Investors 411 Blog

by Barr Jozwicki
September 30, 2009

Market Update – Jobs

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , ,

Note  - Last Update for the week.

Where are the New Jobs?

Dorothy Lange’s famous photo –  Migrant Mother from Wikipedia

Right now – job cuts are declining in the USA - down @700k in January to @200+k last month. Major reasons why -

  • China India and other emerging markets keep growing and stimulus packages around the world stimulate their growth. Therefore US global companies  don’t need to lay off more workers.
  • The US government stimulus package creates jobs and cuts taxes. In a year or two the Obama or US stimulus package will run it course.
  • The Fed has injected massive amounts of capital into the system propping up the shadow financial system and keeping it from failing-thus saving jobs.
  • The automotive sector has been bailed out preventing a total collapse of jobs in the sector.

What happens when the stimulus, and cash infusions run their course. Where will the new jobs come from?

Wall Street companies are playing cut throat with each other trying to get into Emerging Markets (China #1 on the list). Labor costs are cheaper there and they have growing GDP’s. (some of this is phony accounting, but overall they far outstrip the USA in growth) So Wall Street companies will as they have in the past hire lower cost and now better educated workers from abroad. Now there is even more incentive to hire abroad because of their growing markets. It’s even cheaper for US companies to hire European workers because they don’t have to worry about health care costs.

Bottom Line –  Jobs has historically been a lagging indicator after a recession because of globalization. It sure looks like job creation is going to be worse this time than after other recessions. What’s going to happen in the long term after all the stimulus, tax cuts, money printing etc. becomes no longer sustainable?

One major  Obama/Tom Friedman’s solution is to turn alternative energy into the next tech explosion (like the internet). But, the investment, so far is way too limited and others from Germany to China are already leading the charge in this area.

Your Comments

Check out “Doggies Mom” who has a LINK to an editorial on health care by Rose Ann DeMoro and Michael Moore .

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow -0.48% up
NASDQ -0.31% up
S&P500 -0.22% up
Russell2000 -0.45% -

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

  • Brown = repeat statements
  • Green = usually bullish statements
  • Red = Usually bearish statements

Technicals and Fundamentals

Volume rose a bit as stocks retreated. Volume was below average. No real confirmation or follow through of Monday’s rally.  Probably means all eyes are on the Jobless claims at the end of the week.

There is some clear change in overall feeling. The BDI has fallen for 4 months – although the rate of decline has slowed. This indicates China, who was buying all kinds of raw materials because they were cheap has stopped.  China was a major growth factor in leading us out of the recession. This also indicates that the US did not buy as many holiday items from abroad. Potential for a slow holiday season.

The up side fundamental is the stock market. Because it has had a phenomenal run from the lows investors may feel like spending some of those gains.

Bottom Line – Although we could move higher and Dow 10,000 is drawing investors like a magnet, there is reason for CAUTION. If we get a reasonable jobs number – under 200,000 lost jobs in September you may see a short rally.  Its starting to feel like traders will sell the rally.  Still holding on to the Long term CAUTIOUSLY BULLISH outlook

Big news for week is the jobs number for the month of Sept. coming out Friday.


——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI The Baltic Dry Index measures the flow of goods by price (world trade) .

2388 is support now resistance level/number to watch After a short two day rally of +29 points the BDI fell yesterday -7 and closed at 2185. These are very small moves, but in the right direction.

The BDI is almost 50% off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 ) A 50% retracement from highs is a major support level. Therefore some stabilization is understandable.

What this means World trade is in trouble – lots of ships are sitting in ports empty.  To some degree, China has stopped buying raw materials and/or the US consumer is not buying as rapidly as earlier in the year. Braking a support level is significant, but 2192 (current level) is still a long way from the Dec. 2008 663 low. = Storm clouds gathering

——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra Dollar up = US stocks down & Dollar down = US stocks up

The dollar rose +0.17% yesterday to $77.12 . Its chart shows it has clearly formed a short term higher high over the last two weeks. Higher dollar usually leads to lower stock prices.

Last year’s low was around $71, so there is a long way to go before the next major support level.

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

revised to reflect recent trades last weekend

Long Term Outlook = CAUTIOUSLY BULLISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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September 29, 2009

Market Update – Why are Stocks Rising.

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , , , , ,

Why Are Stocks Rising?

Derivatives

  • China – The Chinese stimulus package was directly aimed at infrastructure and was well over twice as large as ours (relative to GDP). China went on a buying spree of natural resources (they were cheap) and the BDI (see below) exploded higher over 600% in the first 1/2 of the year. China still has a large net surplus and can offer another similar stimulus package without going into debt. India and Brazil have helped, but China is the driver.
  • The USA - The USA was at the epicenter of the financial meltdown. We built phony wealth (phony GDP) by trading Credit Default Swaps and it all exploded when housing prices fell. The consumer, and our government was in significant debt before the financial/economic meltdown. The consumer and banks (especially the larger shadow banks/institutions) have benefited from our stimulus package, bailouts, and printing money by Fed and government.
  • Stocks  Moving Higher – The consumer is saving more and the government borrowing more. Robert Reich has a similar view LINK ( scroll down-thanks to one of you for referencing this) Problem here is we were already in significant government debt and had been running an unregulated financial market that created “Financial Weapons of Mass Destruction.” (Warren Buffett’s term for CDS’s) This unregulated capitalism is GROWING – up 14% from last year. LINK There has been almost no regulation or transparency imposed by government to solve the problem. In fact, we removed mark to market accounting, making less transparency.

