Investors 411 Blog

by Barr Jozwicki
October 30, 2009

Market Updates – Jobs & GDP

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

GDP = + 3.5%

Obama

This better than expected number is obviously a positive . Its due to the Obama & Bernanke stimulus – Cash for clunkers, tax cuts, first time home buyers credit, low interest rates etc.

It’s the first positive growth in over a year . Since only 40% of the Obama stimulus has been allocated and interest rates should remain low -  the next few quarters should also be positive.

The question becomes when you take the stimulus away what will happen?

Globally the canary in the coal mine is Israel, Norway and Australia. We are a globalized world and these 3 countries have already started to raise interest rates. If their economies continue to grow with raised rates others will follow.

The US does have a specific unemployment problem that will anchor it down longer than other countries. (see below). However, we’re getting some real growth abroad, especially emerging markets. Hopefully, this growth will be strong enough to drag the US along with it.

Jobs, Jobs, Jobs

So far the recovery act has saved or created enough jobs to “shave @2% ” off the unemployment figures. You can get a breakdown state by state at Recovery.com LINK

You can debate their figures, but a jobs recovery is going to be harder than most predict because

  • The financial shadow bank crisis created a much bigger hole than most people realize
  • Globalization will send most new jobs abroad.
  • Education of American workers/students has not kept pace with technology.
  • Our huge deficit will limit stimulus needed to create jobs.
  • Our manufacturing base has been seriously diminished.


STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow +2.05% down
NASDQ +1.84% down
S&P500 +2.25% down
Russell2000 +2.45%
-

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, Fundamentals & Analysis


The Lon Term Long Term Outlook is back to CAUTIOUSLY BULLISH As mentioned yesterday – When the Long Term Outlook is changed we often go back and forth for a while as stocks move above or below key support levels

The discouraging part of yesterday’s rally is THE LACK OF VOLUME . Once again upside moves have little volume and downside moves greater volume. Volume has historically been the #1 confirmation factor of market direction. So this is a very bearish sign

However – The Dollar Rules. Yesterday the dollar moved above the previous days high and closed lower than its low (See chart below). Technical analysts get very excited about a reversal that “engulfs” the previous days move. It fell  over 0.50% which is a significant drop. Investors411  predicted this because it was approaching its  strong resistance level – its 50 day moving average.  As long as the dollar remains below this resistance level - Bearish for the Dollar & Bullish for stocks.

Monitors Question/statement (see comments section of blog)  Sorry I’m not being clear. Yes, I did recommend adding (nibbling) to Brazil and China yesterday (I did) & yes I did lower long term outlook. These ETF’s (FXI & EWZ) had dipped more than 5% & were “buy the dip opportunities.”

NEUTRAL -  Even though it is a downgrade it is still an overall environment that some ETF’s should do well. When  CAUTIOUSLY BEARISH becomes the Outlook t hat its time to sell. Secondly, as mentioned we are on the cusp of change. Lastly, This market is very difficult to call because the old rules about volume have been cast aside and the dollar now rules.

The Dow is outperforming other major US indexes – This is probably due to the fact that these 30 giant stocks benefit most from the falling dollar (relative to other US companies most of more of their profits come from abroad)

Bottom Line – There are no universal rules in market analysis. Right now the Dollar is trumping volume and all other factors in predicting the direction of stocks and this is quite unusual.

——–

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) .

The BDI is @ 30% 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 )

The BDI rose a modest +27 points yesterday and closed at 3013. Exactly what it lost yesterday. A higher high price on its chart pattern has been confirmed The BDI has rallied almost 900 points since late September. =  Bullish for stocks & world trade right now

——-

The Dollar is currently the #1 forecasting tool . It would be a wild guess to predict he daily moves of the dollar, but longer term fundamentals are clearly negative – the trend of a falling dollar should continue.

$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

US dollar fell a SIGNIFICANT -0.67% yesterday. The dollar closed at $75.96 .  This is almost exactly on its support/resistance level of $76.00

From yesterday – The next important resistance level for the dollar is the falling 50 day moving average (blue line on chart). This is at 76.78 this AM. It’s the line in the sand – Best read of the tea leaves is that it will hold. In fact, Investors411 will add to some positions  as we get close to this resistance level.

Past statements -Last year’s low was around $71,(March 08 ) so there is a long way to go before the major and very crucial support level is reached . The dollar does have a support level around $74.00( a high from about a year ago – see long term chart)


Positions

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

Outside the USA in Emerging Markets (especially China, & Brazil) are much better in the long run - Our problem is one of timing. We can’t get a 5 to 10% dip to invest. Looks like we will get at least our 5 to 10% dip now.  Investors 411 should have much larger positions in emerging markets .

Current positions

EWZ (Brazil) – Bought at 69.5 (4% of portfolio)  Now = 20% of portfolio

FXI (China) – Bought at 42.75 (4% of portfolio) Now = 24% of portfolio

GDL = 11% of portfolio

SPX = 20% of portfolio

For traders also have positions in NVS & CSCO

  • Going to sell some SPX -reasons – Free cash for other investments & take profits
  • Need more diversity in emerging markets than just China and Brazil

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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October 29, 2009

Market Updates – Universality of War Propaganda

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

Pakistan


Many of you have raised public and private comments about America’s desire to have a colonial empire. (see comments section of blog) I certainly wish these countries had a functioning democratic system, but it can’t be forced on them and that force has proven counter productive and enormously costly for the USA. (see yesterday’s enlightening Tom Friedman’s editorial) LINK

One of you told me a deeply disturbing story of a Pakistani couple (two doctors) who have their green cards and just returned from visiting relatives in Pakistan. They said the situation there was rapidly deteriorating.  LINK

Pakistan should be our focus not Afghanistan .  As brought up before the fact that we spend 30 times the $ in Afghanistan we do in Pakistan is deeply troubling. If Obama goes ahead with the 3rd surge in Afghanistan that figure could grow to 40 or 50 to 1. We should be giving Pakistan’s fragile democracy more economic aid and listening to the views of their moderates instead of focusing on troop surges in Afghanistan.

