Investors 411 Blog

by Barr Jozwicki
June 30, 2010

The Big Picture

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

Big Picture logo

*

The Big Picture

See OVERVIEW section of blog. There are three major economic mega trends (globalization, peak oil, spread the wealth) being impacted by “casino capitalism” where huge over leveraged, unregulated, opaque, worldwide, financial institutions are allowed to exist that privatize gains and socialize risk.

What you’re watching unfold broadly is an economic restructuring and downturn, & specifically a stock meltdown. The STRATEGY section of the blog opens with the statement – The problem in the financial sector is far far far far far bigger than first imagined. Impact of this mess is going to take years to resolve. All of this was written 1 to 3 years ago.

Globally, the economic growth rate (GDP) is declining, and it’s beginning to look like even emerging markets (China) that have benifited from globalization have begun to falter. Stocks are a bit different, they can be held up by smoke & mirrors (fear & greed)

The bottom lineThe more you have a working and growing middle class and upward mobility  the better off the country, countries or planet. The more you have hidden wealth, opaque institutions and a rising oligarch the worse off the planet.

Remember -Oligarchies can take many forms – Monopolies, Politburos, religiouous fundamentalist, corporate, military dictatorships, supposed democracies, etc. – but  the more you confine wealth/power to a few the plant suffers.

* The above photo was from an organization that promotes big picture books. The kind that my grand daughter loves. It has nothing to do with subject matter, except  the title.

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 -2.65% up
NASDQ -3.85% up
S&P 500 -3.10% up
Russell 2000 -3.99% -

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

Technicals, Fundamentals & Analysis

Mantra for week - ” Any analysis of stocks has become an analysis of what the ”Black Boxes” of  huge institutions with their high frequency trades & computer algorithms are doing.” They make up 80% of trading and right now the huge currency markets are dictating their moves.

The Dollar War

The red army (short stocks & long the dollar) had a secret group of reinforcements in hiding that emerged yesterday.

Markets got toasted in above average, increased volume as trading went beyond the Black Boxes & currency traders and investors headed for the exits. (big volume shows some long term investors jumped ship) The red army’s reinforcements

  • Dollar two day technically rally breaks out to upside of consolidation pattern (see chart)
  • Oops a math error first states China’s growth as 1.7% then revised to 0.3%. Without China you can fundamentally forget worldwide growth.
  • Delayed reaction to G20 nations saying they are going to raise taxes and cut spending a la Herbert Hover.
  • Worries about Obama stimulus running out of gas and its impact on state governments.
  • Ireland/Europe worries as FXE (ETF that tracks EURO) also breaks support level and falls a significant -0.63%.
  • Consumer confidence numbers come in worse than expected.
  • Tech leader AAPL closes below 50 DMA. Never a good side when you see the top US market general get hit.
  • Worries over monthly employment data published on Friday
  • Weak Financial Regulation reform was thown into limbo. There may not be enough votes to pass even this.

Seems like the green army (long stocks & short dollar) suffered death of a thousand cuts. The biggest cut in the short  term is China. The 41% drop in the BDI certainly predicted China and more broadly world trade was in trouble.

Market analysts will tell you that both the Dow & the benchmark S&P 500 rallied at the end of the day to finish above major support levels. (see charts at side of blog) This would be the 4th test of the 1040 low for the benchmark S&P 500. I’ve read about a double bottom & a triple bottoms, but never a quadruple bottom. Any things’s possible, but its unlikely we will stop falling here, because NASDQ is already the anchor (at new yearly low) dragging the rest of the US markets lower. = Bearish


Significant Indexes

  • McClellan Oscillator (MO) fell big time to -44.39 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. In May the MO reached two lows – one at -120 and the other close to -130. Therefore, potential for more downside risk. = NEUTRAL, but approaching oversold
  • US Dollar –  The dollar rose another yesterday +0.49% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Dollar up = stocks down and visa versa. The dollar has risen a significant +1.03% in two days and broken out to the upside of its consolidation pattern.= Bearish
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also good proxy of China) BDI is in free fall from a high@4200 to  2447 yesterday.(2482 to 2447 yesterday) This is a huge -41% drop in 6 weeks.  Often a leading indicator for stocks. Now just above a major support level (@ 150 points lower) Long term. =Bearish

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekends

Have not yet had a chance to Update over last 2 weekend but there are NO positions held at this time.

Still watching DGP (ETF that’s double long gold) for a dip close to its 50 DMA – Will buy.

Don’t plan any buying or shorting (ETF that short the market) until MO reaches overbought or oversold

Time to dust off YOUR Stock List and potential ETF candidates that are holding up better than most other stocks/sectors. When the MO gets below -60 its time to start nibbling. The lower the better. Will try to go over potential candidates tomorrow. Paul or others in the comment section might have some new suggestions/stocks that are holding up well

When panic reigns we buy. We may only get a modest rally to a lower high, (hopefully sell 1/2 into 5+% gain) but we may get a longer term rally too.

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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June 29, 2010

Fear & Reality

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

Afghan War

Karzai & Petraeus

Fear Is The Mindkiller

911 was a horrible & catastrophic event that needed a response. Since then just how many US citizens in the continental USA have died from a Muslim terrorist attack? There were a handful who died from Anthrax eight years ago, and when the Muslim army guy went berserk at Fort hood a dozen died. Total – maybe 20

So how many die each year in the USA from lightning strikes? – 90 Over the course of the last eight years(90×8) that’s 720 deaths by lightning vs. @ 20 from Islamic related terrorism within the USA.

