Investors 411 Blog

by Barr Jozwicki
February 26, 2010

Economic Hit Men

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

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Greece, Debt and YOU

You may or may not know Greece is having a problem with its financial debt. (NYT article) This small country, thousands of miles away is the tip of the iceberg of unsolved problems that directly relate to YOUR financial well being. Let’s put this in Bullet points

  • A major reason Greece is in such trouble is because, like AIG and so many homeowner mortgages, Credit Default Swaps were placed on their debt. They still are being place on them today by shadow banks and hedge funds (Aside – hedge funds – are the equivalent of “economic hit men” and are perhaps even worse than  shadow banks – more later)  So there are a whole crew of hit men or CDS traders who will make money or are investing to see Greece fail and default on their debt.
  • If Greece goes down, a lot of other European countries, who are in an almost similar situation, could follow. The list includes Ireland, Portugal, Spain, England and former Russian satellite countries. “Economic hit men” (Harvard/Oxford prof Niall Fergeson’s term for hedge funds) are the vultures circling here waiting to make money off the kill.
  • California, Michigan Rhode Island and many US states are likewise in the same boat. Without the Stimulus package they could have gone under already.
  • So is the USA – Except we have printed, & borrowed over S10 trillion to temporarily fix our problems.

This recovery, so far, is based on smoke and mirrors – Not transparency and rules that keep economic hit men like the traders at from AIG, or hedge funds from bringing the financial world to its knees.

Investing bottom Line - For years it was easy to recognize that globalization economically favored both emerging market growth and the privileged/wealthy class in the USA. Investors411 was very successful and careful in choosing investments outside the USA.  That potential still exists. However, an unregulated shadow financial system full of roving economic hit men exits. So, we have to move more cautiously, because the chances of economic bubbles growing and bursting is still INCREASING.

Therefore, using technical shorter term oscillators like the McClellan makes more sense right now.  It, no longer your parents buy and hold forever market.

Coming next – Economic Hit Men – Hedge Funds

Bloom Box (con’t)

About the most discouraging news, when you separate the hype is that the Bloom Box has not yet been built as an “in home power plant.” The technology may not be revolutionary, but who cares as long as it works and can be put into production sooner rather than later.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -0.51% up
NASDQ -0.08% up
S&P 500 -0,21% up
Russell 2000- +0.00% -

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See PositionsStrategy , and Overview for changes made over weekend.

The day started out as a disaster for US equities and recovered a lot of those losses. Even though we closed down in higher volume bulls had something to be happy about because of the recovery.  It seems like this market is looking for an excuse to rally.  It’s fundamentally hard to understand why, but some pretty bad news recently including weekly jobless data, Greece (see above) increased housing problems, & double dip inflation fears  yesterday, doesn’t seem to be able to sink stocks. Markets holding their own or have slight losses on bad news is a bullish sign.

Therefore, best read of the tea leaves is that we will hit +60 on the McClellan before we hit 0.

Significant Indexes

  • McClellan Index fell to +28.62 We are somewhat oversold, but have a ways to go to +60 Oversold territory.

In answer to an email question – how did I come to determine +/- 60 as overbought or oversold? The McClellan Oscillator on the NYSE is one of dozens of indicators that show the market oversold or overbought. I like it because it is relatively simple.  Most stocks follow the trend of the entire markets. (say @ 80+%). This is especially true for, the ETF’s which are market baskets of stocks.

Click on the chart of he index above and adjust it to 2 or 3 years.  Note every time chart went over +/- 60. What I did then was also put up a chart of S&P 500 adjusted to the same time and compared the two. It’s not a perfect correlation, but if you go long (buy) when the McClellan dips to -60 or below you or sell (or go short) when it reaches +60 you would have done better. There are some weaknesses in just using the +/- 60 system that I’ll go over at a later date.

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) – These are positions I actually own

Will be lightening up when/if positions reach oversold 0n McClellan Oscillator.

As stated on Tuesday –

I’ve also set what’s called a stop/sell orders  on at @ 2% above what it was bought for

  • recently bought (added to) EWZ
  • 1/2 of MOO, a longer term position.
  • The remainder of THY

Came very close yesterday to reaching stop/sell or selling TYH. This AM I raised stop/sell order to about 3% above what they were bought at. Will also, preferably, sell these positions if/when stocks are overbought.

IMAX – doing fine – really hope this will be a long term hold – and there will be other dips to buy into on the way up.