So US financials (everyone who traded or still trades CDS’a from AIG to GE) have had (directly or indirectly* ) wheelbarrows of money thrown at them – their profits/stock prices have grown.  China and other emerging markets have maintained a positive GDP and helped move US markets higher. Its great that consumers are saving more. However, we do need consumers (70% of the GDP) to spend to get the US economy moving again.  US stocks can move higher on a falling dollar and selling more abroad.

Bottom LineIt’s the US economy or Main Street that is in deep trouble, not Wall Street.

* AIG was bailed out by US government. They in turned paid obligations to shadow banks & hedge funds, who paid GE Financial and/or big banks, who paid Fannie, Freddie, & smaller banks, who paid mortgage companies etc..  This order is not 100% accurate, but it shows how by paying money to AIG  others “indirectly” got money. Every TARP bailout recipient had its own domino chain of debtors.


STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow +1.28% down
NASDQ +1.90% down
S&P500 +1.78% down
Russell2000 +2.38% -

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

  • Brown = repeat statements
  • Green = usually bullish statements
  • Red = Usually bearish statements

Technicals and Fundamentals

Volume exploded lower and stocks exploded higher.  Volume is the #1, confirmation factor of a market rally and in no way did volume confirmed yesterday’s rally. The excuse given by talking heads was it was the a major Jewish holiday. Jews are less than 1% of the US population and they don’t control 50+% of US equities.

Long term – Even more significant is the fact that as this rally gets extended volume has declined. Check out the 4 key US stock indexes (listed above) longer term charts and what you will see is an overall drop in volume as the markets move higher. You’d think it might be due to seasonality – summers are usually slower, but after Labor Day volume historically rises. It has NOT this year.

This does not mean that markets will not move higher, at least temporarily, but it is reason for caution. When the #1 conformation factor of any price move decreases while prices flow in one direction (higher) you have to be skeptical.

A bubble is building. This is why you see me almost begging for a market correction of 5 to 10% sooner rather than later.  You combine this with the fact that the BDI (measurement of world trade) has fallen almost 50% since the summer began and this adds fuel to the fact a price bubble is building. If volume was building you could say new money was coming into the stock market. It’s NOT .

Big news for week is the jobs number fro the month of Sept. coming out Friday.

BDI seems to be temporarily turning higher = Bullish

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI The Baltic Dry Index measures the flow of goods by price (world trade) .

2388 is support now resistance level/number to watch two days ago the BDI reversed direction and  BDI was up +20 . Yesterday the BDI gained +9 closing at 2192 . These are very small moves, but in the right direction.

The BDI is almost 50% off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 ) A 50% retracement from highs is a major support level. Therefore some stabilization is understandable.

What this means World trade is in trouble – lots of ships are sitting in ports empty.  To some degree, China has stopped buying raw materials and/or the US consumer is not buying as rapidly as earlier in the year. Braking a support level is significant, but 2192 (current level) is still a long way from the Dec. 2008 663 low. = Storm clouds gathering

——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra Dollar up = US stocks down & Dollar down = US stocks up

The dollar rose +0.27% yesterday.  Somethings up that raises caution flags. Both the dollar was up and stocks exploded higher. Usually there has been an inverse relationship.

Last year’s low was around $71, so there is a long way to go before the next major support level.

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

revised to reflect recent trades last weekend

Long Term Outlook = CAUTIOUSLY BULLISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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September 28, 2009

Market Updates – Building and Blowing Bubbles

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , , , ,

Afghanistan Bubble Building

Islamic Republic of Afghanistan

جمهوری اسلامی افغانستان
(PersianJomhūrī-ye Eslāmī-ye Afġānistān)

د افغانستان اسلامي جمهوریت
(PashtoDa Afġānistān Islāmī Jomhoriyat)

So after adding 21,000 to the original 38,000 troops in Afghanistan the generals are calling for another 45,000 troops for Obama’s “necessary war.” This would be a unilateral increase of American troops. This unilateral increase would put over 100,000 troops in nation building Afghanistan for the next 5 to 10 years. Basically we will end up unilaterally increasing troops by almost 200%. How is any of this different than the unilateral Cheney/Bush military approach.

Have we learned nothing from the trillion(s) spent in Iraq. – A corrupt government, dominated by Shia’s who love Amadinejad & still have huge economic problems. Imagine Israel bombing a suspected Iranian nuclear plant. It not only would turn Iranian religious fanatics into terrorist bombers, but the Shia’s in Iraq would join them.

What happens next probably Pakistan, Yemen, the Sudan ? Frank Rich has a column on this “Obama on the Precipice” in the NYT LINK

China blowing by the USA

Tom Friedman had another column this weekend entitled “The New Sputnik” on China blowing by the USA in the creating of alternative energy. LINK

This is just another reason why the #1 investment choice of Investors411 continues to be FXI -The China ETF.