You are 97% more likely over the last eight year to die from a lightning strike that a terrorist related event within the USA in the last 8 years. Yet we spend trillions on terrorism (consider all the TV shows, editorialists, fearmongering, wars in Iraq and Afghanistan, wounded care, etc etc etc. and nothing on lightning strikes.

Hell I’m far more scared of dying in a traffic accident, cancer, diabeties, a robbery or a lightning strike than I am of a Islamic terrorist incident.  So why spend trillions fighting on the other side of the world instead of spending that money on something useful like cancer research or deficit reduction?

Democrats in congress are blocking $3.9 billion in nation building aid to the corrupt Afghan government. Bravo!

Unfortunately apathetic and fearmongered Americans will do little to support those Democrats standing up to the US war machine and the Obama/Petraeus 3rd surge nation building plan. Nita Lowey is the chair of the budget committee that holding up this money. Give her a call and say Bravo.

Fear is the Mindkiller, and we live in world where we are manipulated into believing and spending $ as if your chances of dying from an Islamic terrorist are greater than those of dying from cancer or diabeties. Wake up to reality

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.o5% down
NASDQ -0.13% down
S&P 500 -0.20% down
Russell 2000 -0.55% -

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

Technicals, Fundamentals & Analysis

Mantra for week” Any analysis of stocks has become an analysis of what the ”Black Boxes” of  huge institutions with their high frequency trades & computer algorithms are doing.” They make up 80% of trading and right now the huge currency markets are dictating their moves.

The Dollar War

Both side backed off in the dollar war yesterday. The green army (long stocks & short the dollar) ran out of gas after Friday’s gains. The dollar went up so stocks went down. So the red army (short stocks & long the dollar) gained a little ground and time to regroup.

The war, fought by the black boxes and currency traders is over the rising 50 day moving average/support level of the dollar.

The MO is NEUTRAL. No advantage for either side. (see below)

The dollar’s gain +0.54% (see below) is a very minor comeback for the red army that got crushed Friday. The red army its held gound and made minor gains. However, a rise of 0.54% should have translated to a larger for stocks = Neutral to Slightly Bearish

The monthly jobs numbers on Friday, and earnings season’s starting (second week in July) should draw some attention away from currency war.

Significant Indexes

  • McClellan Oscillator (MO) fell to -4.41 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works.= NEUTRAL
  • US Dollar –  The dollar fell s yesterday +0.51% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Dollar up = stocks down and visa versa. The dollar has fallen for the last 3 weeks, but has consolidated (traded sideways) over the last 6 days as the 50 day moving average/support level moves higher. This is where the Black Boxes have focused their attention. Dollar at $85.71 directly above major support/ 50 DMA at $85.14. Monday’s rally = Bearish
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish) BDI is in free fall from a high@4200 to  2482 yesterday.(2501 to 2482 yesterday) This is a huge -40% drop in 6 weeks.  Often a leading indicator for stocks. Now just above a major support level (@200 points lower)Long term. = Bearish

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekends

Have not yet had a chance to Update over last 2 weekend but there arNO positions held at this time.

Still watching DGP (ETF that’s double long gold) for a dip close to its 50 DMA) – Will buy.

Don’t plan any buying or shorting (ETF that short the market) until MO reaches overbought or oversold

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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June 28, 2010

America Speaks

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

Robert Kuttner - Flickr image 3444876149.jpg

Robert Kuttner

Financial Regulations

D. In the comments sections brings up a generally favorable view of the Financial Regulations in the NYT. Here’s another glass is half full view from left wing TalkingPointsMemo. This is certainly, the most significant financial reform package in decades but it does NOT solve the major Too Big to Fail and transparency problems. Nor does it address problems within quasi government institution – Fannie and Freddie that are singlehandedly holding up the US mortgage market. That comes next.

Also much of what is legislated depends on regulators. Tea Party Patriots ‘s basically want NO regulators/regulations and the Obama administration has a far less than stellar reputation in regulators and regulations (think BP)

In a past Investors411 the Baseline Senerio revealed 4 largest shadow banks have $7.7 trillion in assets. Imagine what happens if a $2 trillion dollar over leveraged shadow bank goes down – one 5 times the size of Lehman Brothers. Simon Johnson, today, explains how JP Morgan has made itself invulnerable to financial regulation

“The reason global megabanks will get bailouts in the future is simple – policymakers will fear the chaos that would ensue when competing bankruptcy claims swarm over a defaulted institution, much as happened for Lehman (e.g., in London) in September 2008.”

The fact that Shadow Banks lead the markets higher Friday is verification that investors (those who put their money down, instead of talk) think shadow banks won.

America Speaks

America Speaks is a “bipartisan” organization that organizes American town meetings. It just had major Town Meetings across the USA on June 26th. This group was founded by a Wall Street mogul and two foundations. They “scientifically selected groups” came up with some “overwhelming” eye brow raising results.

  • Raise tax rates on corporate income and those earning more than $1 million.
  • Reduce military spending by 10 to 15 percent,
  • Create a carbon tax and a securities-transaction tax

Bob Kuttner also goes into depth on America Speaks and Jobs Jobs Jobs.


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.o9% up
NASDQ +0.27% up
S&P 500 +0.29% up
Russell 2000 +1.89% -

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

Technicals, Fundamentals & Analysis

Mantra for week - ” Any analysis of stocks has become an analysis of what the “Black Boxes” of  huge institutions with their high frequency trades & computer algorithms are doing.” They make up 80% of trading and right now the huge currency markets are dictating their moves.