Other stocks on YOUR watch list – the earliest I would nibble is when the McClellan Index falls below 0 (zero)

Not adding to any major positions until markets become oversold again.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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February 25, 2010

Bloom Box

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

The Holy Grail of Fuel Cells?

The Terminator, WalMart’s CEO & Colin Powell

Add the CEO of Google and you have one of the most hyped and perhaps revolutionary product launches in history was launched yesterday – The Bloom fuel cell box – Low cost clean energy whose primary ingredient is sand in now being used by some major US companies. Hard to tell the hype from reality, but if you missed 60 minutes on the Bloom energy box the 3  links above will give you some more information.  Seems like a $3,000 clean energy box in your home will produce electricity at about 1/2 the rate currently charged.  For all its faults America still has the greatest innovators on the globe.

Shooting Shadow Banks

With a clenched jaw President Obama stated about the shadow financial institutions on January 21st – “If these folks want a fight, it’s a fight I’m ready to have,” In front of the Business Round Table all that tough talk turned to jello.  Paul Volker & Elizabeth Warren seem to be left out on a limb that is being cut off. Enlightening editorial in New Republic by Peter Boone & Simon Johnson

Health Care Summit Today

Obama’s six hour health care summit is being held today. Dylan Ratigan (MSNBC Show) pointed out that insurance companies in 4 states plan to raise premiums over 20% this year.  For many the Democrats have sold out to the insurance industry and Republican’s simply want to do nothing to prevent Democrats from getting any credit.  Both parties are dominated by lobbyists. Ratigan also has a piece on the Bloom Box yesterday.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow +0.89% down
NASDQ +1.01% down
S&P 500 +0.97% down
Russell 2000- +0.86% -

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

The Terminator, WalMart’s CEO & Colin Powell

Add the CEO of Google and you have one of the most hyped and perhaps revolutionary product launches in history was launched yesterday – The Bloom fuel cell box – Low cost clean energy whose primary ingredient is sand in now being used by some major US companies. Hard to tell the hype from reality, but if you missed 60 minutes on the Bloom energy box the 3  links above will give you some more information.  Seems like a $3,000 box in your home will produce electricity at about 1/2 the rate currently charged.  For all its faults America still has the greatest innovators on the globe.

Shooting Shadow Banks

With a clenched jaw President Obama stated about the shadow financial institutions on January 21st – “If these folks want a fight, it’s a fight I’m ready to have,” In front of the Business Round Table all that tough talk turned to jello.

Technicals, Fundamentals & Analysis

See PositionsStrategy , and Overview for changes made over weekend.

Markets rose and volume fell.  Up days on lighter volume has been the norm for months.  Roughly 80% of the rally days have seen a DECREASE in volume.  This is NOT good in the long term for stocks. About 80% of the previous days losses were made up.

The US shrugged off the bad consumer confidence news two days ago  and financials led stocks higher. (See above) Obama has flipped flopped on getting tougher regulations for shadow institutions so many times I’ve lost count. Bottom Line – nothing’s been done in since he took office. In fact dropping mark to market accounting has made major shadow banks less transparent. Short term this is a boon for stocks, but longer term it just means without transparency or any regulations other financial bubbles will inevitably form.

Significant Indexes

  • McClellan Index rose to +36.20. We are once again approaching oversold territory.  This looks like a second leg up into an oversold position – greater than +60

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) – These are positions I actually own

Will be lightening up when/if positions reach oversold.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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February 24, 2010

Tick Tock, Tick Tock

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

Bubble’s Bursting

YOU feel like you’re standing in a room and looking around with everyone else to see if anyone else notices there’s a massive time bomb about to go off and no one is doing anything about it. You watch politician’s babble about cutting waste, foreign aid or welfare recipients and realize that’s what’s been done for 20 years and there’s less than 2 or 3% of this budget left to cut. Here’s the naked reality

  • Medicare & Medicaid are going to explode in cost as baby boomers reach retirement
  • Social Security payments are going to explode too. Each of these entitlements alone dwarfs political babble about cutting waste etc.
  • Military/weapons spending exploding higher and now is the #1 government spending category
  • Tax cut advocates are screaming for more and crashing planes into buildings
  • Our shadow financial system has drained trillions in further resources and remains in the shadows.
  • Health care cost are exploding out of control
  • Massive private debt (credit card,housing,job loss etc) is driving many Americans into despair.
  • Massive debt crisis in US  trade
  • Housing bubble has burst

When you consider all this it seems like a miracle that Obama has kept the American economy & the stock market afloat.  Politicians on every side think more their own power instead of getting something done.  You get so sick & tired of listing to politicians blaming others and calling for “a dose of reality” instead of sitting down together and getting something done. Meanwhile – Tick Tock, Tick Tock, Tick Tock – BOOM.

