Investors 411 Blog

by Barr Jozwicki
July 28, 2010

The 2nd Great Depression

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

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No Repeat Depression

Two highly respected Economist have completed  a major study saying, “A Second Great Depression was averted” for the following reasons. Quote -

  • the Wall Street bailout,
  • the bank stress tests,
  • the emergency lending and asset purchases by the Federal Reserve
  • the Obama administration’s fiscal stimulus program

Without this GDP would be 6.5% lower this year and there would be 8,500,00o fewer jobs.

Most economists usual use cautious approaches in quantitative models. They forget – the panic of  banks collapsing, fed by an over hyping media would have cause a far more serious problem.

Investors411 and many of you have been beating the drums on this for 2 years, and its good finally to see a major study come out. Especially one that supports our thesis. Now besides Greenspan, Paulson, Bernanke, Geithner , etc., telling us we would have gone over the cliff, we have some academic support.

Alan Binder Princeton Prof. & former Vice Chair of Fed

Mark Zandi – Chief economist Moody’s Analytic

Smoking Hot Debate

If you’ve missed the comments section of Investors411 you’ve missed the some of the best thing this blog offers – Information and debate on stocks & politics. Right now Jsovjani & Popeye are going toe to toe. Hard to tell if they agree or agree to disagree.

Jsovjani has produced a set of statistics that show the concentration of wealth before Ronald Reagan took office of the richest 1% of Americans was @ 20% and when he left office it was @ 36%. Popeye believes that he has finally found some common ground with Jsovjani our resident “deficit hawk.” The rich getting richer coupled with the fact that President Reagan raised the deficit by over 400% makes “Ronald Reagan, economically one of the worst presidents we ever had.”

What will Jsovjani reply?

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 +0.12% up
NASDQ -0.36% down
S&P 500 -0.10% up
Russell 2000 -0.46% -

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

Mantra for week -The Black Box/High Frequency Traders BB/HFT control the vast majority of trades.

Another typical light volume day which saw rotation (a bullish thing) out of high beta stocks into more mundane stocks. Overall things were flat.

There was one big bearish sign out there - crude oil – took a big hit right at its resistance level.

Earning continue.

Significant Indexes-

  • McClellan Oscillator (MO) fell  to +75.69 [+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. Yesterday’s close = 75.69BEARISH But, the MO fell 21+ points and major indexes were flat. Plus its 50 DMA is crossing its 200DMA, and the chart shows a series of higher lows and higher highs. Best read of tea leaves is we are now looking like the MO will drop more on flat days and get us out of overbought territory. Then rally as stocks go higher.
  • US Dollar –  The dollar  rose slightly  +0.12% yesterday [Anything over +/- @0.50 is significant.] The dollar/stocks relationship is strong – Dollar up = stocks down and visa versa. Dollar just broke a major downside support level two days ago = Bullish
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also, good proxy of China.) BDI was in free fall from a high of @4200 to 1700 . This was a huge -60% drop in 8 weeks is very bearish Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI has staged a 7 day+10% rally and is at 1869 = Bullish

Reading Tea Leaves-

The highly overbought position of US equities eased yesterday. We are just overbought now. See MO above. Another day/two of easing will give the bulls another chance to charge. There is so much bullish momentum behind the move higher, its hard to see it all stop now. At least retail investors should buy the dip. If we continue to fall out of overbought positions with stocks remaining flat – This would be a signal to go long.

However, Black Box/High Frequency Traders rule, and they may think its time to take profits from this rally. If you’re a trader what to look for (probably on the SPX daily chart) is that every time the SPX rises to a certain level it gets sold into by BB/HFT’s

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Updated over weekends Investors411 holds ONE small position in SDS at this time

Sticking with overall strategy on short ETF’s. However, Probably selling 1/2 of SDS today. Reasons stated above under MO.

EWZ (Brazil – chart on side of blog)) an ETF Investors411 owned for years is again outperforming and is a buy the dip opportunity.

GLD – (Gold) has come down off its high. But a big dip in big/above average volume is a signal to wait.