The Upcoming Battle-

Friday’s Investors411 Outlined the sides in the Upcoming Battle. Stock Market /Currency Trading War Broke Out Friday. Major US markets had  an above average big, increased volume day - so both sides committed lots of troops (buyers and sellers) to the fight. There was lots of blood

The green army (long stocks & short the dollar) launched the first attack – led by Shadow Banks GS & JPM (the whole banking sector rose almost 3%) The dollar took it on the chin and is now sitting a mere $0.24 away from its rising front line/support level.

The red army (short stocks & long the dollar) got caught a little off guard, because so many technical analysts predicted the downfall of stocks. Despite being beat back as the dollar fall (see below) and stocks pushed marginally higher the red army support levels have held.

The MO is NEUTRAL. The BDI has turned flat So No advantage for either side here. In fact BDI’s possible turn slight advantage to greens

For fundamentals details of last week and this week see Jeff Miller in Seeking Alpha or on Friday’s monthly jobs report ( the big news of the week) and another outlook by SA’s Ophir Chandor

Fearless Forecast for the Week

Just about every technical analyst out there is bearish for stocks. However if bulls (the green army) can build Monday on Friday’s modest gains in big volume then they have a shot at moving markets higher. Last week too started out with China announcing a currency devaluation, only to learn that this was no wher near as substantive as first though.

The Shadow Banks victory in financial reform should help bulls.

Housing figures are in shambles. Investors411 mantra over the last two years has been the economic worldwide situation created by the US Shadow banking 2008 meltdown is “far far far far” worse than expected. Logic says that Friday’s employment numbers will be worse than expected. Bears should growl.

The Shadow Banks have reinforced the bulls and if they can get a follow through rally today this could help stocks for the week.

The key again is the US Dollar/EURO relationship. UUP (ETF that tracks the dollar) is the key to watch. Since there are so many expecting markets to tumble, if the Dollar breaks through support you could see a sharp rally as Black Box investors “buy to cover their short positions.”

Happy to be on sidelines for this war. Best read of tea leaves is a contrarian up/flat week into lackluster jobless figures.

Today is day 2  of the dollar falling to a key support level war. Day 1 was dominated by the green army.

Significant Indexes

  • McClellan Oscillator (MO) rose significantly to -1.34 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works.= NEUTRAL
  • US Dollar –  The dollar fell s yesterday -0.57% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Dollar up = stocks down and visa versa. The dollar has fallen for the last 3 weeks, but has consolidated (traded sideways) over the last 6 days as the 50 day moving average/support level moves higher. This is where the Black Boxes have focused their attention. Dollar at $85.28 directly above major support/ 50 DMA at $85.04. Friday’s drop = Bullish
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped. BDI is in free fall from @4200 to  2501 yesterday. This is a huge -40% drop in 6 weeks.  Often a leading indicator for stocks. Now at/just above a major support level. Rate of fall declined again yesterday. This index often makes slow changes, so diminished decline  could be the start of a reversal. However, clearly long term. (decline from 2502 to 2501 is smallest possible)  = Long Term Bearish Short term Bullish

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekends

Have not yet had a chance to Update over last 2 weekend but there are NO positions held at this time.

Still watching DGP (ETF that’s double long gold) for a dip close to its 50 DMA) – Will buy.

Don’t plan any buying or shorting (ETF that short the market) until MO reaches overbought or oversold

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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June 25, 2010

A Very Angry President

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

-

“A Very Angry President”

One thing American’s seemed to have made clear – they want an angry man in the White House. Standing up to BP and General McCrystal is the mojo American’s want.

Josh Green from the Atlantic and the Boston Globe, goes into depth on the Obama Presidency. It’s substantive, different and an interesting editorial.

Financial Regulations Finished

Breaking News this AM is congress has finished its work on the FinReg Bill. Here’s the WSJ on the major provisions within the bill. There are lots of knowledgeable people skeptical of this statement but FDIC chair Sheila Bair says, “This will end Too Big to Fail.”

Perhaps the best judgment of how effective this is what happens to the shadow banks stocks – GS, BAC, C, JPM etc. How to judge if Wall Street or Main Street won Will you continue to socialize risk while the shadows privatize the gains? -A major decline in these shadow bank stocks means too big to fail worked.

Afghanistan and Beyond

Both Mama Jama and Jim J came up with some very interesting points on Afghanistan/Iraq//Middle East yesterday.

  • The Israeli’s have tried all sorts of different means over the last 5 decades to change the Mid East. They failed – why should the US succeed?
  • If some sort of democracy establishes itself in Iraq, to will be confrontational to the USA like Turkey’s democracy now is to Israel
  • If Egypt were to change to a democracy tomorrow, that democracy would be far more hostile to both Israel & the USA.
  • Would add that the only “seemingly” pro western Muslim governments like Dubai & Kuwait are dictatorships.

Why keep pouring $ down a sink hole that grows our deficit and divides our nation.

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 -1.41% up
NASDQ -1.63% up
S&P 500 -1.68% up
Russell 2000 -1.72% -

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

Technicals, Fundamentals & Analysis

Repeat - ” Any analysis of stocks has become an analysis of what the “Black Boxes” of  huge institutions with their high frequency trades & computer algorithms are doing.” They comprise 80% of trading and right now the huge currency markets are dictating their moves.

The upcoming battle - Check out the chart of the dollar below. The dollar has stated to move sideways after a three week fall. The major support level/50 day moving average is rising @$0.15 each day and now within $0.80 of the dollar.  The fact that the dollar has stopped falling in front of strong (rising) support level has spooked currency traders. The 6 day consolidation of the $USD means its lost some downward momentum that was lifting stocks.