Investing Bottom Line – These financial liabilities and our inability to solve them are why it is  no longer safe to buy and hold US equities.  The potential of financial bubbles growing and bursting are just too great. Our government just too polarized. It’s hard to see a decade without continued financial meltdowns.

Death Toll = 1000 in Afghanistan

Obama has joined Cheney/Bush and continues to try to nation build in Afghanistan. US on Feb 19th reached 1000 casualties.  Obviously, the surge of American troop here has a lot to do with upcoming wars in Iran (Afghan. & Iraq surround Iran) and Pakistan (Afgan also boarders Pakistan).  We’ve seen our military budget double over the last decade and its continuing to grow perhaps faster than Medicare, Medicaid and Social Security will.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -0.97% up
NASDQ -1.28% up
S&P 500 -1.21% up
Russell 2000- +1.14% -

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See PositionsStrategy , and Overview for changes made over weekend.

US Consumer Confidence plunged yesterday. The monthly index had just hit a 16 month high and it plunged yesterday. Simply put Consumers are worried about the economy. They make up @ 70% of GDP.  After a solid 3 month rise the unexpected fall from 56 to 46 could means the consumers fell like they took it on the chin last month. This is bad news for the US economy, but many US stocks are rebounding because of Asian and Emerging market growth.

There is obviously a disconnect between US stocks and the US economy US Stocks can rise without the US economy because many of them rely on profits from abroad.  But, Europe is in trouble and emerging markets alone are not big enough to carry the res of the world.

Markets fell as volume rose. Volume was slightly above average. Would have expected more volume. Surprised that US markets did not fall further.  Another indication that many long term investors are simply not interested in stocks = Bearish signal

Two Major events today. Toyota’s embattled CEO & Bernanke in front of congress

Significant Indexes

  • McClellan Index fell to +18.33. + or – 60 is our overbought/sell or oversold/buy levels.  +18.33 is approaching neutral or 0

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) – These are positions I actually own

Sold another 1/3 0f TYH at 131.35 for a +6% gain. I’ve also set what’s called a stop/sell orders  on

  • recently bought (added to) EWZ at @ 2% above what it was bought for
  • 1/2 of MOO, a longer term position.
  • The remained of THY

This is just protecting gains before they turn into losses

McClellan Oscillator is not close to buy or sell position.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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February 23, 2010

Fear and Greed

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

Holder

At. Gen. Holder defends American Justice System

Fear and Greed

These are the two basic factors that move stock markets and a whole lot more.  Of course they sometimes go under other names- sex, survival, desire, risk etc. but we are manipulated by them. (see yesterday’s update)

Let’s take a look at some work done by two Israeli scientists in 1979 Kahneman and Tversky that show how we all miscalculate data when confronted with simple financial choices.

Group 1 was given $1000 Israeli pounds and given a

  1. 50% chance of winning an additional 1000 pounds – 16% chose this option
  2. 100% change of winning an additional 500 pounds – 84% chose this option

Group 2 was given $2000 Israeli and given a

  1. 50% chance of losing 1000 pounds - 69% chose this option
  2. 100% chance of losing 1000 pounds – 31% chose this option

In this and other experiments K&T showed a striking asymmetry. Fear (risk) of a financial loss was about 2 1/2 times greater impact than a simiar financial gain. FEAR WINS BIGTIME.

Bottom Line – From Investing to politics to anything involving human behavior, almost all of us succumb to this fear biasThe trick or path is to overcome this fear bias and you will get better results. Of course, there are other cognitive traps. (see yesterday’s pop quiz)

Justice System Nails Another Terrorist

The headline says it all. The American justice system worked and we bagged another terrorist yesterday.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -0.18% down
NASDQ -0.08% down
S&P 500 -0.10% down
Russell 2000- +0.10% -

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See PositionsStrategy , and Overview for changes made over weekend.

Low volume and nothing really happened. Technically, the longer we remain flat the greater the chances of a fall. Difficult short term call here – but it looks like a small correction then another push higher into oversold territory.