Going to try to put together YOUR Stock List with Paul R (if he has the time) before I leave for trip.

S&P 500 at 1113. Breakout point to turn Long Term Outlook to CAUTIOUSLY BULLISH is 1131

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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July 27, 2010

They Killed the Beaver

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

The Cleaver Family from 60′s sitcom Leave it to Beaver.

RIP – Middle Class America

The middle class in America is being systematically wiped out of existence in America by Americas growing wealth oligarchy. Say good bye to The Beaver

Editorial is from Business Insider features 22 statistics showing America Middle Class is headed toward oblivion. This is documented & substantiated evidence that the middle class is being wiped out by the rich oligarchy in the USA. Many many thanks to Robert H for finding this article.  Here’s just a few of those stats –

  • 83% of all US stocks are in the hands of 1 percent of the people.
  • 66% of the income growth in the USA went to the top 1% of Americans from 2001 to 2007
  • 36% of Americans contribute nothing to retirement
  • 61% of Americans live mostly paycheck to paycheck in 2009 vs 43% in 2007.
  • Bottom 50%of Americans own less than 1% of nations wealth.
  • 40% of Americans are employed in low pay  service jobs.
  • Competition China garment worker makes 82 cents an hr. Cambodia 22 cents an hr.
  • 35.4 is the ave. amount of weeks it takes to find a new job.

The list goes on & on, but you get the picture. Send this to your friends

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% down
NASDQ +1.19% down
S&P 500 +1.16% down
Russell 2000 +2.24% -

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

Mantra for week -The Black Box/High Frequency Traders control the vast majority of trades.

Another typical light/decreased volume rally that has become the norm for the Black Box traders that control the markets.

Major indexes are cutting through support levels like a knife through butter. = Bullish

For only the 8th time in history the Dow has seen triple digit gains over 3 days

Significant Indexes-

  • McClellan Oscillator (MO) rose  to +97.25 [+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. 79.25 = BEARISH
  • US Dollar –  The dollar  fell  -0.46% yesterday [Anything over +/- @0.50 is significant.] The dollar/stocks relationship is strong – Dollar up = stocks down and visa versa. Dollar just broke a major support level yesterday = Bullish
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also, good proxy of China.) BDI was in free fall from a high of @4200 to 1700 . This was a huge -60% drop in 8 weeks is very bearish Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI has staged a 7 day+8% rally and is at 1841bullish

Reading Tea Leaves-

The Black Box/High Frequency traders are on a buying rampage. You can’t call it a parabolic climax buying spree because of the lack of volume. Then again the BB/HFT have shatted all the former technical rulus about volume.

Because support levels have fallen, any small dip will now probably be bought into by non Black box traders.

Both the dollar and the BDI have clearly reversed their trends.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Updated over weekends Investors411 holds ONE position in SDS at this time

Sticking with overall strategy. But its looks more and more like a trade.  Looks like the original SDS (Short ETF trade) is going to loose $)

Instead of catching a downside move in a bear market , its turned into a downside move in an overbought bull market. This also makes the chances for success less and you have to be a more nimble trader instead of investor.

Strategy - From Monday - The same as before – “If/as US major indexes become more overbought the more ETF’s that sort the market will be purchased. Starting out with SH. Then the higher above 60 the MO goes, the more SDS (200% short the S&P 500) and other even 300% short ETF’s will be used the higher the MO goes.  See POSITIONS section at top of blog for more. Therefore what is happening is a series of trades (Short ETF’s) the more overbought the market becomes.

The same entry/exit strategy applies. Considering dropping exit/entry point to 4 instead of 5%. See Friday’s Investors411 for more. The following trades were made Friday.”

SDS (ETF the shorts the S&P 500 at 200%) was bought at 32.50 Nibbled with just a 2% of portfolio position.

From Yesterday

EWZ (Brazil) an ETF Investors411 owned for years is again outperforming and is a buy the dip opportunity.

GLD - (Gold) has come down off its high and any further dip Investors411 will buy.

Paul & Monitor in the comments section and several of you privately are anxious to reinstate the June 2 2010 YOUR Stock List – Using the old list as a starting point – will try to put a list of a dozen stocks together to buy on a dip.