The falling dollar rising stock army (green) has charged the enemy (the 3 week drop which rallied stocks) Technically, the rising dollar falling stock army (red) has built its technical defense on the 50 Day Moving Average. The green army, having seen the strength of red army forces is now moving sideways hoping to find some hole in the red army lines.

Perhaps some kind of fundamental news (like the European economy is better than thought)to shift the balance and the green army will then find a hole and break through the red army’s barricade/50DMA support level. However right now the sideways movement (consolidation) shows a weakness in the green army

The red army’s 50 DMA is steadily advancing. Yesterday whole bunch of the green army cut and ran and stocks declined in moderate volume. The bottom line for stocksBEARISH

One hope for the green army is that the conditions become so oversold in stocks that they can mount another charge. We’ve gone from +80 on the MO to @-30. (see below)

Significant Indexes

  • McClellan Oscillator (MO) fell significantly to -28.91 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO worksNEUTRAL
  • US Dollar –  The dollar fell slightly yesterday -0.04% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Dollar up = stocks down and visa versa. The dollar has fallen for the last 3 weeks, but has consolidated (traded sideways) over the last 6 days as the 50 day moving average/support level moves higher. This is where the Black Boxes have focused their attention. Bearish
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped. BDI is in free fall from @4200 to  2502 yesterday. This is a huge -40% drop in 5+ weeks.  Often a leading indicator for stocks. Now at/just above a major support level. Rate of fall declined again yesterday. This index often makes slow changes, so diminished decline  could be the start of a reversal. However, clearly long term  = Bearish

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekends

Have not yet had a chance to Update over last weekend but there are NO positions held at this time.

Dust off  YOUR stock List and ETF’s. Check out Paul R and others worthy suggestions in the comments section throughout the day. Which stocks/sectors have been holding up the best?

The MO has gone from @+80 to -30 and sure looks like momentum will carry us to to -60 and beyond. When US equities get oversold (-60 on the MO) the odds of at least a short term rally, especially in sectors or stocks that are outperforming, are in your favor.

Still watching DGP (ETF that’s double long gold) for a dip close to its 50 DMA) – Will buy.

We are on the cusp of change again for stock’s long term outlook. Technical aspects for stocks are bearish and it looks like the currency market is turning bearish for stocks. (see above) The fundamentals or the outlook of companies in earnings season (two weeks away) will ultimately determine the direction. Even the Black Boxes will notice. But, for now downgrading to CAUTIOUSLY BEARISH.

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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June 24, 2010

Iraq/Afghan Quicksand

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

President Obama and Gen. David Petraeus walk out of the Oval Office. Petraeus will replace Gen. Stanley McChrystal as top U.S. commander in Afghanistan.

The Dynamic Duo – Petraeus & Bush or is that Obama?

The Afghanistan Quicksand

Please tell Tea Party Patriots the three single largest reasons the deficit has grown over the last decade are

  • The 2008 meltdown and consequential bailout/stimulus.
  • The Bush tax cuts
  • The Iraq/Afghanistan war spending and consequences.

General McChrystal yesterday became the fall guy for the failed surge stratagey in Afghanistan. In effect his insubordination was like taking a hit for the military industrial complex. The new chief in Afghanistan is General Petraeus. Petraeus/Bush planned the first troop surge in Afghanistan. Petraeus/Obama surges two and three.  All have failed But American media is dares not state this reality.

Remember when American media was falling all over itself because American caualties were down due to a surge in Iraq? Now that casualties are up with the 3rd Afghan surge you hear almost nothing. Interesting!?

OK Obama looks tougher because McChrystal got canned. Big deal. Has this changed anything? Pehaps - Petraeus and Obama get to dump blame for their failed Afghan policy on McChrystal. The military Industrial complex grows stronger as does the call for more violence (deficit spending) as the solution.

Informed Comment blog by Professor Cole paint a picture of today’s Iraq (where less American’s are dying) as a failed state with @ 4 million refugee’s, a hung government,(elections were last winter) and an ongoing Shia/Sunni civil war killing at least 300 people per month.

Your deficit dollars continued to be poured into both sink holes.

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 +0.05% up
NASDQ -0.33% flat
S&P 500 -0.36% up
Russell 2000 -1.66% -

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

Technicals, Fundamentals & Analysis

Repeat – ” Any analysis of stocks has become an analysis of what the “Black Boxes” of  huge institutions with their high frequency trades & computer algorithms are doing.”

The new homes data for last month was much worse than expected. Worst fall in 4 decades - 33% Everyone expected bad numbers because stimulus was withdrawn, but the news drove the Dow over 100 points near the open. The fact that stocks recovered to slight losses in , of course light volume, is Bullish

Technically the fact that stocks held onto Tuesday’s more significant losses is Bearish

The Fed announcement was nothing new – Interest rates are going to stay between o & o.25% for a long time & Europe has hurt things here.

The dollar started out the day higher and fell. This is what the Black Boxes saw and the reason stocks moved higher throughout the day. Right now, the Black Boxes have focued with lazar like intensity on currency fluctuations.

Significant Indexes

  • McClellan Oscillator (MO) fell a smidge to -2.25 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works.NEUTRAL
  • US Dollar –  The dollar fell yesterday -0.30% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Dollar up = stocks down and visa versa. The one day the trend = Bullish
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped. BDI is in free fall from @4200 to  2515 yesterday. This is a huge -39% drop in 5+ weeks.  Often a leading indicator for stocks. Now at/just above a major support level. Rate of fall declined again yesterday. This index often makes slow changes, so diminished decline (@40% less) could be the start of a reversal. However, clearly long term  = Bearish

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekend

Have not yet had a chance to Update over last weekend but there are NO positions held at this time

From Yesterday – “DGP is ETF that is double long gold. Investors411 plans to buy the dip in this ETF.”