Instead America is consumed by war propaganda. Glenn Greenwald writing for Salon makes an excellent point about the Universality of War Propaganda LINK

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow - 1.21% up
NASDQ -2.67% up
S&P500 -2.40% up
Russell2000 -3.51%
-

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, Fundamentals & Analysis

Please Note – Long Term Outlook has changed from CAUTIOUSLY BULLISH to NEUTRAL

This is the first change to Long Term Outlook(downgrade) in many moons . This was done primarily on a technical basis. Both the NASDQ and the S&P 500 crashed through their major support levels (the 50 day moving average = blue line on charts at side of blog) We had an another major meltdown in above average increased volume again. This is the 3rd of 4th time within 5 weeks that volume has on a daily basis confirmed (rose significantly and was above average) a major downside price move (greater than 1%)

Longer term – volume has decreased as stocks have risen throughout the summer and fall. This is another technical sign of impending meltdown.

Markets are also not reacting positively to good news AAPL, GOOG,  AMZN , GS & others who beat expectations on TOP and Bottom line have rolled over and are trading down.  Hot stocks loosing ground on good news is the second canary in the coal mine dying.

Markets run on psychology more than anything else – especially in the short term.  Fundamentally , the situation is positive. The US lags most emerging markets, but even here more than a handful of companies now have top line growth.

The Dollar is the catalyst for this turn. Obviously it rose yesterday and this time the impact on stocks greater than the usual (@1% or less) that is approximately what stocks would have fallen with a+0.36% rise in the dollar. (see dollar analysis below)

When the Long Term Outlook is changed we often go back and forth for a while as stocks move above or below key support levels . Expect a rebound this AM.

Best Read of the Tea Leaves I don’t expect a major roll over -20+%. If/when the dollar starts moving back down stocks should go higher.  However, some sort of correction (a 5 to 10% fall – we are already at 5%) is good for markets.  Anything that goes up too far too fast creates a bubble that bursts.

Also see dollar analysis below.

——–

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) .

The BDI is @ 30% 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 )

The BDI lost a modest -27 points yesterday and closed at 2986. 2nd day of modest losses. A higher high price on its chart pattern has been confirmed The BDI has rallied almost 900 points since late September. =  Bullish for stocks & world trade right now

——-

The Dollar is currently the #1 forecasting tool . It would be a wild guess to predict he daily moves of the dollar, but longer term fundamentals are clearly negative – the trend of a falling dollar should continue.

$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

US dollar rose for for the 4th straight day +0.36% The dollar closed at $76.48 .  This is above the former support – now resistance level of $76.00 . Technically - Bullish for dollar & Bearish for stocks.

The next important resistance level for the dollar is the falling 50 day moving average (blue line on chart). This is at 76.83 this AM. It’s the line in the sand – Best read of the tea leaves is that it will hold. In fact, Investors411 will add to some positions  as we get close to this resistance level.

We 0.40 away from this resistance level. Mighty close.

Last year’s low was around $71,(March 08 ) so there is a long way to go before the major and very crucial support level is reached . The dollar does have a support level around $74.00( a high from about a year ago – see long term chart)


Positions

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

Outside the USA in Emerging Markets (especially China, & Brazil) are much better in the long run - Our problem is one of timing. We can’t get a 5 to 10% dip to invest. Looks like we will get at least our 5 to 10% dip now.  Investors 411 should have much larger positions in emerging markets .

Look to add to EWZ (Brazil) and FXI (China) positions because of dip. If prices continue to fall  will nibble some more

Long Term Outlook = NEUTRAL

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

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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October 28, 2009

Market Update – You Cheat

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

How to Clean Your Computer Screen

Thanks to one of you who sent in this most  valuable LINK

What Happens When You Cheat?

  • You cheat – From Income tax to a college exam – Fines, jail, expulsion – there are consequences.
  • Big Shadow Banks cheat – Get truck loads of money and executive get lavish bonuses
  • Ahmadinejad cheats/steals election – You get the religious leader’s blessing, violently crush opposition and become president
  • Karzai (Afghanistan) steals election – You get a do over even when your brother is perhaps the countries top opium dealer and on the CIA payroll for last 8 years.  LINK

You and I pay consequences and are held accountable. Others….

Back to Back Tom Friedman Editorials – Afghanistan

TF is usually a hawk when it comes nation building and military escalation, but surprisingly he opens with “We need to be thinking about how to reduce our footprint and our goals there in a responsible way, not dig in deeper.” LINK

TF echos what Investors411 has been saying for years – As much as we and moderates in the Arab world want to see modernization we can’t do it for them. In fact, our involvement almost always makes things worse. This time the Pulitzer Prize winner adds

“A strong, healthy and self-confident America is what holds the world together and on a decent path. A weak America would be a disaster for us and the world. China, Russia and Al Qaeda all love the idea of America doing a long, slow bleed in Afghanistan. I don’t. ”

Where’s Waldo – Obama

Unemployment, Afghanistan, Health Care , etc. Where is our charismatic leader? Hard at work?  He spent his last few days going coast to coast on a fundraiser in FD, CA and even right here in MA. He’s out campaigning in VA and NJ.  Politics as usual or change we can believe in?