ETF’s- Selling a little (taking profits) into small rallies and more in BIG rally. Sold 1/3 of TYH yesterday at 139.00 for @ +18% profit. Still have 5% of portfolio position in TYH

Significant Indexes

  • McClellan Index fell to +46.16. Basically +60 = overbought and usually a time to sell or lighten up on positions. This is NOT a hard and fast rule but guideline. There has been a sharp fast change and a lot of upside momentum last week. So there is still psychologically a lot of positive momentum out there.

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) – These are positions I actually own

Mea Culpa – Should have added more to stock positions while McClellan Index was down at -60. Since stocks rallied dramatically last week so should any stocks we have on our watch list. Unless there was a special circumstance, these stocks should be outperforming the major US indexes.

Thanks to several of you who are sending in additional lists of prospective stocks. Have not had a chance to study them all yet, but will include them in future lists. Trying to keep list under a dozen stocks. This watch List comes from the stocks YOU send in. Tried to pick best of the ones you sent in. As stated before I’m more confident with ETF’s than stock picking. Since the McClellan Oscillator is close to +60, or overbought – buying now is more dangerous.

Last Update 2/11/10. Recommendations from 2/11 in black. New thoughts in violet

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

  • AAPL - Formed a double bottom trading pattern @ 190 - a buy the dip opportunity Now at 200, but showing danger of breaking down – May be dropped from list
  • CAAS Broke down though 50 day, but has some STRONG volume up days. A China play that will follow FXI. Tempting Lots of volume behind rally days and yesterday had big breakouthold if you own or buy the dip.
  • PCLN Fell below 50 day moving average. Formed a double bottom bullish trading pattern. A buy the dip opportunity Big earnings breakout – market leaderwished I had bought itNow wait for dip.
  • FOversold, and well down from highs. Has formed a base at 10.5  - a buy the dip opportunity – Flatlining or Forming a base
  • DRWI - Big exporter to China -  Sitting on 50 day MA support level  No big volume as stock dropped= good sign. Buy the dip . Weak volume behind move upMay be dropped from list
  • ENOC New – Reduces costs for utilities 50 day MA acting as support Potential buy the dip Breakdown
  • IMAX Great long term chart – Poor short term chart. Lower highs and lower lows  Investors411 has a 2% of portfolio position in this stock. Sell at least 1/2 into next rally. Now own 3% Due for correction - sell 1/2 into rally – buy on dip – or just hold if you’re a long term investor
  • GS, Often considered the #1 Shadow bank seems to have formed base at @ 150 Tempting. Up a bit but volume dropping Not Interested
  • CSCO, Techs new leader Moving up despite rocky market a by the dip Up, but tech not leading markets now – Better than AAPL – Not Interested
  • SHOO, Great long term chart. Pulled back and is forming a base. Would like to see a bigger base, but tempting Moved up to old high/resistance level - Needs breakout- Tempting
  • ICON, Did NOT form lower low over last two weeks as markets toasted a buy the dip Slow steady move higher with breakout yesterdayA buy the dip
  • VPRT Another stock that weathered recent pullback well a buy the dip Moved up to breakout level and pulled back yesterdayA buy the dip
  • DGIT Thinly traded, but potential winner – just broke above its 50 day MA a buy the Dip Had breakout in big volume and is now dipping - A buy the dip
  • CTCT Rebounding stock, has a of good volume up days has breakout potential Broke out and is in pullback- A little weaker than other choices, but buy the dip
  • VCI Good volume, good chart Somewhat overextended A buy the dip underway – Major breakout, then rallied more and yesterday big dropToo volatile for me

AnalysisNotice that the vast majority of these stocks moved higher as conditions of overall US equities went from oversold to (almost) overbought. Big lesson here is to buy when markets are OVERSOLD. YOU have chosen some pretty good stocks.

I’m familiar and use VPRT & PCLN. Plan to own them on dips hopefully sooner than later. Others that look decent on dips are CAAS, ICON, DGIT & CTCT

Caution – Markets are close to overbought

Will go over a few of the new stocks you have sent in later in week or early next week.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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February 22, 2010

The TERROIST attack.

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

Austin Plane Crash

Act of Terrorism in Austin Texas

Can Americans Think?

Is there something hardwired into everyone on the plant that prevents logical conclusions? Perhaps were just manipulated mud  for corporate media (see story below).  Everyone thinks THEY are smart and the rest of the population is, how should you put it – lacking.