Big Black Storm Clouds - Every major stock indexes 50 day moving average is heading lower. Right now it would take a pretty massive rally to change that direction. Every “Old School” technical interpretation of this is  Bearish.

However, Currency markets are the dog that’s wagging the stock market tail. If the dollar falls stocks will rise. Black Box traders control what’s happening not “old school” analysis, so for now the long term outlook for US stocks is still NEUTRAL

CAUTIONAt some point the Black Boxes are going to stop looking at the economic relativity between Europe and the USA. Unfortunately, when this happens the realization they come to may be the USA is growing weaker too, just not as fast as Europe.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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June 23, 2010

Killing America’s Soul

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

What in a mirror? A vase, A slave, Your soul?

Wall Street Killing America’s Soul

Paul R has referenced an excellent piece by Paul B Farrell in the comments section of the blog. It’s exactly what Yankee Bob talks about (again in comments section) when he states-

No matter how small or logically challenged the Tea Partiers are they are invaluable to Corporate Capitalism. [I call it "casino capitalism"] It gives the major players and shakers a human face to spread their poisonous agenda . It’s like interviewing a slave that believes they are being well treated by their master so why don’t you become one too.

You should check out Farrell’s entire editorial, but let’s look at the “hyperspeed, toxic irrationality… of Wall Street (“Corporate capitalism” or “casino capitalism”). Farrell from Market Watch –

  • All Wall Street bankers are worth 100 times any Main Street investor
  • All Corporate American CEOs deserve to make 400 times their workers
  • All children of all Forbes 400 billionaires deserve to inherit tax-free
  • All lobbyists deserve millions when winning billions for special interests
  • All taxpayers should pay for catastrophic mistakes of Wall Street Fat Cats
  • All rich hedge fund managers deserve to be taxed at capital gains rates
  • All senators deserve to become millionaire lobbyists when they retire
  • And Goldman Sachs CEO Lloyd Blankfein deserves a $100 million bonus

This is the reality we live in – A reality that creates the deficits that John S, Me and even the TTP’s are outraged over. Yankee Bob understands that so many perhaps unaware slaves (the TTP’s) to the system that privatizes gains, socializes losses & creates deficits. Jim J. rightly concludes that we don’t want “less government,” but “Effective Government.”

Bottom Line – What will you do? Just keep staring in the mirror or take action.

The General & The President

Headline news around the US is about the Rolling Stone article The Runaway General. Will General McChrystal get fired or hand in his resignation for insubordinate remarks (he’s apologized) he and his staff made about Obama and his administration.  Tom Friedman’s view

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 -1.43% flat
NASDQ -1.19% flat
S&P 500 -1.61% up
Russell 2000 -2.14% -

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

Technicals, Fundamentals & Analysis

Analysis of stocks has become an analysis of what the “Black Boxes“,of  huge institutions with their high frequency trades & computer algorithms are doing. Their focus ,now, is on the huge currency trading markets.

Fed makes interest rates announcement today.

YOUR Questions

From private emails and public comments lets go over four aspects-

  • The BDI – I brought back the BDI Index because it was reaching a critical mass. This measurement of world trade had fallen so far and is close to a major support level that the fundamentals (trade) factors it represent were too big for even the Black Boxes to ignore.
  • The MO – It’s not a magic bullet. But it does show you when the odds are in your favor to make a trade. There are many similar Indexes, but this one was chosen because it does NOT use stock volume. Volume has become less relevant because the “Black Box Computers” have taken over trading.
  • This is NOT your parents buy and hold market. The USA shadow financial corporations are running an opaque unregulated banking system. We have a congress and & administration that is unable or unwilling to balance the system so YOU have the same advantages as (as Yankee Bob would put it) your corporate masters.
  • Because of point 3, everything is more opaque & more volatile. Emotionalism, fear, and irrationality make owning most stocks far more risky than in the past. Example, Right now the BDI besides loosing 40% is close to breaking down. A breakdown here greatly increases the chances of a second major recession on top of the first.

Significant Indexes

  • McClellan Oscillator (MO) fell significantly to +1.01 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. NEUTRAL
  • US Dollar –  The dollar rose yesterday +0.13% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Dollar up = stocks down and visa versa. This was the first two up days in a row for the last 13 sessions. Yesterday confirmed the previous days more significant move. For stocks =Bearish
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped. BDI is in free fall from @4200 to  2547 yesterday. This is a huge -39% drop in 5+ weeks.  Often a leading indicator for stocks. Now at/ just above a support level. Rate of fall declined yesterday. This index often makes slow changes, so diminished decline (@40% less) could be the start of a reversal. However, clearly long term  = Bearish

Reading the Tea Leaves-

Apple computer seems to be single handedly keeping this market afloat. It’s one of the stocks on YOUR Stock List. However, emerging markets especially China is still the key to worldwide growth.

The mantra continues to be watch FXE (EURO currency ETF) and UUP (US currency ETF)

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekend

Have not yet had a chance to Update over last weekend but there are NO positions held at this time

DGP is ETF that is double long gold. Investors411 plans to buy the dip in this ETF.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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June 22, 2010

Something Wicked This Way Comes

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

The list of photos above on financial reform was from Dylan Ratigan’s MSNBC show. Obviously you can add to list.

Financial Reform DOA

Simon Johnson and the folks at the Baseline Senerio have thrown in the towel on financial reform. Virtually every Republican caved into the shadow banks lobbyist, but the real disappointment - so did Obama, Geithner and Summers and many Democrats. It’s disheartening to read that the Obama administration helped kill Kaufmann/Brown legislation and other substantive reforms.