Is Obama’s work ethic beginning to look like Bush’s on Katrina? -  Difference – Obama does look good on the golf course.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow +0.14% down
NASDQ -1.20% up
S&P500 -0.33% down
Russell2000 -1.13%
-

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, Fundamentals & Analysis

The dollar rules. The correlation is probably around 90% on a day to day basis.  The fall in stocks over the last three trading days is due to the rise in the dollar’s value vs. other currencies.

Basically the dollar falling is an indication that long term debt of the USA is growing relative to other currencies.  Growing US deficits is almost a consensus view. This has been ongoing since 2000.

What caused the three day rise in the dollar is probably all technical.  So many traders were short the dollar (expecting it to fall further) when some entity (probably a central bank(s)) bought dollars the rise forced the shorts to buy to cover.  A simpler explanation of this is basically there were so many sellers that there were no new sellers left.  Same thing often happens with buyers. Remember, just about everybody sold stocks in the spring and the fact that we ran out of sellers was one of the reasons markets turned.

For more see section on dollar below.

——–

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) .

The BDI is @ 30% 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 )

The BDI lost -31 points yesterday and closed at 3013. A higher high price on its chart pattern has been confirmed The BDI has rallied almost 900 points since late September. =  Bullish for stocks & world trade right now

——-

The Dollar is currently the #1 forecasting tool . It would be a wild guess to predict he daily moves of the dollar, but longer term fundamentals are clearly negative – the trend of a falling dollar should continue.

$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

US dollar rose for forthethe third straight day +0.26% The dollar closed at $76.21 .  This is above the former support – now resistance level of $76.oo . Technically - Bullish for dollar & Bearish for stocks.

The next important resistance level for the dollar is the falling 50 day moving average (blue line on chart). This is at 76.88 this AM. It’s the line in the sand – Best read of the tea leaves is that it will hold. In fact, Investors411 will add to some positions as we get close to this resistance level. The rate the dollar is falling has diminished as we approach this important resistance level. A sign that it will hold. However, if it falls we could see a major correction for stocks.

Last year’s low was around $71,(March 08 ) so there is a long way to go before the major and very crucial support level is reached . The dollar does have a support level around $74.00( a high from about a year ago – see long term chart)


Positions

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

Outside the USA in Emerging Markets (especially China, & Brazil) are much better in the long run - Our problem is one of timing. We can’t get a 5 to 10% dip to invest. Investors 411 should have much larger positions in emerging markets .

Look to add to EWZ (Brazil) and FXI (China) positions if they continue to fall this week . Bought more EWZ yesterday (see below)

For Traders (not long term Investors )

NVS (You could also sell 50% and put in a stop/sell order) I sold 50% of NVS (5% of portfolio) for a 12+% gain. Placed a stop/sell order at just under $50.00 for the other 50%.

EWZIt was a mistake to sell (9% of portfolio or 50% of total holding) of this. Buying it back -  Added (5 % of portfolio) EWZ at 71.7.  Will buy more if/when it drops lower.

Traders – Three major tech stocks leading the charge – Hope CSCO joins them when it reports earnings. Investors411 has a (5% of portfolio position in CSCO that is down over 3% )

  • AAPL – cutting edge computers and telecom revolution (phone’s) moving into China.
  • AMZN – Fabulous earnings report and forecast.
  • GOOG – Internet adds is growing even in USA.


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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October 26, 2009

Market Update – Tom Friedman’s Dream or Nightmare

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

Tom Friedman’s Dream/Nightmare

Sunday TF wrote an editorial LINK that opened with imagining President Obama in 2012 standing in Iraq under a banner “Mission Actually Accomplished .”

This is the dream of anyone who wants to build a 20th century colonial empire.  The person who should be standing ALONE under any banner in Iraq in 2012 or any future date is an Iraqi President.

  • Britain got out of India – It wasn’t pretty but the end result is the world’s largest democracy in India and a fragile democracy in Pakistan.
  • The US got out of Vietnam – Again it wasn’t pretty, but now Vietnam has one of the world’s fastest growing economies and even its own ETF – VNM . Like China there is one party rule, but millions are coming out of poverty into a growing middle class.

Our efforts to colonize the Muslim world have made the overall situation worse, cost trillions in dollars and who knows how many lives. Let the nightmare of colonialism go .  If there is a clear and present danger – act. Now we are on the verge of nation building in Afghanistan whose #1 economic product is opium not oil. It’s long past time for a change to a new strategy.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow +1.08% up
NASDQ +0.50% up
S&P500 +1.22% down
Russell2000 +2.04%
-

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, Fundamentals & Analysis


Reading the Tea Leaves BE CAUTIOUS volume has in no way confirmed the move higher. If you look at the beginning of the bull run (March April and May)(check out weekly charts of a major US index) there was huge volume behind the move higher. You expect some slower volume in the summer, but volume has not returned to the markets. In fact there has been significantly more volume on downside days than upside days this month.  Our #1 confirmation factor of price moves is calling for – bears to rule

The Dollar (see below) The slow/moderate fall of the dollar is a trader’s dream . One danger for a fall in the dollar is the rise in oil prices. $100 dollar oil would negatively impact stocks.  As long as the dollar falls it holds up stocks. – Bullish for stocks

Bottom Line – Still CAUTIOUSLY BULLISH Long Term Outlook (see below) The dollar trend is the trump card that is firmly in place. Every big volume decline is trumped by the falling dollar that pushes US equities higher. The second major reason is the stimulus packages in emerging markets like China, India and Brazil have worked. China, especially, never entered recession and the growing middle classes here has led the world equities higher.