Blowing and Building Economic Bubbles

Both the WSJ and the major financial channel are cheerleading unregulated capitalism this AM. Why not, the Lehman Brothers collapse is a year behind us and taxpayers have bailout Wall Street. Happy days are here again and nothing substantive has been done to regulate or reform what got us into trouble in the first place. Economist Simon Johnson on “Was the G 20 Summit actually Dangerous” traces the lack of capital requirements for US financial institutions. LINK

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow -0,44 % down
NASDQ -0.79% down
S&P500 -0.61% down
Russell2000 -0.47% -

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

  • Brown = repeat statements
  • Green = usually bullish statements
  • Red = Usually bearish statements

Technicals and Fundamentals

Volume declined and was below average. Technically, it looks like the bears are running out of momentum. In the very short term we are a bit oversold – so look for an early rally.

Big news for week is the jobs number fro the month of Sept. coming out Friday.

BDI seems to be turning higher = Bullish

Fearless Forecast Took it on the chin last week as major US indexes fell. However September is turning out to be a pretty good month. The dollar is the over ridding factor in market direction. It would be good in the long run  if US markets stopped moving higher without some sort of more major retreat (5 to 10%) Constantly going higher feels too much like a bubble building.  Fearless forecast for the week is for the dollar to fall and markets to rise.

This rally is built on the falling dollar, means US goods (exports) will cost less abroad. Therefore for major US companies that sell overseas profits will grow.


——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI The Baltic Dry Index measures the flow of goods by price (world trade) .

2388 is support now resistance level/number to watch Yesterday BDI +20 t o close at 2183. Short term Bullish for stocks

The BDI is @49% off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 ) A 50% retracement from highs is a major support level. Therefore some stabilization is understandable.

What this means World trade is in trouble – lots of ships are sitting in ports empty.  To some degree, China has stopped buying raw materials and/or the US consumer is not buying as rapidly as earlier in the year. Braking a support level is significant, but 2183 (current level) is still a long way from the Dec. 2008 663 low. = Storm clouds gathering

——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra Dollar up = US stocks down & Dollar down = US stocks up

The dollar fell -0.17% yesterday and closed at $76.78. After a major two day rally that created a higher price high (bullish) the dollar cooled off a bit.

Last year’s low was around $71, so there is a long way to go before the next major support level.

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

revised to reflect recent trades this weekend

Plan to add to EWZ (Brazil)

Also MVIS (a stock) NOT an ETF is technically looking like its small three day retreat makes it a possible buy.

Long Term Outlook = CAUTIOUSLY BULLISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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September 26, 2009

Market Updates – Getting Your Mojo Back

Author: Barr Jozwicki - Categories: Market Update

Obama Got His Mojo Back


Barack Obama faces revolt over health care overhaul


Hopefully, you’ve seen all or part of Obama’s news conference  catching Iran red handed developing a secret potential WMD broadcast yesterday morning. LINK The follow-up news conference LINK

  • Obama “WAITED” till he had actionable intelligence to show potential development of WMD’s in Iran. Unlike the Cheney/Bush administration which day after day emotionally and ideologically fear mongered non exixtant WMD’s and terrorists in Iraq.
  • His timing was impeccable – The whole world was watching between the UN conference and the G 20 meeting. Ahmadinejad was unable to hide behind his state run media.
  • Presidents of our major allies France & Britain flanked Obama when he spoke.
  • Obviously, previous missile concessions to Russians were used to change their position. The Russians seemed to know nothing about the secret nuclear facility. They changed their position and called sanctions “inevitable.”
  • Obama didn’t splinter the world into “you’re either with us or against us.” Remember it was France & UN weapons inspectors who led the charge against us that Iraq had NO WMD’s
  • Obama has spent time repairing a bit the damage between the USA and the Arab world. Iran is Persian not Arab so this helps.
  • Obama was forceful rational, logical and together with allies outline a plan. I’m sure the far right will foam at the mouth and fear monger Iran. They’ve got to be apoplectic that we’ve got somewhere without torture, bombs or threats.

Can’t help thinking that if we hadn’t unjustly invaded Iraq. Iran, Iraq former arch enemy would have a far more pro western democratic government than they have now.

Obama’s Got His Mojo Back #2

Obama dominated the airwaves on the health care debate.  The focus changed to substance. It almost seemed like Americans wanted to listen to reasoned adults instead of the screaming mobs of tea bagger’s and their media allies. Polls have moved in his direction-except Afghanistan.

But the majority of us still don’t know what the hell his heath care plan is .

NYT/CBS poll 30% mostly support, 23% mostly oppose and 46% don’t know enough. LINK

Terrorism’s Mojo is Back

Bill Sparkman

Bill Sparkman/ Phot Huffington Post

Unfortunately,  Homegrown & Foreign Terrorism is back in the USA this week

  • US Census worker, Bill Sparkman , was found naked, bound, hanged with the word FED written with a felt tip marker on his chest. LINK
  • “An American resident” Najibullah Zazi was charged by FBI with an al Qaeda conspiracy to use bombs. LINK
  • A Jordanian 19 year old Hosam Samadi was charged by FBI with an attempting to blow up a Dallas building. LINK
  • Obama faces 30 death threats a day, a 400% increase over previous administration. LINK
  • “Today’s angry political climate could spark violence”Nancy Pelosi – Gets support from experts LINK

Kudos to the Secret Service and the FBI for the work they did/do.

Please note due to heavy work schedule there will be far fewer Investors411 over the next two weeks.

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September 25, 2009

Market Update – Caught Red Handed

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , , , ,

Iran Gets Caught Red Handed

Ahmadinejad

Perhaps this is one reason why the Russian President came out and said sanctions are inevitable.