So here’s a quick quiz. It should take you a second or two to answer. Yet over 50% of Americans get this simple question wrong. – A bat and a ball together cost one dollar & 10 cents and the bat costs one dollar more than the ball.  How much does the ball cost. (answer below)

The TERRORIST Attack

Last Thursday Joseph Stack burnt his home and crashed his plane into an IRS building () in Austin Texas killing or injuring at least a dozen people.  Unbelievably, the corporate US media, failed to label this a terrorist attack. Sure there were grumblings, but callers into Fox News & other right wing outlets told of their outrages against the IRS & taxes.

The ultra right wing editorial department of the WSJ called him just a “tax protester.” Even Worse Scott Brown, Massachusetts new Republican senator ” appeared to embrace the possibility that the pilot of the plane might have been one of his followers.” Even left wing Newsweek debates the point.

Bottom Line - Americans are brainwashed with fear. If this guy was a Muslim who crashed his plane into a US government building it would be a clear terrorist attack. Is there any doubt that the US corporate media would be alive with stories about this act of terrorism today if he was Muslim who crashed a plane into a government building.  Instead the story has all but vanished.

ANSWER

Answer – The Ball costs .05 cents and the bat $1.05.  Perhaps you got the answer right, perhaps wrong. But if you’re patting yourself on the back for getting it right, there are a large number of  cognitive traps that we all fall too easily into.  Of course, perhaps the largest is being manipulated through FEAR. (more tomorrow)

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow +0.09% down
NASDQ +0.10% up
S&P 500 +0.22% up
Russell 2000- +0.37% -

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See PositionsStrategy , and Overview for changes made over weekend.

Last Week’s FEARLESS FORECAST - “Oversold market’s natural direction is up….Bullish.”

In one week US equities have gone from oversold to overbought positions. Almost overbought – (see below) We’ve had a week of rally days in weak below average volume. Volume, the #1 confirmation factor of a price move, has NOT confirmed this rally.

Lowe’s – the home products giant – had a positive report this AM.

Major group of Business economists up outlook for 2010 & 2011

Monday’s have been historically  rally days for the last few months. A big oil merger is going to add fuel to “merger Monday.”

Significant Indexes

  • McClellan Index rose to +56.23. Basically 60 = overbought and usually a time to sell or lighten up on positions. This is NOT a hard and fast rule. There has been a sharp fast change and a lot of upside momentum. So there is still psychologically a lot of positive momentum out there.
  • BDI The Baltic Dry Index which measures world trade (also a proxy for China) has fallen since late November, but rallied last week.
  • US Dollar – The dollar has come up off its low at about $74.5 in Dec. and rallied to $80.59. Rising dollar is usually bad for markets. Dollar was flat last week. A breakout Friday was

This Week’s FEARLESS FORECAST

Everything technical (volume & McClellan) is showing that we are running out of rally room.  However behaviorally psychology has changed. Unemployment down, many big businesses have cash, Lowe’s news, the Fed raising discount rate, tame CPI numbers and economist almost universally agreeing the stimulus has worked are all making investors think rally.

It sure looks like investors want to rally despite approaching oversold positions. When bulls charge you get out of the way. Nevertheless, the only time the McClellan reached over 100 was in the rally after the 2008 meltdown.  Things have NOT reversed themselves as radically as then.  Therefore, selling into any major rally that will boost stocks. ( perhaps as much as 50% of portfolio & buying back on a dip in McClellan to zero or below.

Rally Ho, but it gets sold off at end of week.

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) – These are positions I actually own

Mea Culpa - Should have added more to ETF positions while McClellan Index was down at -60.

ETF Positions

  • 10% of portfolio EWZ (Brazil)
  • 6%of portfolio FXI (China)
  • 10% of portfolio MOO (agriculture)
  • 3% of portfolio IMAX (3D)
  • 7.5% of portfolio TYH (3x what techs do)

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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February 19, 2010

Just Stocks

Author: Barr Jozwicki - Categories: Market Update

Just Stocks

If you have followed the mantra’s on stocks/sectors/indexes/ETF,s you know volume is the #1 confirmation factor of a price move.  We’ve had 4 to 5 days in a row that US Equities have moved higher in below average volume.

Also the McClellan Oscillator is at +57 or oversold. (+60 is the point we use, but +57 is close enough)

All this indicates a reversal is very likely. This is a time to lighten up on positions.