The drag is concentrated in the USA. Why – We already had a huge debt, our financial industry still has  huge phony unregulated profits, and we are/will be wasting trillions trying to nation build.

——–

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) .

The BDI is @ 30% 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 )

The BDI rose a significant +42 points yesterday and closed at 3043. A higher high price on its chart pattern has been confirmed The BDI has been rising (with one bump) since late September. =  Bullish for stocks & world trade right now

——-

The Dollar is currently the #1 forecasting tool . It would be a wild guess to predict he daily moves of the dollar, but longer term fundamentals are clearly negative – the trend of a falling dollar should continue.

$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

US dollar rose a significant +0.56% The dollar closed at $75.47 . Bullish for stocks

Last year’s low was around $71,(March 08 ) so there is a long way to go before the major and very crucial support level is reached . The dollar does have a support level around $74.00( a high from about a year ago – see long term chart)


Positions

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

Trades made this week are updated at the end of the week. -  Sold 50% of position in EWZ and all of EWY. This sure looks like – a big mistake – Should have been adding instead of subtracting – especially EWZ – Still no one ever went broke taking profits. - Sorry – Did not update Positions section.

Outside the USA in Emerging Markets (especially China, & Brazil) are much better in the long run - My problem is one of timing. We can’t get a 5 to 10% dip to invest. Investors 411 should have much larger positions in emerging markets .

For Traders (not long term Investors )

NVS - One of the 2 stocks owned (the other is CSCO). This is a swine flu play. Obama has declared a national swine flu emergency and NVS’s vaccine is not due to be distributed till mid December.  NVS is going to have too little too late. Taking profits today. (You could also sell 50% and put in a stop/sell order)

EWZ – Yes it was a mistake to sell 9% of this. Buying it back.  Will add to both FXI (China) and EWZ this week  A falling dollar is just an additional fundamental reason to own these areas. Other reasons have been listed over and over again.

Traders – Three major tech stocks leading the charge – Hope CSCO joins them when it reports earnings.

  • AAPL – cutting edge computers and telecom revolution (phone’s) moving into China.
  • AMZN – Fabulous earnings report and forecast.
  • GOOG – Internet adds is growing even in USA.


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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October 25, 2009

Market Updates – The 3rd Surge

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

The 3rd Surge

Early Iraq War - 10

Fareed Zakaria, editor of Newsweek asks – Do we need a Third Surge in Afghanistn? LINK

  • In Jan 2008 we had 26,607 troops in Afghanistan.
  • The first “quiet” Surge under Bush added almost 22,000 to 48,250 by the end of 2008
  • The second surge in 2009 under Obama we added @ another 20,000 troops
  • Now “generals” have turned up propaganda for a third surge of 40,000 to 80,000 more troops.
  • The total surge in Iraq was only  20,000 troops.

Zakaria offers an interesting alternative strategy. You may or may not like Zakaria’s strategy. But, it is is certainly far less costly than nation building or colonialism throughout the Arab world . See link above.

Two huge bombs went off in Baghdad Iraq today killing hundred(s) (to early to tell how many died) LINK

Just a reminder that in Iraq the Shia slaughtered the Sunni’s (many who were terrorists) and million(s) fled or faced slaughter.  This had a huge impact on entrenching the new Shia dominated government. The new Iraq Shia led government is corrupt, sustains high unemployment, and along with Hamas and Hezbollah was the first to recognize Holocaust denier Ahmadinejad in Iran even while he was brutally crushed the “Green Revolutions.”

The two major Shia religious figures in Iraq with millions of fanatic followers -  Sadr, embraces Ahmadinejad and Sistan i remained silent about “Green Revolution..”

We are about to enter our second decade of nation building or colonialism in the Muslim world that continues to add trillions to our deficit .

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October 23, 2009

Market Update – Education & Financial Reform

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

On Education

Amish schoolhouse in Lancaster County, Pennsylvania in 1941. (from Wikipedia)

Imagine if your were president/dictator of USA. What would you do with education? I would give teachers massive tax cut/eliminate taxes on the first $50,000 they earn and raise taxes on the top 1% of individuals in the country to pay for it. (see yesteday’s Tom Friedman editorial)

Waiting for Financial Reform

Monitor has some excellent comments (see comments section on right side of blog). The long term picture for the USA is certainly one of decline relative to the rest of the world. A fall that is going to hit Main Street harder than anyone else.  We built a huge deficit under the Bush administration & created the worst financial crisis since the Great Depression.

But, we are still waiting for some kind of financial reform.  Add to this we are still spending trillions nation building overseas and stimulus, the usual cure for a recession, is puling us further into debt.  No wonder volume is NOT growing as stocks advance and the dollar  falls. People are loosing confidence in the USA.

One of the  most troubling in all of this is where is the financial reform? Obama was all about “change we can believe in” and aside from a few minor adjustments, where’s the change?  Where’s the transparency? Where’s the accountability? Where are the new laws to prevent corruption?