Breaking news – Iran has been caught by US, Ger., Eng. and Fr. secretly trying to enrich Uranium . This news should dominate news cycle. Holocaust denying, illegitimate President Ahmadinejad (photo above) announced he got caught with his hand in the nuclear cookie jar. LINK

Obama’s Bill to triple non military aid to Pakistan passes Senate. LINK

These two news items are interconnected .

The US obviously has limited resources. We should NOT be trying to spend trillions (Nobel prize winner Joe Stigletz put this cost at $2 to $3 trillion) nation build in Iraq, Afghanistan, or other countries.  What we need to focus on is the nuclear problem especially in Iran and Pakistan.  If we can increase stability in Pakistan now (the $1.5 billion in aid is still too little)  we could prevent spending trillions there later.

Obama directly addressed cutting nuclear weapons at the UN Here’s al Jazeera’s interview of Jordan’s Queen Noor. Remember al Jazeera is basically a Sunni arab news outlet and Iran is Shia and Persian. No love lost between the two. LINK

Alternative Energy (+ and -)

Tom Friedman is back writing about alternative energy or lack of alternative energy manufacturers in the USA. Also there is  in the comment section of the blog an insightful reference to a Newsweek story “Big Oil Goes Green For RealLINK

Last week Friedman bemoaned the fact that the 14 new solar energy plants (one significant component of alternative energy) has all been built outside the USA. LINK

G 20

The G 20 countries are meeting in Pittsburgh and if corporate media let’s us get buy protests you can find some substance. The NT hits the nail on the head. The G 20 nations with a lot of stimulus packages and other measures have averted a worldwide economic meltdown. Now the tough part begins – Getting past self interests and coming up with some global regulatory solutions and avoiding protectionism LINK

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow -0,42 % down
NASDQ -1.12% down
S&P500 -0.95% flat
Russell2000 -1.89% -

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

  • Brown = repeat statements
  • Green = usually bullish statements
  • Red = Usually bearish statements

Technicals and Fundamentals

There hasn’t been big volume behind this current short term dip, but it has been moderate.  The NASDQ (tech’s have lead) the retreat and has had the biggest volume.  A second day of losses usually acts as confirmation of the first days turn, especially if volume rises.  So we get a kind of partial confirmation.

One of the internet darlings and AAPL competitor, RIMM got toasted in an early earnings report – down 10+% – Bearish news for techs

A Fed Governor Kevin Warsh has said that we may have to raise interest rates sooner than later.  Stocks love a 0% interest rates and rising interest rates means other ways of making $ become more viable than stocks. WaPo editorial LINK = Bearish Fundamental

Earnings season is around the corner.

G 20 summit taking place in Pittsburgh.

BDI seems to be turning higher = Bullish

Iran has a secret uranium enrichment program just announced by US government = Bearish news

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI The Baltic Dry Index measures the flow of goods by price (world trade) .

2388 is support level/number to watch Yesterday BDI fell -10 t o close at 2165. Major support level has been broken and the rate of fall is dramatically intensifying – From @ -70 to -10 Short term Bullish for stocks

The BDI is @49% off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 ) A 50% retracement from highs is a major support level. Therefore some stabilization is understandable.

What this means World trade is in trouble – lots of ships are sitting in ports empty.  To some degree, China has stopped buying raw materials and/or the US consumer is not buying as rapidly as earlier in the year. Braking a support level is significant, but 2250 (current level) is still a long way from the Dec. 2008 663 low. = Storm clouds gathering

——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

As predicted the $76 support level held.

Mantra Dollar up = US stocks down & Dollar down = US stocks up

The dollar rose a very significant + 0.76% yesterday and closed at $76.91. Technically this is a new short term high from a few days ago = Bullish for dollar and bearish for stocks

Last year’s low was around $71, so there is a long way to go before the next major support level.

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

Sold all of 10% stake in XLF (financials) at 15.01 for a 7+% profit.  Reasoning – if markets do have a 5 to 10% correction higher beta (those stocks that are most volatile) names will get hit.  There’s a lot of talk about a consumer protection agency passing congress with financials as its focus. LINK

I keep waiting for some sort of regulation to be voted on so the same kind of meltdown does not happen again and Democrats, who are in control, keep disappointing.

Again just like selling AAPL, not being greedy sometimes hurts.  As a trader I do play with ETF’s that do 3x financials both long and short (FAS &FAZ)

Plan to add to EWZ (Brazil) on a dip.

Long Term Outlook = CAUTIOUSLY BULLISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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September 24, 2009

Market Updates – Wins and Losses

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , , ,

Wins in Missile Removal

Location of  Poland (dark green)

About a week ago Obama decided not to deploy a radar & missile outposts in Poland and Czechoslovakia – supposedly for use against Iran-

  • Russia is now NOT deploying missiles near Poland. Unfortunately this is a big deal in foreign press, but not here. LINK from India
  • CNBC is reporting this AM that the Russians are “more willing” to accept sanctions against Iran.
  • Biggest countries benefiting from this is Israel, Saudi Arabia, & Gulf states who will see increased spending on mobile defensive missile ships that will be placed directly between them and Iran.

Losses in Afghanistan

Obama said Afghanistan was a “Necessary” war and surged another 21,000 troops right after his election. Total now 68,000 vs. @ 140,000 in Iraq. Now generals are asking for a whole lot more (40,000+)More Americans are dying thee now than in any year since the war started.