There may be a few crumbs that the shadow financials have lost, but opaque casino capitalism where your FDIC dollar in banks insures their trading of highly leveraged derivatives will thrive – Privatizing gains and  socalizing losses continues. Shadow financials, obviously would rather trade derivatives than make less lucrative transparent loans to homeowners and buisnesses.

The shadows of over leveraged, opaque, Casino capitalism will thrive in the coutry that is/was the leader of the free world. For the future, let’s borrow a line from Shakespeare’s Macbeth- Something wicked this way comes

Tea Party Patriots and Deficits

Deficits are bad. No question. Building a future on growing debt if you own 50% of the worlds weapons leads to one of 2 things – You bankrupt the future, or you kill your debtors. I suppose you could find a third way where you hold a gun to the head of a debtor, but after a while somebody’s going to kill somebody. – Again – Something wicked this way comes

However,  Before you worry about your debt you have to worry about the soundness of your financial system and keep it from collapsing.

  • Fixing financial problems and giving us a fundamental transparent capitalism would enable real transparent, democratic, economic, growth.(see above)
  • Increasing debt to keep our financial system (even though it was/is a shadow system) from collapsing and creating a second great worldwide depression was more critical

This is what TPP’s can’t understand. We’ve prevented a worldwide economic meltdown, but we haven’t fixed the system. These two priorities are the foundation of economic growth and therefore supersede deficits.

You want to cut military spending, put a means test on social security/medicare, raise taxes to what they were under Reagan – great. It will cut deficits.

However cutting the National Endowment for the Arts, cutting funding for some pork project, screaming drill baby drill is NOT going to decrease the $13 trillion deficit in any substantive way.

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 -0.08% down
NASDQ -0.90% down
S&P 500 -0.39% down
Russell 2000 -1.03% -

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

Technicals, Fundamentals & Analysis

The news that China was devaluing its currency announced over the weekend got sharply tempered. As uncertainty over the China move grew, so did the dollar and the algorithms used by the “black boxes” that control 80% of stock trading kicked in and sold stocks. A triple digit Dow gain faded into a loss = Bearish

This is hardly the first time the Chinese and economists have sharply tempered a government statement about devaluing currency. Let’s take that feather (for now) from Obama’s/Geithners cap and wait to see what happens as the G 20 nations meet.  This also toasts the Fearless Forecast for this weeks trading.

The reversal in the dollar (See below) could mean an overall change in market outlook, especially if the dollar moves higher again today. Today would be confirmation day of the dollars move higher yesterday.. Right now the major institutions  that run the markets have set their stock market algorithms to currency fluctuations.

FXE – The ETF that tracks the Euro sure looks like its starting to turn and head lower.

Bottom Line – The one way to put the odds in YOUR favor that has a reasonable chance at success in stocstoks/ETF’s is to use the MO. The higher it goes the more you sell, the lower it goes the more you buy. Obviously NOT a hard an fast rule, but a good general guide. Currently, as explained above, currency fluctuations are dominating trading.

Significant Indexes

  • McClellan Oscillator (MO)fell to +35.08 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. Clearly more overbought than oversold, but has pulled back from overbought levels.
  • US Dollar –  The dollar rose yesterday +0.43% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Dollar up = stocks down and visa versa. Yesterday – “The dollar seems destine to fall to its 50 day moving average which is $1.06 lower and rising.” The dollar fell to within 0.39 of its 50DMA to $85.01 then rallied a significant +0.94%..  This was the largest gain in the dollar in 11 trading session. For stocks = Bearish
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped is in free fall from @4200 to @ 2600 yesterday. This is a huge -38% drop in  Often a leading indicator for stocks. Now at/ just above a support level. Clearly long term  = Bearish

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekend

Have not yet had a chance to Update over last weekend.

ETF to watch today is the China ETF - FXIup +3.48% yesterday. The stock from Your Sock List is China’s BIDU

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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June 21, 2010

Tea Party Patriots

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

Apologies to some of you who are trying to post comments as “guests” – It’s NOT working and  only “registered users” are able to make comments. Trying to work this out.

Tea Party Patriots

Reality is that Tea Party Patriots and like groups are a major force in the USA and many of YOU have commented on their right wing radicalism, racism, and rage. NYT’s Frank Rich & Talking Points Memo . The TPP hero’s have taking some truly radical views defending BP.

  • Rand Paul defending BP wanting Obama to leave them alone.
  • Joe Barton (Republican chair of energy committee in congress) calling the $20 billion Obama got from BP a “shakedown.” He later apologized.
  • IBD (Investors Business Daily - “Rallied to  his(Barton’s) support.”), Rush Limbaugh (“the $20 billion would go to ACORN”) Republican Study Committee = “A Chicago style Shakedown.”

To the TPP’s everything is the fault of a big monster government. So much so that they would rather see YOU pay for BP disaster.

Just what is does our government do – Primarily writes checks to seniors (social security & medicare) and fight wars. (65% of federal budget and growing) Just who elected our democratic government  (20 of the last 30 years Republican Presidents)we did. Yet the TTP’s rage against government they elected as the source of their problems  - You self indulgent, arrogant  IDIOTSthe problems we have are our own making -our own fault. Take responsibility.

TPP’s are all wrapped up in sensationalism from Palin’s “drill baby drill,” to their “don’t tread in me” banner. When the TPP’s heros take a position on BP you find out just how dangerous they would be. Do NOT ignore these people.