Right now EWZ is the leading ETF candidate.

Long Term Outlook - NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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July 26, 2010

Bulls and Bears

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

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Bulls & Bears

The case for a rising or falling stock (not economics) market

The Bears

  • At best unemployment in the USA has stabilized around 9.5%. The stimulus that has caused the reversal will soon run out and employment will grow.
  • Housing prices have at best stabilized. 90+% of mortgages are now in some way backed by the US government  (Fannie & Freddie)
  • Not only is the middle class in the USA shrinking, most people are saving more than they used to. Money flows are therefore diminishing.
  • The European bank stress test was at a best a PR exercise. US banks are not loaning like they used to. They’d rather make more profit in other areas and are still in after shock from the original crisis.
  • European Union with the world’s largest GDP, has many shattered economies (PIIGS &  Eastern Europe) and the others are no better off than the USA.
  • The US has an exploding military budget $1,003,000,000,000 ($1.03 trillion) last year. If you count all our military expenditures it is over 60% of the world’s military budget.
  • Iraq ‘s March elections created a stalemate with no government. The two leading candidates lavishing praising Hezbollah’s founding ayatollah and meeting/praising  Sadr (anti American ayatollah in self imposed exile in Iran) to beg he joins their side in new government.
  • AfghanistanWikiLeaks has just released 90,000 documents showing “devastating portrait of the failing war.”
  • China, the leading emerging market has a housing bubble.
  • Stocks are overbought according to the MO (see below)

The Bulls

  • The dollar is falling and close to breaking out of chart pattern to downside. Lower dollar = higher US stocks because US goods will cost less overseas.
  • Oil prices near breakout to new 3 month highs. Higher oil shows greater consumption = bullish, but not if you’re a consumer.
  • Shipping prices have rebounded and are moving higher. See BDI below.
  • According to International Energy Agency China surpassed the USA in energy consumption in 2009.
  • Most US companies that reported better than expected profits cited emerging markets (China specifically) as where they were growing the fastest and creating jobs.
  • China will spend $738 billion over the next decade on clean energy. = growth. The USA can’t get a weak climate or energy bill passed congress.
  • Unless you want to invest in some European bonds (example Greece) there is almost nowhere to go besides stocks to get more than a couple % growth for your $.
  • Black Box/High Frequency Traders dominate the market and they are ONLY concerned about short term results. They can go long or short.
  • Weak banking reform means shadow banks can again get over leveraged.= more profits=higher stock prices till another crash.

I’m sure I missed some. To see the positions Investor’s411 is taking see Positions below and also click on POSITIONS at top of blog.

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 +0.99% down
NASDQ +1.05% up
S&P 500 +0.82% down
Russell 2000 +2.39% -

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

Mantra -The Black Box/High Frequency Traders control the vast majority of trades.

The NASDQ volume was slightly above average, but the other major indexes had a typical light volume rally that has become the norm for the Black Box traders that control the markets.

News on the earnings week ahead

Significant Indexes-

  • McClellan Oscillator (MO) rose dramatically to +79.48 [+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. 79.25 = BEARISH
  • US Dollar –  The dollar  fell  -0.16% yesterday [Anything over +/- @0.50 is significant.] The dollar/stocks relationship is strong – Dollar up = stocks down and visa versa. The Black Box traders, have used the inverse relationship of the dollar as a key part of their trading system. At bottom of trading range. = Neutral/Bullish
  • BDI The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also, good proxy of China.) BDI was in free fall from a high of @4200 to 1700 . This was a huge -60% drop in 8 weeks is very bearish Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI has staged a 6 day +7% rally and is at 1826 = bullish

Reading Tea Leaves-

The McClellan Oscillator at +79.46 shows stocks as being overbought. I’d be just a little more cautious about using short ETF’s too early because of the strong bullsh sentiment right now among Black Box traders. But, its clearly time to think about using those ETF’s that short major indexes. Click on POSITION at top of blog for more info.