  • The recent elections were a fraud
  • Why do we need to nation build there?  The chief product there is opium not oil.
  • Did we not learn anything from Iraq? – Iraq is poorer now than when we invaded, now has the 3rd most corrupt government in the world, (LINK) was the first government to recognize Ahmadinejad’s victory, etc. (could write a page on other financial and human losses)

Bottom line – We need to keep terrorists from getting nuclear weapons in Pakistan.  The US needs to stop throwing money nation building in Iran, Afghanistan or any other similar country like the Sudan, Yemen, Libya etc. Ronald Reagan was right when he took troops out of Lebanon.

If you want to launch a missile and kill a bunch of al Quaeda who are a threat that’s OK, but Colonialism didn’t work in the last century and we should learn from history. Best Link for more info.

We could fix a whole lot of problems if we stopped spending trillions nation building and teating every problem as a military problem. Come on Obama – Remember “Change we can believe in? Those of us who voted for you do.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow -0,83 % up
NASDQ -0.69% up
S&P500 -1.01% up
Russell2000 -1.18% -

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

  • Brown = repeat statements
  • Green = usually bullish statements
  • Red = Usually bearish statements

Technicals and Fundamentals

Major US markets after rising over 1% after the Fed announcement gave it all back and then gave back more. Volume was up especially NASDQ) The other major indexes had average volume.  It sure looks like this is the beginning of the expected correction mentioned for the last two weeks.

The dollar, of course, moved higher. However it seemed to be US stocks leading the much larger currency market and not visa versa.

If you look at the charts of the major US indexes they are well extended over their 50 day moving averages. (More sophisticated traders look at something called Bollinger Bands) and at least a technical correction seems likely .  How this happens is everyone is expecting the dollar to fall further and consequently stocks to rise. Traders have to rush in to cover their positions or loose out on gains. So you have short term traders panic and a selling spree.

The troubling fundamental behind all this is the BDI (see yesterday’s post) The rate of fall is growing.

Earnings season is around the corner.

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI The Baltic Dry Index measures the flow of goods by price (world trade) .

2388 is support level/number to watch Yesterday BDI fell -71 t o close at 2175. Major support level has been broken and the rate of fall is still intensifying = Bearish for worldwide stocks.

The BDI is @49% off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

What this means World trade is in trouble – lots of ships are sitting in ports empty.  To some degree, China has stopped buying raw materials and/or the US consumer is not buying as rapidly as earlier in the year. Braking a support level is significant, but 2250 (current level) is still a long way from the Dec. 2008 663 low. = Storm clouds gathering

——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

As predicted the $76 support level held.

Mantra Dollar up = US stocks down & Dollar down = US stocks up

The dollar rose +0.32% yesterday and closed at $76.33 This is above its support level

Last year’s low was around $71, so there is a long way to go before the next major support level.

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

For traders (not long term investors) on individual stocks. I personally cashed in on a 8% gain in APPLE yesterday.  Will buy back in on dip. I often get burned with this – my major mistake was taking profits in Google at 150 and never got back in.  I do plan to buy more AAPL on a dip. Holding onto flu play NVS until flu epidemic breaks. Also considering buying MVIS (Microvision) or CIEN (more later on this stock) on any dip.

Shorter term traders may want to take some $ off the table in recommended ETF’s.

Note Investors 411 is covering a few stocks for traders.  This blog will remain focused on ETF’s for reasons previously discussed.

Long Term Outlook = CAUTIOUSLY BULLISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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September 23, 2009

Market Update – Will Ferrell

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , ,

Will Ferrell & Company Video

Doggie’s Mom has sent in a humorous Video that is all over the web – Its about protecting big insurance companies and well worth the 2 minutes - LINK

Also check out Bob S’s latest concepts and why not add yours to the comments section. The Video says it better than any editorial comment. So check it out and pass it on to all your friends.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow +0.52 % up
NASDQ +0.39% up
S&P500 +0.66% up
Russell2000 +0.71% -

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

  • Brown = repeat statements
  • Green = usually bullish statements
  • Red = Usually bearish statements

Technicals and Fundamentals

Markets moved higher in increased but below average volume.  The DOLLAR is still dictating which way stocks move. The Fed announcement this afternoon should impact the dollar/stocks. The Fed doing nothing-no change in outlook – will probably send the dollar down and stocks higher.

The falling BDI is reason for concern.  At some point its fall has to matter because trade is important. More trade between countries means more money flows and GDP’s grow.  The BDI turned positive before the markets moved higher this spring.  Therefore, it is a leading indicator.  Perhaps it will take another month or two, but you can’t keep seeing world trade fall and expect growth around the world.

Right now the Dollar is dominating, but global trade is critical for growth. The BDI was THE leading indicator that preceded equities moving higher, so it does deserve our attention.  Often, the USA is so insulated we only think about what’s happening here.

Fed decision on onterest rates today

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI The Baltic Dry Index measures the flow of goods by price (world trade) .

2388 is support level/number to watch Yesterday BDI fell-68 to close at 2250. Major support level has been broken and the rate of fall is intensifying = Bearish for worldwide stocks.