The reforms that fixed Wall Street after the great Depression were removed and capitalism was left without checks and balances. Look what happened – A massive financial meltdown.  Author Ron Chernow concludes his editorial in today’s NYT  entitled “Everyman’s Financial Meltdown.” as follows ” [we] still await a new season of financial reform.”

More Pay Cuts for Shadow Banks

From yesterdayObama administration is forcing pay cuts on top executives of 7 bailout firms. Good first step. Now we get step two. Fed is proposing review of pay at 28 of the largest shadow banks . LINK Two steps in the right direction, but we need a whole lot more.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow +1.33% down
NASDQ +0.68% down
S&P500 +1.06% down
Russell2000 +1.37%
-

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, Fundamentals & Analysis

This is a US stock market dominated by professionals and traders .  We had another significant rally in weaker volume. The Dow was close to even in volume. Historically volume has always been the #1 confirmation factor of an equity move in price.

Oil prices fell LINK to chart -0.22% to $81.19 . Obviously oil prices above $80 is going to hurt ma and pa consumer in any recovery.  Sure looks like some entity or group is manipulating oil prices. Up 9 of last 11 days and going parabolic (up too far too fast) Oil prices like stocks usually move inversely to the price of the dollar.

The BDI rose significantly again = Bearish for stocks stocksandand world trade.

Reading the Tea Leaves – from yesterday -  There is no specific fundamental(s) that you can point to that says yea that’s the reason stocks tanked in big time volume at in the last hour of trading.  Obviously “the Pro’s” know something us common investors do not. Earnings season has been much better than expected with companies beating on both TOP and bottom line. The dollar fell. The BDI is rising.  Stocks should be rising . Perhaps yesterday’s rally was a delayed reaction to the overall drop in the dollar, rise in the BDI and some better than expected earnings reports.

However, BE CAUTIOUS volume has in no way confirmed the move higher. If you look at the beginning of the bull run (March April and May)(check out weekly charts of a major US index) there was huge volume behind the move higher. You expect some slower volume in the summer, but volume has not returned to the markets.

Best guess is for rally 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) .

The BDI is @ 30% 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 )

The BDI rose a significant +84 points yesterday and closed at 3001. A higher high price on its chart pattern has been confirmed and it sure looks like a bullish run could be starting. =  Bullish for stocks & world trade right now

——-

The Dollar is currently the #1 forecasting tool .

$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

US dollar fell -.09% The dollar closed at $75.05Perhaps yesterday’s rally was a delayed reaction to the significant 0.55% decline in the dollar the day before-the two day total drop is -0.64% Bullish for stocks

Last year’s low was around $71,(March 08 ) so there is a long way to go before the major and very crucial support level is reached . The dollar does have a support level around $74.00( a high from about a year ago – see long term chart)

The falling dollar is getting a lot of PR. A lot of this is politics and fear mongering. However the dropping dollar does show a growing weakness in America economically and the potential for higher inflation. The real test for the dollar lies in the March 2008 lows around $71+

Positions

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

Trades made this week are updated at the end of the week. -  Sold 50% of position in EWZ and all of EWY. This sure looks like - a big mistake – Should have been adding instead of subtracting – especially EWZ – Still no one ever went broke taking profits .

Monitor’s comments are right on (see comments section of blog)-Investing outside the USA in Emerging Markets (especially China, & Brazil) are much better in the long run - My problem is one of timing. We can’t get a 5 to 10% dip to invest. Investors 411 should have much larger positions emerging markets.

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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October 22, 2009

Market Updates – More Troops = Bad Bet

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

More Troops – Bad Bet

Nicholas Kristoff’ s editorial in today’s NYT on why more troops in Afghanistan is a bad bet. Investors411 praised the fact that we tripled aid to Pakistan.  Here’s Kristoff’s money quote.  “American policy makers were completely blindsided in recent weeks by outrage in Pakistan at the terms of our latest aid package — and if we can’t even hand out billions of dollars without triggering nationalistic resentment, don’t expect a benign reaction to tens of thousands of additional American troops.

Jobs Jobs Jobs

Investors411 has painted a bleak picture of long term job prospects for Americans over the last few month. When you add to this shadow banks are still in the shadows and foreclosure problem is at best stabilized you have a bleak picture for Main Street USA.  Perhaps those that have seen gains in their stock portfolio’s since the spring will spend and juice the economy. However, especially for older workers, as Abby Gold in the comments section points out, on Main Street its not a rosy picture.

Solutions – One specific help would be to extend something like the $8,000 homeowner credit for first time home buyers. 350,000 buyers took advantage of this program – it worked especially for lower priced homes. The ripple effect is those new home buyers have to furnish those homes. Two respected individuals have offered their solutions

  • Mort Zuckerman (right of center – editor of US News & World mag.) in an editorial titled “The free market is not up to the job of creating work” suggests a “massive program(s)to restore stable jobs growth.” He suggests a National Jobs bank and allocating $65 billion toward it. LINK
  • Tom Friedman (left of ccenter/pro business – NYT columnist) looks at the failures of America’s education system to keep up with the increasingly  globalized world.  Here’s the money quote – “While the subprime mortgage mess involved a huge ethical breakdown on Wall Street, it coincided with an education breakdown on Main Street — precisely when technology and open borders were enabling so many more people to compete with Americans for middle-class jobs.LINK

Pay Cuts on Bailed Out Companies

Obama administration is forcing pay cuts on top executives of 7 bailout firms. Good first step, but what about all those other shadow financial institutions who used the Fed or collected big time from AIG’s  bailout? Goldman Sachs & many others gets away without any claw backs in this. Huffington Post LINK or NYT LINK