The MO has not been above 80 since the big spring rally in April of 2009 – then it reached @ 105. In early Jan. of 2009 it did reach 120.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Updated over weekends Investors411 holds ONE position in SDS at this time

Strategy – From Thursday - The same as before - If/as US major indexes become more overbought the more ETF’s that sort the market will be purchased. Starting out with SH. Then the higher above 60 the MO goes, the more SDS (200% short the S&P 500) and other even 300% short ETF’s will be used the higher the MO goes.  See POSITIONS section at top of blog for more. Therefore what is happening is a series of trades (Short ETF’s) the more overbought the market becomes.

The same entry/exit strategy applies. Considering dropping exit/entry point to 4 instead of 5%. See Friday’s Investors411 for more. The following trades were made Friday.

  • SH (ETF that shorts the S&P 500) was sold for 51.26 – a -2% loss. The other 1/2 of SH was sold earlier for a 3% gain
  • SDS (ETF the shorts the S&P 500 at 200%) was bought at 32.50 Nibbled with just a 2% of portfolio position.

Reasoning - The majority of technical analysts seem to be bullish, the BDI has reversed its 8 week fall & the dollar is right at its major support level.Therefore they may be room for 3 week bull rally may continue. We could reach a high above 100 on the MO. However the MO chart has not gone over +80 (where it is now) since April of 2009. Translation – There is some greater risk in this trade than if we had long term bearish outlook. However the more overbought thing get the safer the trade.

Longer term investors may want to wait to see of the MO goes up another 20 points before nibbling. Please recognize that right now this looks like it may only be  a trade  and NOT a long term investment

EWZ (Brazil) an ETF Investors411 owned for years is again outperforming and is a buy the dip opportunity.

GLD – (Gold) has come down off its high and any further dip Investors411 will buy.

The Long Term Outlook has been changed to NEUTRAL from Cautiously Bearish As explained/predicted Friday, the benchmark S&P 500 broke through the first of 4 different resistance levels. Another 3% move higher and the remaining 3 levels will fall.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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July 23, 2010

3:45 AM

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

Crew Team Assign

3:45 AM

This morning at 3:45 AM I dropped my wife off for the 3 day 60 mile Susan G Komen the Cancer  Cure. Thousands will be joining her. At least once a year Investors411 encourages its friends to donate to a worth cause.  Ours has been Cancer research.

So far Joyce as raised  $1,699 & her goal is $2,300. Outside of having children she feels this is this most important thing she has ever done. Some of you have already donated and if you’d like to donate see JOYCE’s Page On the right you’ll find the box to click on to donate.

“The Stupid Cancer Show”

My daughter Katie, a breast cancer survivor, has been raising funds and crusading for cancer survivors for years. Listen to her speak on the The Stupid Cancer Show this Monday 7/26 LIVE 9PM ET/6 PM PT to share her story and talk about cancer!http://bit.ly/99fJRu

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 +1.99% up
NASDQ +2.68% down
S&P 500 +2.25% down
Russell 2000 +3.73% -

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

The Black Box/High Frequency Traders took US equities significantly higher in average volume. Typical rally day for stocks dominated by BB/HFT.

Yesterday UPS (+5.23%) announced results and many analysts saw the giant package delivery company as a catalyst for the rally. The CEO was bubbling over about growth in emerging markets and hiring lots of new employees – you guess where – in CHINA.

MSFT was up 2.87% yesterday & 0.23%

Big news – European stress test (“whitewash”) on banks is due out today.

Proosta (see comments section) has come up with 20 of the top 100 high demand stocks yesterday.

Significant Indexes-

  • McClellan Oscillator (MO) rose dramatically to +58.08 [+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. = Almost Overbought or bearish
  • US Dollar –  The dollar  fell a significant -0.94% [Anything over +/- @0.50 is significant.] The dollar/stocks relationship is strong – Dollar up = stocks down and visa versa. The Black Box traders, have used the inverse relationship of the dollar as a key part of their trading system. Despite big fall yesterday still within trading range = Neutral
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also, good proxy of China.) BDI was in free fall from a high of @4200 to 1700 . This is a huge-60% drop in 8 weeks is very bearish Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI has staged a 5 day rally and is at 1801 = bullish

Reading Tea Leaves-

All it took was a day and we are back on the cusp of the MO being overbought. Since the BDI has turned positive I’d be just a little more cautious about using short ETF’s too early. But, its clearly time to think about using those ETF’s that short major indexes. Click on POSITION at top of blog for more info.