The BDI is @47% off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

What this means World trade is in trouble – lots of ships are sitting in ports empty.  To some degree, China has stopped buying raw materials and/or the US consumer is not buying as rapidly as earlier in the year. Braking a support level is significant, but 2250 (current level) is still a long way from the Dec. 2008 663 low. = Storm clouds gathering

——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

As predicted the $76 support level held.

Mantra Dollar up = US stocks down & Dollar down = US stocks up

The dollar fell a significant-0.92% - So stocks went up This wiped out several days of gains and the greenback is again sitting right above its $76.00 support level. If the dollar breaks through this support level the rally will continue. The huge drop certainly is favorable for dollar bears. Would think the support level will collapse today.

Last year’s low was around $71, so there is a long way to go before the next major support level.

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

All our ETF positions are doing well most are outperforming the benchmark S&P 500.  One position SPX (20+% of the portfolio) mirrors the S&P 500.  This is the default position that Investors411 is using instead of cash.

Since this is such a ragging bull market its hard to find big dips to buy. Over the last month or two smaller dips (2 to 5%) have been used to add to positions

Long Term Outlook = CAUTIOUSLY BULLISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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September 22, 2009

Market Updates – Ronald Reagan: The Great Socialist

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , , , , ,

Ronald Reagan:

The Great American Socialist


All of you made outstanding public comments on Friday’s blog from a must see video of the Tea Bagger’s to an excellent editorial by economist Ravi Batra“Ronald Reagan: The Great American Socialist. ” The far right is calling Obama a socialist because he wants to “redistribute the wealth” yet Ronald Reagan by this definition can be credited for a huge redistribution of wealth.

  • Reagan’s 1981 tax cut was massive especially for the wealthy and corporations. This ” large reductions in income tax rates in 1981 were followed by abnormally slow growth” Source Wikipedia
  • The rate fell from 70% to 28% 1980 to 1988 for wealthiest Americans. Check out changes starting in 1980 (when Reagan took office) Great chart of tax rate of wealthiest individuals and tax rates from 1903 to 2003 at TruthandPolitics.org LINK
  • Batra continues – “deficit soared from 2.5 percent of GDP to over 6 percent, alarming financial markets, sending interest rates sky high, and culminating in the worst recession since the 1930′s”
  • Reagan was in trouble so he “looted” YOUR savings in the Social Security system. To fix the massive losses YOUR Social Security trust fund (taxes you paid) were now used to pay for programs, stop inflation, fix the recession by paying down the deficit.
  • By 2007 this totaled “$3 trillion dollars ” (including 1+ trillion in interest we would have had) and is a major reason why Social Security is in such trouble. But the reality is the fund is empty and used now to reduce the deficit.
  • In fact “In 1986, Reagan slashed the top tax rate further. His redistributionist obsession led to a perversity in the law. The wealthiest faced a 28 percent tax rate, while those with lower incomes faced a 33 percent rate; in addition, the bottom rate climbed from 11 percent to 15 percent.”

So now we have Heath care/public option and are afraid to tax the wealthiest individuals to pay for it. Those that benefit from Reagan and Bush tax cuts and have accumulated millions in compounded tax savings to protect themselves from the lack of funds in Social Security or heath care problems.  Those millions/billions have been amasses since 1981.

45,000 Americans die each year because they do not have health care (700,000 go bankrupt each year because of lack of decent health care-figures quoted on Bill Mahr HBO show) That’s equal to the deaths of 15 world trade center attacks . All this happens in the only civilized country in the world that makes a profit off of breast cancer, heart attacks, leukemia, aids etc…

Heath care is one component of this wealth distribution. It would redistribute more funds to lower and middle class families.

Special NoteThe Investment philosophy of Investors411 continues to be invest in countries with a growing working class of people NOT a growing oligarchy of wealthy individuals. This is why the ETF chosen are focused on India, China, Brazil, South Korea and other area where money flows because middle classes and those aspiring to the middle class spend money.

————-

Mea Culpa – Many of you sent personal and public emails or talked with me about Friday’s editorial “Why You Should be Afraid for America” One of you stated this is not a headline you’d find in the NYT and suggested , this is a fearful  “tabloid headline”  He’s right. I am an emotional guy who spent part of his youth marching for civil right, against the Viet Nam war, and income equality from the deep south to the infamous 1968 Democratic convention in Chicago. The headline was designed to attract your attention and in my heart I’m fearful for America’s future. I’ll try to watch it but please allow for the occasional over the top headlines.

Thanks to Paul R who sent inthe Batra editorial and all those other who make the comments section perhaps the most exciting part of this blog.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow -0.42% down
NASDQ +0.24% down
S&P500 -0.34% down
Russell2000 -0.31% -

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

  • Brown = repeat statements
  • Green = usually bullish statements
  • Red = Usually bearish statements

Technicals and Fundamentals


Volume was way down and that’s just what bulls want to see on a mildly bearish day for the S&P 500 and the Dow. Considering how strong the dollar was it is surprising to see the markets fall so little. (see below) The NASDQ even gained ground.

The Dollar is still the key index to watch right now. The inverse correlation between the dollar and stocks dominates the US markets

Fed meets today and makes announcement tomorrow.

Fearless Forcast = Rally continues. this week.

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI The Baltic Dry Index measures the flow of goods by price (world trade) .

2388 is support level/number to watch Yesterday BDI fell -33 to close at 2357. This is not a big fall, but a major support level has been broken. = Bearish for worldwide stocks.