Barr 

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February 16, 2010

On Break

Author: Barr Jozwicki - Categories: China, Market Update

Investors411 is on break this week (2/15)

My primary computer is down and this one does not interface well with the program I use to write web site.

Short term markets did very well despite some awfull news Friday = Bullish

Longer term, I’m going to be selling into any rallies.  

Late Last week I did add to THY (The ETF that does 3X what techs do) But I have tight stop at the price I bought it for.

Barr

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February 11, 2010

Health Care Debacle

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

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Health Care Debacle

There’s something in human nature that loves it when you can say I told you so.  Health Care reform attempts are crumbling and just like the greedy Wall Street Shadow bankers Anthem Blue Cross of California can’t wait to raise prices 39% on March 1.

Everyone knows that our long term debt problem is centered on a massive growth in military expansion and health care. Obviously unsustainable if you keep cutting taxes. The problem in health care is we spend far more on health care than we get in outcomes There are over two dozen industrialized democracies who pay far less and live far longer.  There may be problems in their heath care systems, but nobody’s voted to go back to a system like the USA’s.

One wonders how much of this 39% increase did Anthem use to defeat health care reform.

71% of Americans – Palin NOT Qualified to Be President

Latest WaPo/ABC News Poll shows Sarah Palin is NOT qualified to be President.

But,  according to those of you who comment on this blog – Is Barak Obama Qualified to be President? – Yes, this blog has been tough on Obama, but does his latest attempt to “begrudgingly” support  big bonuses on Wall Street in the very companies that help cause the meltdown  bring his credibility into question?

Paul Krugman – ” I’m with Simon Johnson here: how is it possible, at this late date, for Obama to be this clueless?

Greece

The whole world waits to see what’s going to happen with Greek debt. Thee is a big meeting today in Europe. As far as stocks are concerned the sooner this is settled the better.

Greece like the USA and many European markets ran virtually “unregulated free markets”. Credit Default Swaps are still being traded on the bonds that Greece uses to finance its debt.  Someone has to pay for Greece financial system going overboard. Once again the end result will be Socialism for the rich and the working poor will feel the heat.

Dubai had the UAE to bail them out and Greece has France/Germany.  But there are lots of other countries out there who will feel the aftershocks of 2008 USA “unregulated free market” meltdown. Once again socialism for the rich and capitalism for the poor who pay and pay and then have their children pay and pay.

.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -0.20% down
NASDQ -0.14% down
S&P 500 -0.22% down
Russell 2000- -0.23% -

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

Basically a nothing day.   The whole world waits to see what’s going to happen with Greek debt. Thee is a big meeting today in Europe. As far as stocks are concerned the sooner this is settled the better. We have a concept, not a specifc plan.  When a plan comes expect a short tem rally.

Greek bailout – Short term good news, but long term bad news. The more the Euro countries have to bail out the lower the Euro goes. Therefore relatively the dollar goes up. This costlier dollar makes our goods cost more in Europe and hurts US exports.

Oversold market’s natural direction is up.

Significant indexes – Forecasting tools for market direction

  • McClellan Index fell to -32.47 =Moving away from Oversold. We’ve passed -60 or oversold levels twice recently. When the  McClellan Oscillator gets past those levels its a signal to buy.  The more we are over -60 the better at least a short term buy will come out successful. -32.47 is a better entry point than +32,44, but not as good as -60 or higher and beyond.

Positions

The  Positions Section has the latest buys and sells – Revised positions last weekend) – These are positions I actually own

Thinking about nibbling on ETF’s & stocks (see yesterday) as long as McClellan stays in the red.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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February 10, 2010

New Mexico Moves it Money

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

Map of the United States with New Mexico highlighted

New Mexico

Move YOUR Money

The  state of New Mexico’s house voted 65 to 0 to move their money ($2 to 5 billion) from the big shadow banks to the local community banks. So why can’t YOU Write your state legislatures. Tell them what New Mexico did.  Tell them what YOU did. You can make a difference.

