fallen friend and trusted colleague, Bennet Sedacca, 100% of the donations made to the RP Foundation through April will be channeled to philanthropic endeavors consistent with the RP mission, working closely with the Sedacca clan in the distribution of those funds. We thank you kindly for your support as we strive to effect positive change in the lives of children.
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Position in SPY

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