The BDI is 44% off its high (early June) Before that it gained almost over 630% from its all time low of 663 (April high of 4291 )

What this means World trade is in trouble – lots of ships are sitting in ports empty.  To some degree, China has stopped buying raw materials and/or the US consumer is not buying as rapidly as earlier in the year. Braking a support level is significant, but 2357 (current level) is still a long way from the Dec. 2008 663 low. = Storm clouds gathering

——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

As predicted the $76 support level held.

Mantra Dollar up = US stocks down & Dollar down = US stocks up

The dollar rose +0.40% yesterday and guess which way most major US markets went – D__N.  ) 0.40 is a relatively large move up for the dollar.

Note that if you look at the longer term chart of the dollar that it has NOT been above its 50 day moving average since April.  The dollar is in a short,medium and long term BEAR market . Would buy stocks if the dollar got close to 50 day MA.

The two day rally in the dollar has also impacted oil prices that fell -3.53% yesterday. Right now this looks like a technical correction.

Last year’s low was around $71, so there is a long way to go before the next major support level.

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

Individual stock – One of you last week has asked me about MVIS (Microvision) See chart This chip company has exploded and broke out of its trading pattern even though stocks have been down/flat the last few sessions.  Would buy this on any dip. There are a whole bunch of traders out there ready to do the same thing.

Our swine flue play NVS and tech play AAPL are out peforming US markets – but it looks like we are in for some minor correction as the dollar rises.

NB – I just offering these trades because you folks asked for something other than ETF’s – I do NOT know enough about the fundamentals and a zillion traders know more. Also,its far easier for major players to manipulate these stocks than ETF’s which are huge market baskets of stocks.

Long Term Outlook = CAUTIOUSLY BULLISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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September 18, 2009

Market Updates – Be Afraid for America

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , , , , , , ,

Why You Should be Afraid for America


A Tea Party rally protester holds a sign with President Obama depicted as a witch doctor.

A Tea Party rally  from CNN

Back decades ago  a civilized and almost polite battles of idea between intellectuals like Bill Buckley (right) and Noam Chomsky (left) was the media focus in debating an issue. Today that’s all changed and the we reward violent, outrageous, or polarizing behavior.

Perhaps the best example of the media rewarding bad behavior is the Music Awards when Kayne West stormed the stage, grabbed the mike from winner Taylor Swift and told the audience someone else deserved the award. Kayne was rewarded with a lot of attention including a feature guest spot at the opening of the new Jay Leno Show. Swift’s song was forgotten memory.

The exact same thing has happened in the health care debate.  Last year health care costs went up 3.5% while workers salaries dropped 1.5%, millions lost their jobs (health care benefits) and home prices fell.

Now hate mongers like Rush Limbaugh are screaming for segregation on buses, Glenn Beck calls President Obama a “racist,” and congressmen Joe Wilson screams Obama is a liar in front of an address to congress.  For this they are all rewarded-from cash to listeners their audience grows and of course the fuel the fires of hate and racism. They have no desire to seek a solution or debate only to sell hate. “Mad man” Glen Beck is rewarded and lands on the cover of Time magazine.

If the hate monger can increase your fear he/she knows your emotions will override reason or rational debate. More conservatives folks are especially vulnerable to this because they see the world more in terms of “you’re either with us or against us. Liberals get upset at what’s happening – they can’t believe people fall for this stuff and most importantly they Fail to Act.

One recent poll showed that 1/3 of the conservatives in NJ believed Obama could be the anti Christ LINK This group and those who spread the hatred is now in power in the Republican Party. No one in authority in the Party will stand up to them. This spiral of hatred is growing unless you stop being a Liberal or Moderate wimp and do something.


The best thing you can do is focus on the Health Care. Get out there and talk to how we can contain cost and get better coverage . You stick your head in the sand and those that want segregated buses or to carry guns to town hall meetings will win .
We’ve worked on health care since Harry Truman was President. Meanwhile, every other very  civilized democracy has passed a nationalized or competitive (public option) plan and voted to keep it.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow -0.08% down
NASDQ -0.30% down
S&P500 -0.31% down
Russell2000 -0.31% -

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

  • Brown = repeat statements
  • Green = usually bullish statements
  • Red = Usually bearish statements

Technicals and Fundamentals .

This rally is based on a falling Dollar (down 8 days in a row) Up a smidge yesterday The dollar is oversold and reaching a support level (not a really strong support level).  This combination of oversold and an upcoming support level should hold for at least a day or two. This is exactly what happened. and it looks like the fearless forecast for week will be correct again.

Volume was down and that’s just what bulls want to see on a mildly bearish day. However it was not a huge drop in volume.  The Dollar fell all the way to $76.01 – right too its $76.00 support level. Probably another flat to down day that will see rally into the close.

While the BDI is troubling, there still is a lot of bullish momentum out there.

This is what is called a “quadruple witching Friday” – 3rd Friday of the month. = Lots of options expire so potential for lots of volatility.

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI The Baltic Dry Index measures the flow of goods by price (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . The BDI has leveled off and started to rise over the last few weeks. BDI fell a minor -25 yesterday. They are small losses, but the index has fallen 6 days in a row . BDI trading at 2390 and has recently formed a resistance level at 2388. Would not trust any stock rally, especially in foreign exporting countries if the BDI breaks down significantly below this number.