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow -0.90% up
NASDQ -0,59% up
S&P500 -0.89% up
Russell2000 -1.35%
-

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, Fundamentals & Analysis

This is a US stock market dominated by professionals and traders.  Some sort of programed trade kicked in the last hours and the pro’s left the building.  The volume way well above average and the fall from what was a rally was over 1%. Volume increased significantly in the last hour’s price collapse = Bears asserting dominance

The dollar fell significantly which almost always means US equities rally. This again = Bears asserting dominance

The dollar fell so overbought oil prices rose significantly LINK to chart +2.25 to $81.37 . Obviously oil prices above $80 is going to hurt ma and pa consumer in any recovery.  Sure looks like some entity or group is manipulating oil prices. Up 9 of last  10 days and going parabolic (up too far too fast)= Bears asserting dominance

The BDI rose (probably did not have time to react to swift fall in equities)

Reading the Tea Leaves – There is no specific fundamental(s) that you can point to that says yea that’s the reason stocks tanked in big time volume at in the last hour of trading.  Obviously “the Pro’s” know something us common investors do not. Earnings season has been much better than expected with companies beating on both TOP and bottom line. The dollar fell. The BDI is rising.  Stocks should be rising.

Stocks falling on good earnings news, a rising BDI and a falling dollar is a disconnect from what has been a historically a positive trend .  Think of this as a sign in the road saying WARNING SPEED BUMP AHEAD.

——–

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) .

The BDI is @ 30% 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 )

The BDI rose a significant +85 points Friday and closed at 2917. A higher high price on its chart pattern has been confirmed and it sure looks like a bullish run could be starting. =  Bullish for stocks & world trade right now

——-

The Dollar is currently the #1 forecasting tool .

$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

US dollar fell a significant -0.55 % The dollar closed at $75.12 . We have developed a support now resistance (it’s called support on the way down and resistance on the way up) level just below $76 . The dollar closed below its support level. = Bullish for stocks

NB -

  • Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.
  • A slow decline in the dollar = good a rapid decline = bad .

Last year’s low was around $71,(March 08 ) so there is a long way to go before the major and very crucial support level is reached .

The dollar does have a support level around $74.00( a high from about a year ago – see long term chart)


Positions

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

Trades made this week are updated at the end of the week. -  Sold 50% of position in EWZ and all of EWY. Have no position in XLE. Also for TRADERS (not investors) strongly considering buying some companies listed yesterday that had outstanding earnings, but have fallen over last few days.

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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October 21, 2009

Market Updates – Globalization

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

Your Comments

Both Bob Sadinsky and sherwehe have echoed Jon Stewart and added to the Rape and Halliburton /KBR story in the comments section of the blog. The fact that this and other brutal rapes of American women are NOT publicized shows the vast power of American corporations especially those of the military industrial complex.

Obama is a huge disappointment in this. If he stood up and spoke out forcefully for rape victim Jamie Lee Jones you would see headlines behind this story/legislation.

Disaster for Democrats – Globalization

Teddy Roosevelt

Perhaps the headline here should be China Rising - Globalization. See OVERVIEW section of blog for more. Here again is the Good, Bad, and Ugly for globalization.

The Good – Globalization has brought a better standard of living to hundreds of million of people in emerging markets.  It has produced jobs and better paying jobs across emerging markets. Worldwide GDP has expanded

The Bad – If you are an American worker you are the first fired and the last hired. You cost too much to employ relative to cheaper costs abroad. Globalized companies also have to pay for your health care. Ross Perot was right – that giant sucking sound is job loss in America.

The Ugly – Globalization has helped concentrate power and puts wealth/power in the hands of fewer individuals at the top. This leads to corruption and less accountability.  From corporate power in globalized companies to one party rule in China, this trend has helped led to a class of ultra wealthy, powerful and potentially corrupt individuals who are increasingly above the law.

Why it’s disaster for Democrats – They’ve embraced globalized Wall Street instead of fixing the problems.  Jobs are going to be created over seas where markets are growing, labor is cheaper and health care is provided or absent.  Wall Street grows while Main Street suffers = disaster for Democrats in upcoming elections.

Solution – Globalization, like capitalism can work but it needs regulation or rules. Globalization, of course, is part of a world wide capitalist system. Yes it creates faster economic growth. But, it also creates imbalances, or cancers.

Teddy Roosevelt acted and took down growing concentrations of power (monopolies – like Standard Oil) when capitalism raged out of control. This capitalist problem is now far more globalized.  We’ve had many warnings – the last major one was last years financial meltdown.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow -0.50% up
NASDQ -0,59% up
S&P500 -0.62% up
Russell2000 -1.43%
-

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

Mea Culpa Lots of you sent personal emails that I forgot to change yesterday’s stock chart. It was Monday’s results. Sorry Today’s got changed.

Usually volume is the #1 confirmation factor or forecast tool. However, the dollar’s rise or fall is now dominating the US stock market. Since (as discussed in past Investors411) the longer term trend is for a lower dollar –  Stocks should move higher.

Stocks fell in increased, average volume. Technically a moderate short term bearish sign – But the dollar rules right now.

Reality – money is NOT coming into this market from the sidelines. This does not mean we can’t rally further. But it does mean you have to pay close attention as an investor.

After a breakout 8 day rally, oil prices LINK finally fell

——–

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) .