The MO has not been above 80 since the big spring rally in April of 2009 – then it reached @ 105. In early Jan. of 2009 it did reach 120.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Updated over weekends Investors411 holds ONE position in SH at this time

Strategy – From yesterday - The same as before - If/as US major indexes become more overbought the more ETF’s that sort the market will be purchased. Starting out with SH. Then the higher above 60 the MO goes, the more SDS (200% short the S&P 500) and other even 300% short ETF’s will be used the higher the MO goes.  See POSITIONS section at top of blog for more.

Usually about a 100 point rally on the Dow translates into @ a 15+ points higher in the MO.  That would get us to about +73 on the MO today. A good place to do a little stock fishing.

Personally, this time will probably start with SDS (200% short the S&P 500)  Will add even more short ETF’s if/when MO goes above 75/80

When you buy any position its important you know when you are going to sell. In the case of SDS there will be a 5% stop/loss. If I make $ – 50% of SDS will be sold for a 5% gain and the stop loss will be moved lower as gains progress.

N.B - The following will seem contrarian to the investment strategy, but if the benchmark S&P 500 breaks out and closes above resistance level of 1100 & 1106 (109.44 high of early last week & 1105.67 an earlier high) the Long Term Outlook will change to NEUTRAL There are two more resistance levels above that, so bulls are going to have to make quite a charge to break out.

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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July 22, 2010

Morally Ugly

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

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Morally Ugly

The Brietbart/Sherrod controversy is perhaps one of the most morally ugly examples of what passes for news in America. Brietbart. a major right wing news source/blogger produced a snippet of a speech given by a relatively minor black Obama administration official, Sherrod, supposedly proving she was a racist against whites.

The vast echo chamber of FOX news (From Glenn Beck to owner Rupert Murdoch) & right wing media who is desperately truing to prove Obama is a racist splashed the story all over the media.

Shirley Sherrod after getting hammered 24/7 by the right wing & American media, was asked to resign (thrown under the bus) by Obama administration who along with the FOX & company thought this would distract for the big Financial Regulatory Bill signing.

Turn out when the whole speech is played there is no anti white racism and the farmer  Roger Spooner who is the supposed focus of Sherrod’s racism says -

No way in the world. No way. No way. I don’t even want to talk about it. It don’t make sense. She was just so nice to us as – she didn’t – there wasn’t no – there wasn’t no racism attitude at all in it. Heck no. … They don’t know what they’re talking about,”

The Glenn Beck, Rupert Murdoch tie above was intentional. Because it ties big business with those that spew unfounded hatred. They do this kind of fear mongering because it sells and produces results – both politically and monetarily.

When the Republican Congressman jumped up in the Obama State of the union and shouted “YOU LIE” he was overwhelmed with donations. Like the congressman, Brietbart whose actions are morally reprehensible will flourish.

The lemming like American media and this time the White House rushed to echo another right wing smear. When the truth comes out you hear almost nothing from Drudge to FOX on their rush to judgement. There is one word to describe our right wing, fear mongering hate filled media – Disgrace

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 -1.07% up
NASDQ -1.58% up
S&P 500 -1.28% up
Russell 2000 -1.86% -

Technicals, Fundamentals & Analysis

How markets react to news is the key to forecasting direction. APPL is the “darling of HFT/BlackBox traders.” As Paul R concluded yesterday (see comments section) AAPL was going nowhere despite a great earnings report. Good analysis. This was probably due to the overbought (MO near 50 yesterday) nature of the market.

So along comes Ben Bernanke speaking in front of congress and traders focus on the worst of what he has to say = Bearish

US markets fell in increased average volume = Bearish

Mr Softy MSFT reports after bell today

Under traditional circumstances, you’d figure if the 800 lbs gorilla, AAPL, can’t move markets higher then nothing in future earnings reports this month will push stocks up. But with HFT’s dominating trading anything goes.= ??????