Elizabeth Warren Calls Out Wall Street

part 2

Great follow up by James Kwak editorial on how the Big Shadow banks will try to block Warren and reform. Obviously the entire Federal government failed to stop the Shadow banks bring this country to its knees.  All the TEA party people, Rush Limbaugh, Glenn Beck will rise up to  scream oppose to any attempt by the Feds to better protect the common working man and woman – They will call it socialism, big government, and stifling the markets.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow +0.52% up
NASDQ +1.17% up
S&P 500 +1.30% up
Russell 2000- +1.45% -

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

Technically, Volume. out #1 confirmation factor, seems to be turning in favor of the bulls.  For the last few days rallies instead of price declines seem to begetting the bulk of the volume.  While its too early to claim victory on this price roller coaster a bullish trend is developing. Perhaps the single biggest basis for this potential bullish trend are US equities are oversold (see below)

Fundamentally -Looks like rally may be starting and European countries are going to protect potential defaulting countries. Short term positive – long term negative. Here’s the question – Will Greek workers be happy with austerity demanded by German banks? Is Greece like the Countrywide Bank (first of the big USA banks to fail) of the USA?

US trade deficits just got bigger -$40.2 billion – for last month. A bigger than expected number probably due to strengthening dollar. Bearish stat

Significant indexes – Forecasting tools for market direction

  • McClellan Index fell to -37.14 =Approaching Oversold. We’ve passed -60 or oversold levels twice. When the  McClellan Oscillator gets past those levels its a signal to buy.  The more we are over -60 the better at least a short term buy will come out successful. -37.34 is a better entry point than +37,34, but not as good as -60 and beyond.

Positions

The  Positions Section (also at top of blog) has the latest buys and sells – Revised positions over weekend) – These are positions I actually own

SELLING & BUYING

These are YOUR selections

Stock Watch List

NB – I feel much more confident with ETF’s because they reflect global trends than individual stock. Too many things can go wrong with individual stocks. Click on ticker symbol for chart

Caution – You have to be careful that the dip does NOT break trough a major support level. Then the dip becomes toast

  • SEED A China related stock. Broke down through support levels and created lower low. Trend broken. removing from list
  • AAPL - Formed a double bottom trading pattern @ 190 - a buy the dip opportunity
  • CAAS Broke down though 50 day, but has some STRONG volume up days. A China play that will follow FXI. Tempting
  • PCLN Fell below 50 day moving average. Formed a double bottom bullish trading pattern. A buy the dip opportunity
  • FOversold, and well down from highs. Has formed a base at 10.5  - a buy the dip opportunity
  • DRWI - Big exporter to China -  Sitting on 50 day MA support level  No big volume as stock dropped= good sign. Buy the dip .
  • ENOC New – Reduces costs for utilities 50 day MA acting as support Potential buy the dip
  • IMAX Great long term chart – Poor short term chart. Lower highs and lower lows  Investors411 has a 2% of portfolio position in this stock. Sell at least 1/2 into next rally

YOUR new Stocks (sorry several of you sent multiple lists and I picked what looked best)

  • GS, Often considered the #1 Shadow bank seems to have formed base at @ 150 Tempting.
  • CSCO, Techs new leader Moving up despite rocky market a by the dip
  • SHOO, Great long term chart. Pulled back and is forming a base. Would like to see a bigger base, but tempting
  • ICON, Did NOT form lower low over last two weeks as markets toasted a buy the dip
  • VPRT Another stock that weathered recent pullback well a buy the dip
  • DGIT Thinly traded, but potential winner – just broke above its 50 day MA a buy the Dip
  • CTCT Rebounding stock, has a of good volume up days has breakout potential
  • VCI Good volume, good chart Somewhat overextended A buy the dip underway

Bottom LineWe are oversold and ready for at least a short term run – Investors 411 opened a 5% position in TYH (3x financials) Friday at 117.14  TYH now at 123.56 Sold 50% at 124.85 on Friday for +6% gain.

Big Mistake here was not to commit more $ TYH to trade.

I’d much rather buy while the McClellan Oscillator is -37 than +37. But, the lower the McClellan goes the better the buying opportunity.

Lots of the above stocks have technical potential IF there is a rally

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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February 9, 2010

Wall Street’s Race To The Bottom

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

The Best Editorial of 2010

Warren

Elizabeth Warren in the WSJ

Here’s The WSJ editorial link- in case my link does not work – here’s the  http://online.wsj.com/article/SB10001424052748703630404575053514188773400.html

Below is the full editorial

“Wall Street’s Race To The Bottom”

By ELIZABETH WARREN

Banking is based on trust. The banks get our paychecks and hold our savings; they know where we spend our money and they keep it private. If we don’t trust them, the whole system breaks down. Yet for years, Wall Street CEOs have thrown away customer trust like so much worthless trash.