The BDI is @ 37% 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 )

The BDI rose +66 points Friday and closed at 2832. A higher high price on its chart pattern has been confirmed and it sure looks like a bullish run could be starting. =  Bullish for stocks & world trade right now

——-

The Dollar is currently the #1 forecasting tool.

$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

US dollar rose +0.22 % The dollar closed at $75.53 . We have developed a support now resistance (it’s called support on the way down and resistance on the way up) level just below $76 . The dollar closed below its support level. = Bullish for stocks

NB -

  • Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.
  • A slow decline in the dollar = good a rapid decline = bad .

Last year’s low was around $71,(March 08 ) so there is a long way to go before the major and very crucial support level.

Therefore, The dollar can drop much lower and stocks rise much higher till support levels are reached


Positions

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

Review of Positions (Part 3) This section is really for traders who are comfortable owning a position for a day or two – Would sell on any 7 to 10% drop. NOT a Longer term Investment

Recommendation Buy the Dips till the dollar drops to near $72 . Have positions in NVS & CSCO. Waiting on other positions for dip.

NVS – Novartis is a major European drug company that continues to steadily move higher. +13% since bought .  In part this is a swine flu play whose technical chart looks good. Going to sell NVS when flu hits – perhaps a month or two.

AAPL- Apple (don’t own) Fundamentally a fabulous story. Beating on top and bottom line. Only 49% of profits or sales (sorry forgot which one 0 it was announced on CNBC) come from abroad. That means not only Apple exploding in the USA but it has room to grow in faster markets (faster growing GDP) like China/India

CSCO – Cisco. Has been moving into the “telecom revolution” (Apple’s and related products). One of the best internet “picks and shovels” maker. 0% gain/loss since bought. Consolidating right now.

MVIS, – Has best technology in its sector and a couple of huge moves higher. Recommended by one of you

GS , & JPM – Fundamentally the best two financial companies. Their competition is weak and they’ve used taxpayer funds to their advantage (see past Investors411)

CAT – Caterpillar – Best heavy equipment maker. Just had blowout top and bottom line earnings report. A major China/Emerging markets play.

EWZBrazil -Up way too far too fast.  Trader s should lighten up on this ETF

Sold 50% of position in EWZ yesterday for @ a +39% gain. Hope to buy back in on bigger dip. Also have sold all of EWY (South Korea) for +11% gain

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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October 20, 2009

Market Updates – Rape or Halliburton

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

Al Frankin’s Rape Legislation

Jamie Leigh Jones
Jamie Leigh Jones – Rape victim

30 old white Republican men voted NO on Senator Al Frankin’s legislation “that would have required defense contractors to allow their employees access to US courts in cases of rape or sexual assault” The case of Jamie Lee Jones who was gang raped by fellow Halliburton/KBR employees in Iraq and then held prisoner in a trailer sparked this legislation.

To protect Hallibuton these senators had to side against American rape victims. The 30 old white Republicans (including McCain) “might want to rethink your allegiances.” (Jon Stewart ) LINK to his devastating video and story on this

Trickle Down Economics/Health Care

Trickle Down economics started with Ronald Reagan and it has sure worked in making America’s rich richer and disintegrating the middle class. Two editorials by Robert Reich and Frank Herbert t deal with this. (Herbert fails to lay at least some of the blame on Obama.)

  • Safety Nets for the Rich LINK
  • Why Obama Has to do What Letterman Did: Refuse to Pay Hush Money LINK

To Big To Fail

NYT award winning financial columnist Andrew Sorkin’s book Too Big to Fail has an interesting excerpt in Vanity Fair LINK entitled Wall Street’s Near Death Experience. Yes these same guys brought us to the brink, but the excerpt is enlightening. Also in NYT is The Race to Save Lehmann LINK

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow -0.67% up
NASDQ -0,76% up
S&P500 -0.81% down
Russell2000 -1.15%
-

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

US Markets broke out to new yearly+ highs in weak volume.  All that money on the sidelines is staying there. Technicals – Volume in no way confirming the price move higher – However, volume, as a #1 confirmation factor, is getting trumped by the ever sinking dollar.

From yesterday – The FED and the US government is not going to stop shoveling cash at the market as long as unemployment is so high. US companies are not hiring and will first hire abroad where labor is cheaper and growth faster.  So the cash shoveling will continue and Wall Street, once over bought situation is corrected, will continue to rise and the dollar fall. Two major points

  • The rally is based on the dollar falling
  • As long as unemployment grows there is no reason to stop the Fed from stimulating the economy

Therefore high unemployment numbers inversely benefit Wall Street stock prices.  The more we stimulate the economy (0% interest rate loans from to bailouts) the lower the dollar falls. The more we simply print money the  lower the dollar falls and the more profit American base companies make because their goods cost less abroad. (see below for more)

Apple has grand slam earnings report. Flood of earnings this AM. CA T (big equipment maker) also a grand slam.

Both the BD I and the Dollar are bullish for stocks

——–

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) .

The BDI is @ 37% 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 )

The BDI rose +38 points Friday and closed at 2766. A higher high price on its chart pattern has been confirmed =  Bullish for stocks & world trade right now

——-

$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

US dollar fell -0.37 % The dollar closed at $75.37 . We have developed a support now resistance (it’s called support on the way down and resistance on the way up) level just below $76 . The dollar closed below its support level. = Bullish for stocks

NB -

  • Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.
  • A slow decline in the dollar = good a rapid decline = bad .