China Revaluation

Stocks all over the world are up on news that China is loosing currency restrictions. This avoids or lessens the tensions a potential trade war with the USA. It’s a long sought goal of US foreign relations and a feather in Geithner/Obama’s cap.

If you combine this with Obama getting $20 billion from BP you could say he’s having a good week. (more on tis below)

However, no matter on how tough Obama got with China & BP his lack of support for substantive regulatory reform on the too big to fail shadow banks is a major disappointment

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 +0.16% up
NASDQ +0.11% up
S&P 500 +0.13% up
Russell 2000 +0.16% -

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

Technicals, Fundamentals & Analysis

Friday was one of the most boring options expiration days ever. Usually a Quadruple witching day/options expiring means a HUGE amount of trades and a volatile market.

BIG story over weekend is China Yuan/currency has moved to a 21 month high. Bush & Obama have been pushing the Chinese to deleverage their currency from the dollar.  Looks like Obama, time & a win win situation finally moved the Chinese. Since the “Black Boxes”(see Thursday’s update) that make up 80% of the trading are fixated on a falling dollar this is going to give bulls a shot of adrenaline today = BULLISH

BDI in freefall. At some point the Black Boxes (Huge computers of Huge institutions that make up 80% of all trades) are going to notice the BDI whichis a proxy for world trade. World trade is Slowing and the  first impacted are highest exporters like China, Germany, etc.= Bearish

Fearless Forecast Last Week = “Rally Ho” We held onto gains made early in week.

Fearless Forecast This Week = Rally Ho Again – China news is extremely bullish and this surprise should boost markets above +80 on the MO scale. Conditions should be getting very oversold by the later 1/2 of week. So expect the rally to dip or flatten then.

The China news is a significant positive surprise. After years of just talking the Obama administration has got China to move. Unfortunately the news has caught us with just a small stake in equities, so we’ll miss out on what should be a big jump this AM in equities.

Significant Indexes

  • McClellan Oscillator fell to +50.47 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. Just below overbought territory = moderately overbought = moderately bearish
  • US Dollar –  The dollar continued its fall Friday -0.10% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. The dollar seems destine to fall to its 50 day moving average which is $1.06 lower and rising. = Bullish
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped is in free fall from @ 4200 to @ 2700 Friday. The China news could impact this index today Often a lagging indicator, but clearly long term  = Bearish

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekend

Have not yet had a chance to Update over weekend.

High beta stocks (See YOUR watch list) and high beta ETF’s (see past Investors411) going to do well early this week on China news. Could be a good short term buy the dip play here. Be careful that your choice is NOT too overextended from/above its 50 Day moving average.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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June 17, 2010

Bravo Barack & Black Boxes

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

Obama Oil Spill Speech

-

Bravo Barack

Obama finally hit one out of the park yesterday. Let’s not damn him with faint praise  like America’s media or try to politically toast him for everything he does like the far right, but this time say Amazing, Well Done and Bravo Barak.

  • Obama got a $20 billion dollar Trust fund from BP for folks impacted by the BP volcano of oil.
  • Obama got BP to suspend their dividend for a year — the money goes to those impacted not shareholders.
  • Obama got a NO cap agreement on the $20 billion
  • This is especially significant because just a few weeks ago congress could NOT pass a plan for a $10 billion dollar fund. Something many congress people should be ashamed of.
  • Obama got BP to pay $100 million for idled workers.
  • Obama got, Kenneth Feinburg (oversaw 911 victims) to head independent agency to administer claims

Has an American President ever got $20 Billion from one of the biggest companies in the world? NEVERThis should be the headline of every major paper in the USA – but it isn’t. It is the lead editorial in NYT.

Black Boxes (see below)

NB –  Last Investors411 for week

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 +0.05% down
NASDQ +0.00% down
S&P 500 -0.06% down
Russell 2000 -0.39% -

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

Technicals, Fundamentals & Analysis

Markets were mixed in surprisingly light volume – This Friday is one of those days all kinds of options expire. Translation there should be a lot of trading.

FXE – The ETF that tracks the EURO fell -0.36% in very heavy trading. The amount of decline is not very significant, but the heavy trading is. Perhaps a reversal of the week+ long EURO rally is happening.

“Black” Boxes

Jim Cramer, host of Financial Channels “Mad Money show, last night called them “Black Boxes” I’ve called them the “Mega Sharks” and “HUGE institutions/hedge funds” that dominate trading. Cramer stated that 4 years ago they made up 30% of the trading, now these entities with their giant computers make up 80% of the trades on the US stock exchanges.

These Black Box traders are another form of casino capitalism-in other words – they rig the game so that YOU loose and they win. Some examples

  • High Frequency trading – Their ultra fast trades caused the major 800 point Dow meltdown in stocks a few weeks back. Now 10% curbs have been put in, but both Debolt and the Washington Post stocks were hit with 10% dips this week. Translation – their high speed computers that run on algorithms are in and out of a stock/sector/country’s currency before  you even begin to type in your trade.
  • Imagine you are trading SNDK. A stock that has and is doing very well right now. Black Box computers can instantly pick up any news on the company from media outlets to probably the amount of facebook, google or twitter traffic on SNDK and the team monitoring those black boxes can act accordingly.
  • They can manipulate to a significant degree a stock, sector, ETF that is close to an important technical level. One way is pumping and dumping. They pump something up, other suckers join in, then they dump it.

They rule and they run the rule book. In other words what used to work like volume confirming a price move seems no longer to apply.  The game has changed and the 20% of us that are not Black Box traders are their easiest targets. Sometimes they go up against each other and sometime they work together. In the long run fundamentals (earnings, company growth, profits, etc.) do move markets. However the Black Box traders that dominate markets can do a lot of damage/manipulation before fundamentals kick in.