2388 is number to watch We are getting mighty close to support levels . Another down day is reason for caution. Bears are growling as support levels seem to indicate a breakdown.

The BDI is 43% off its high (early June) Before that it gained almost +170% from early April to Jun e

——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

The dollar after falling 8 days in a row finally rebounded a little.  It rose  +0.12% yesterday. Dollar trading at $76.28 . . There is a support level around $76 (lows from Sept & Aug. of last year) As predict the $76 support level held.

Mantra Dollar up = US stocks down & Dollar down = US stocks up

Last year’s low was around $71, so there is a long way to go before the next major support level.

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

Long Term Outlook = CAUTIOUSLY BULLISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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September 17, 2009

Market Updates Crash/Bailouts/Future of Wall Street

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , ,

The Crash, Bailouts and Future of Wall Street

James B. Stewart has an excellent and frightening  editorial in the New Yorker (you have to subscribe) that starts by describing just how close the world came to total financial collapse. Bernanke, Paulson, & Geithner are heroes for preventing the fall over the abyss. Of course, they’re villains for helping to create this mess too.

Pulitzer Prize winner, Stewart goes well beyond this (If any of you can find a link to this editorial please share it) Here’s a valuable Q&A on his piece from the New Yorker LINK

Willing to bet – Less than 5% of American’s  have some understanding of what happened (the crash, the bailouts, and solutions) Everyone, running around like chickens with their head chopped off,  screaming, or just plain angry.  Instead of listing to the dogmatic screamers – get educated – take some time and learn what happened.

Your Comments

Dr. Gold has written a  guest editorial for Investors411 and has  just posted some valuable insight on the health care debate. Check out the comments section of the blog for her wisdom and all the other comments.

They’re Back

Financial Weapons of Mass Destruction (Warren Buffett’s term) Credit Default Swaps are becoming popular again just one year after the major economic meltdown that almost created financial Armageddon throughout the world. Bloomberg , a major financial radio, TV, web, and print outlet headlines the following “Credit Swaps Lose Crisis Stigma as Confidence Returns.” LINK

Obama Scraps Missile Shield

Front Page NYT. LINK

Finally. Remember the missile shield that was supposed to be built in eastern Europe (Poland) to protect them from a country over 1000 miles away – Iran.  Made no sense then and none now. In the event of war with Iran what you want to do is to keep them from destroying the Saudi oil fields. Perhaps this will bring about some detente with Russia.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow +1.12% up
NASDQ +1.45% up
S&P500 +1.53% up
Russell2000 +2.07% -

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

  • Brown = repeat statements
  • Green = usually bullish statements
  • Red = Usually bearish statements

Technicals and Fundamentals

Technically, A significant big volume rally = Bullish sign Some money is coming on off the sidelines.

CAUTION – This market is up 8 of the last 9 days. It’s overbought.  Look at any huge rally in big volume as  climax selling – and sell (take some positions off the table) into that rally. Sometimes a climax can be two days of intense buying.  It would be great for bulls to have a flat  or down day in decreased volume.  Don’t think this will happen because there are so many waiting to buy the dip.

This rally is based on a falling Dollar (down 8 days in a row) The dollar is oversold and reaching a support level (not a really strong support level).  This combination of oversold and an upcoming support level should hold for at least a day or two.

A dollar that slowly declines helps stocks – up to a point. At some point (perhaps close to last year’s low or huge declines above 0.50% for a few days) a cascading dollar becomes a problem because it shows a lack of confidence in the USA - our debt is too huge.

This is another free market stock bubble building – the questions become will it grow too large? & when will it burst? As long as there are

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI The Baltic Dry Index measures the flow of goods by price (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . The BDI has leveled off and started to rise over the last few weeks. BDI fell a minor -16 yesterday. They are small losses, but the index has fallen 5 days in a row. BDI trading at 2415 and has recently formed a resistance level at 2388. Would not trust any stock rally, especially in foreign exporting countries if the BDI breaks down significantly below this number.

2388 is number to watch We are getting mighty close to support levels . Another down day is reason for caution.

The BDI is 41% off its high (early June) Before that it gained almost +170% from early April to Jun e

——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

The dollar has fallen 8 days in a row.  It dropped  -0.37% yesterday. Dollar trading at $76.18 . The last two days have seen rallies in the dollar crushed. There is a support level around $76 (lows from Sept & Aug. of last year)

Mantra Dollar up = US stocks down & Dollar down = US stocks up

Last year’s low was around $71, so there is a long way to go before the next major support level.

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

Current positions listed as % of portfolio

  • EWZ (Brazil) 12%
  • FX I (China) 18%
  • XLF (financials) 10%
  • GLD (gold) 10%
  • EWZ (S. Korea) 5%
  • SPX (S&P 500) 20%

Other positions discussed – But  Investors411 does NOT recommend individual stocks. I personally own- bought a week a two ago.

  • NVS (Novartis)
  • AAPL (Apple)
  • FAS – (3X financials) – I’m in and out of this ETF

Other positions mentioned, but not bought – AIG, C, GS

Would be more focused in taking a little profit from investments especially the closer you are to being 100% invested. Remember this is NOT you’re old buy and hold market. – There are still financial WMD’s out there and rallies/collapses that used to take years now happen in days/weeks.

Long Term Outlook = CAUTIOUSLY BULLISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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