Last year’s low was around $71,(March 08 ) so there is a long way to go before the major and very crucial support level.

Therefore, The dollar can drop much lower and stocks rise much higher till support levels are reached


Positions

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

Review of Positions (Part 2) (more on stocks tomorrow)

SPX or SSO – This is where you park money instead of cash. Only downside here is it takes 3 days to get to use this $ to make a trade. More aggressive traders can use SSO Longer term investors use SPX (This ETF does 2x what the S&P 500 does) Recommendation Buy the Dips till the dollar drops to near $72 .

NVS, AAPL, CSCO, MVIS, GS , & JPM are all stocks that have been recommended for traders to buy on dips. Would add CAT to that list

EWZ – Up way too far too fast.  Trader s should lighten up on this ETF

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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October 19, 2009

Market Update – Capitalism’s Most Ruthless Monster

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

Capitalism’s Most Ruthless Monster

John D. Rockefeller who owned 90% of US  oil at the beginning of the last century many thought earned the title back then.  The NYT’s Frank Rich LINK , Salon’s Glenn Greenwald LINK and MSNBC’s Dillon RatiganLINK all seem to be nominating Goldman Sachs for this position.  Over the top analogy – yes. But it does have some basis in fact. Ratigan , a former analyst for two financial channels has the best explanation (video) .

Basically, GS  received $70 billion from the government & the Fed while the financial world almost collapsed.(see Ratigan video) GS took that $70 billion and bought everything financial for incredibly cheap prices in the collapse.  They bought stuff with our money that allowed them to keep from collapsing. They "didn’t pay a dime for this money." Basically "legalized theft."  As the authors point out former GS employees permeate both the Bush and Obama administration. How do we get rid of legalized theft?

  • Demand claw backs
  • Get rid of invisible exchanges
  • Stop placing GS executive and their protégée’s  in charge of our government
  • Limit (GS on track for $29 billion) bonuses to firms who got bailed out.

President Teddy Roosevelt broke up the big monopolies including Rockefeller/Standard Oil. Will any of this happen now? Not under the Obama administration or any Republican administration – Too many GS folks running government economic policy. Some bad PR perhaps, but like Rockefeller did, GS will throw shinny new nickels at the poor/us taxpayers – As taxpayers we got royally screwed.

Investing in GS and its main rival JPM (JP Morgan) may be similar to investing in a ruthless capitalist monster(s), but also an obvious financial winner(s) The competition was devastated, they have profits from our cash, the backing of our government, they’re smart and therefore, they rule. -Recommendation – Buy these stocks on dip s

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow -0.67% up
NASDQ -0,76% up
S&P500 -0.81% down
Russell2000 -1.15%
-

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

  • prices fell and the #1 confirmation factor, volume, was mixed = Prices falling always bearish, but volume inconclusive
  • Better than expected earnings for most companies yet markets fail to advance =  Short term bearish signal
  • Dollar rose Friday (see below) = obviously short term  bearish for stocks, But longer term pattern bullish
  • BDI (see below) forms higher high on its chart =bullish for worldwide recovery

FEARLESS FORECAST – Short term it looks like we are over bought and companies not moving higher on good earnings results. This is an indication of a short term correction. However The FED and the US government is not going to stop shoveling cash at the market as long as unemployment is so high. US companies are not hiring and will first hire abroad where labor is cheaper and growth faster.  So the cash shoveling will continue and Wall Street, once over bought situation is corrected, will continue to rise and the dollar fall.

Apple reports this evening

——–

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) .

The BDI is @ 38% 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 )

The BDI rose +40 points Friday and closed at 2728. This confirmed a higher high price on its chart pattern =  Bullish for stocks & world trade right now

——-

$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

US dollar rose +0.15 % The dollar closed at $75.62. We have developed a suppor t now resistance (it’s called support on the way down and resistance on the way up) level just below $76 . The dollar closed below its support level. = Bullish for stocks

NB -

  • Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.
  • A slow decline in the dollar = good a rapid decline = bad .

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

Positions

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

Review of Positions (Part 1) All recommendations for longer term investors unless otherwise indicated.

GLD – ETF for gold – Technically broke out over major resistance level at @ 100+. This is mostly a play that the US and other debt ridden G 7 nations will keep throwing money at economic problems till unemployment situation reverses itself. The longer this takes the higher GLD will go.  Mid 2010 is best read of tea leaves on this, but the created jobs will be tied to government bailouts in the US and not US companies producing jobs. – Recommendation – Buy the dip

EWZ – ETF for Brazil – This country is going parabolic in price now (not volume).  Going way up too far too fast. Very rich in natural recourses and more progressive government has meant more money for middle and lower classes who juice the economy and spend the cash. Due for a moderate/significant correction. Recommendation If there is a big spike in volume take some profits.

FXI – ETF for China – China has gone up too far too fast this year and is now lagging or mirroring US equities. China’s growth and huge stimulus package (relative to GDP) has led a worldwide recovery.  Somebody coined the word Chimerica and its true. Both economics are bound together through globalism.  The US middle & lower classes are shrinking , but the Chinese middle class and lower class is growing. This is now a decade(s) old trend.  Recommendation buy China on dips

EWY – S. Korea (much smaller position ) Tied to Chimerica, but N. Korea is a problem. Traders may want to take profits on any rally. There seem to be better countries to invest in like energy rich Canada, Australia or any country that is not consumed by debt and wasting money fighting wars. – Recommendation Hold or take profits on any rally.

More tomorrow. Including individual 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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