Right now the Black Boxes are obsessed with the Dollar/Euro relationship. That’s where the money and the action is – the giant currency markets.

It was surprising to see Cramer, who is basically a market cheerleader, speak out against Black Box trading. He recommened supporting one of the champions of Investors411 – Senator Ted Kaufman. Here’s Kaufman on casino capitalism and black box trading

Bottom Line – Many people no longer invest in stocks. This is evident from the lack of volume. Black Box trading is one of the factors in out casino capitalist system that rewards the few at the top and the rest of socialize their risk.

About the best I can do is follow the tracks of the black boxes and make trades accordingly. Right now their obsessed with currency trading. Until casino capitalism is repaired investing for the long term (years) is more difficult.

Significant Indexes

  • McClellan Oscillator fell to +60.11 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. Just into Oversold territory = Bearish
  • US Dollar –  The dollar rose +0.30% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important.

Reading The Tea Leaves -

The high volume turn around in the FXE (see above) & the oversold condition of stocks (MO) indicates the likelihood of a short term reversal of trend in the EURO. However, major reversals usually happen at support levels and the dollar & the EURO are still a ways away from its 50 day moving average. And one day’s trading in currencies is ardly an indication of a reversal, only the possibility of one. So lets go with moderate upside that gets us back to @+80 on the MO.

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekend

Out of all stock positions.

Out for the rest of the week – Back Monday

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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June 16, 2010

Obama’s Speech

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

Obama

Obama’s Speech

Here’s today’s lead editorial in NYT Obama needs to  “follow through — with more energy and dedication than they have shown so far.” The NYT was one of the best reviews I saw others were a lot harsher. Bluntly – great speech, but where’s the beef?

The rock and the hard place – So far BP’s stock has lost @50% of its value. You push these SOB’s too far too fast and the company disintegrates leaving the taxpayers to pick up the bill.

America’s Debt

Who is the biggest holder of America’s $13 trillion dollar national debt? Hint they hold over $5.2 trillion of it. Slide presentation on Huffington Post was a big surprise to me. The 15 biggest holders of US debt-Link here

Who holds 40% of the national debt and what does that mean?

Tea Party

Tonight at 7:00 PM EST Chris Matthew’s will have a documentary “The Rise of the New Right” on MSNBC. I suggest that you watch it on line or see it live.


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 +2.10% up
NASDQ +2.76% up
S&P 500 +2.35% up
Russell 2000 +2.53% -

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

Technicals, Fundamentals & Analysis

Another low volume major move for US indexes that crushed significant resistance levels for several of the major indexes = Bullish.

As stated before, volume has NOT been a factor in trading for many many moons.

From yesterday – “FXE (tracks the EURO) is the ETF to watch along with Spain’s EWP”  FXE was up a very significant +0.97% & Spain was up @ +5.75% along with Italy. Spain and Italy are the two largest of the European PIIGS + Hungary nations that are having debt problems.

The MO has reached Overbought territory = Bearish

The Baltic Dry Index BDI kept falling – It’s dropped well over 25% of its value in the last month. Since the BDI measures shipping rates this fall is NOT good for world trade, economics. The BDI is often a lagging indicator,. For stocks = Bearish

Significant Indexes

  • McClellan Oscillator rose dramatically to +79.56 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. You have to go back to March of 2009 to find a higher MO. Clearly  Oversold = Bearish
  • US Dollar –  The dollar again fell significantly -0.82% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important.For stocks = Bullish

Reading the Tea Leaves - The HUGE institutions that control 80% of the market ran wild yesterday. Their black box computers all gave a buy signal in front of what’s called a “quadruple witching day” on Friday – This means lots of options expire so there’s usually lots of volatility and trading. Except few outside the Mega Sharks (huge institutions) are investing or trading- so volume has dried up but not volatility.

The Mega Sharks seemed to have decided that Europe is going to be OK & will rally like the US did when Obama took office and the Fed flooded our shadow banks with $$$$. Back then the MO pushed up over +100 and stayed above +20 for 2 months as stock continued to rally.(see chart) Its now at +80.

A similar situation with the EURO could be happening. Don’t let American self centerdcenternessness get in the way – Europe total GDP is slightly larger than ours. We had another day where treasury auctions in Spain & Ireland went well. Just like they have had in the USA for over a year. Therefore, what happens there matters.

Even though we are now clearly oversold, we could see a sustained rally (couple months) develop. The dark cloud in all of this is the falling BDI.

Personally, what’s happening fundamentally does not justify, the rally. It’s Irrational, especially with falling trade (BDI). But mega giant sharks/institutions control this market and what anyone thinks outside their giant computers is irrelevant. The mega sharks control of stocks are a quantum shift from old trading patterns and rules. (best examples – volume is irrelevant & huge volatility in currency markets)

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekend

Sold 1/2 of UUP (ETF tracks dollar) for small loss at 25.08 -2% Will probably sell rest today

Sold VCI at 38.00 for +15%

Traders+80 on the MO is the signal to sell what remains or short any rally.  See Positions section for some ideas.

Investors – Some of YOU commented (see comments section of blog) that you sold into the rally. Good idea. I’d sell into a rally today also.  No one went broke taking profits. When the MO dips down to @+30 you can nibble.

From Yesterday – “Not the technical breakout we were hoping for. Let’s wait till the resistance level actually falls to change the outlook. Maybe today .” The technical levels fell and the long term outlook = NEUTRAL

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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