Banks and brokers have sold deceptive mortgages for more than a decade. Financial wizards made billions by packaging and repackaging those loans into securities. And federal regulators played the role of lookout at a bank robbery, holding back anyone who tried to stop the massive looting from middle-class families. When they weren’t selling deceptive mortgages, Wall Street invented new credit card tricks and clever overdraft fees.

In October 2008, when all the risks accumulated and the economy went into a tailspin, Wall Street CEOs squandered what little trust was left when they accepted taxpayer bailouts. As the economy stabilized and it seemed like we would change the rules that got us into this crisis—including the rules that let big banks trick their customers for so many years—it looked like things might come out all right.

Now, a year later, President Obama’s proposals for reform are bottled up in the Senate. The same Wall Street CEOs who brought the economy to its knees have spent more than a year and hundreds of millions of dollars furiously lobbying Washington to kill the president’s proposal for a Consumer Financial Protection Agency (CFPA).

Within the thousands of pages of print in the “Restoring American Financial Stability Act” now before the Senate, the consumer agency is the only proposal that would help families directly. Even those most concerned about the role of personal responsibility concede that it is hard for families to make smart decisions and to compare products when the paperwork on mortgages, credit cards and even checking accounts has morphed into reams of incomprehensible legalese.

The consumer agency is a watchdog that would root out gimmicks and traps and slim down paperwork, giving families a fighting chance to hang on to some of their money. So far, Wall Street CEOs seem determined to stop any kind of watchdog. They seem to think that they can run their businesses forever without our trust. This is a bad calculation.

It’s a bad calculation because shareholders suffer enormously from the long-term cost of the boom-and- bust cycles that accompany a poorly regulated market. J.P. Morgan CEO Jamie Dimon recently explained this brave new world, saying that crises should be expected “every five to seven years.”

He is wrong. New laws that came out of the Great Depression ended 150 years of boom-and-bust cycles and gave us 50 years with virtually no financial meltdowns. The stability ended as we dismantled those laws and failed to replace them with new laws that reflected modern business practices.

The reputations of Wall Street’s most storied institutions are evaporating as the lack of meaningful consumer rules has set off a race to the bottom to develop new ways to trick customers. Wall Street executives explain privately that they cannot get rid of fine print, deceptive pricing, and buried tricks unilaterally without losing market share.

Citigroup learned this the hard way in 2007, when it decided to clean up its credit card just a little bit by eliminating universal default—the trick that allowed it to raise rates retroactively, even for consumers that did nothing wrong. Citi’s reform resulted in lower revenues and no new customers, triggering an embarrassing public reversal.

Citi explained sheepishly that credit cards were now so complicated that customers couldn’t tell when a company offered something a little better. So Citi went back to something a little worse. Without a watchdog in place, the big banks just keep slinging out uglier and uglier products.

With their reputations in tatters, the CEOs have decided to go on the offensive in Washington. They might have had some thoughtful suggestions for how to better shape a consumer agency. Instead, they have unleashed lobbyists who are determined to do anything to kill the consumer agency.

The latest lie is that the CFPA is “big government.” The CEOs all know that the current regulatory structure, which they support, is big government at its worst: bureaucratic, unaccountable and ineffective. Thjavascript:;e CFPA will consolidate seven separate bureaucracies, cut down on paperwork, and promote understandable consumer products. In the process, it will stabilize the industry, rebuild confidence in the securitization market, and leave more money in the pockets of families. Complaining about short, readable contracts and efforts to slim down bureaucracy only further diminishes the banks’ credibility.

This generation of Wall Street CEOs could be the ones to forfeit America’s trust. When the history of the Great Recession is written, they can be singled out as the bonus babies who were so short-sighted that they put the economy at risk and contributed to the destruction of their own companies. Or they can acknowledge how Americans’ trust has been lost and take the first steps to earn it back.

Ms. Warren is a law professor at Harvard and is currently the chair of the TARP Congressional Oversight Panel.

Please, Take this editorial and let it multiply. Email it to all your friends, Post it on your Facebook page, use Twitter or whatever kind of social media network to give Warren’s contents a larger audience. Opposition to this is going to far larger than the obvious Shadow Banks & their lobbyists , but from within the White House to the wealthy right wing olliarghs who are threatend by individuathat dare to speak out like Elizabeth Warren. Warren is already headlining on the Huffington post and here.

The usual of Investors411 will return tomorrow – I’m spending the rest of the AM spreading Warren’s message

Barr

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