Bottom Line = Investors411 is far more focused on overbought/oversold (MO) levels than daily chatter.

Significant Indexes-

  • McClellan Oscillator (MO) fell to +25.52 [+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 a significant +0.79% [Anything over +/- @0.50 is significant.] The dollar is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, have used the inverse relationship of the dollar as a key part of their trading system. Earnings have trumped this indicator for now, but yesterday it looks like this inverse relationship  trumped earnings.  = NEUTRAL
  • BDI The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also good proxy of China.) BDI was in free fall from a high of @4200 to 1700 . This is a huge-60% drop in 8 weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context.  A small but important four day rally indicates the BDI seems to have found a bottom — a short term bullish sign. BDI now at 1782 Fundamentally the-58% drop is very BEARISH

Reading Tea Leaves-

Bummer, Just when the MO shows US indexes are almost overbought enough to put the odds of going short (using ETF’s that short major US indexes) more in our favor, the MO falls back into Neutral territory.

Several of you have asked about YOUR stock list. – If/when the MO goes negative (below zero) we should start putting it back together. We will use the old list as the foundation. One major difference this time – Let’s look for more liquid stocks, because those are the stocks that get juiced by High Frequency Trades. This also means that the higher beta stocks (more volatile) are apt to do even better.

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Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Updated over weekends Investors411 holds ONE position in SH at this time

As the MO approaches oversold territory will again consider ETF’s that short the market.

StrategyThe same as before - If/as US major indexes become more overbought the more ETF’s that sort the market will be purchased. Starting out with SH. Then the higher above 60 the MO goes, the more SDS (200% short the S&P 500) and other even 300% short ETF’s will be used the higher the MO goes.  See POSITIONS section at top of blog for more.

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July 21, 2010

The 800 lbs. Gorilla

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

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Apple

Once again AAPL has hit a grand slam for is earning report. Apple is the 800 lbs. gorilla in the room and probably now beats out Exxon as the world’s #1 company. It is also the company most responsible for keeping the worlds economy afloat.

Their major new growth is, of course, in emerging markets. So Apple to meet the demand has to hire new workers? Guess where 100,000 new jobs were recently added? CHINA

Intel co founder Andy Grove has correctly identified the problem and calls it “scaling.”  Apple is simply opening outlets where the new growth is fastest and the labor by far is cheapest. Any US start up when it comes time for major production is going to do the same. It the mega trend of globalization at work.

John S writes in the comments section – “Perhaps as a country we’ve missed the boat.” He may be right. It is almost impossible to reverse this mega trend of globalization. But we can at least try to make a difference and lives better for our fellow Americans.

The progression goes like this.

  • Globalization makes moneyed class in America rich.
  • Jobs go abroad.
  • USA – middle class suffers.
  • Corporations gain power in USA and average Americans loose power (democracy)
  • Chinese, one party state (oligarchy/dictatorship) gains power over both American companies (think Google) and its people the more it grows economically.
  • US becomes more dependent on China economically.

Flying above the 800 lbs gorilla is the 1,400,000,000 people Chinese Dragon. We should be teaching Chinese in all our schools to get ready for the future.

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 +0.74% flat
NASDQ +1.10% up
S&P 500 +1.14% up
Russell 2000 +1.82% -

Technicals, Fundamentals & Analysis

The High Frequency/Black Box traders turned an almost -1.5% loss into a gain  of +0.75% yesterday. Volume was again , below average.

Fundamentals were bad – GS, IBM & TXN had disappointing earning, & economic news was not good. Yet the markets rallied on the bad news all day & into the close = Bullish

AAPL hit another  earnings grand slam after the market closed yesterday. Up +2.57% yesterday and was up over 4% in post market trading last night. = Bullish

Bottom Line –  High Frequency/Black Box trades that make up the majority of trades on US stock markets have shattered many former rules of traditional technical analysis. What used to happen is a week now takes place in a few hours in significantly lighter volume. Some conclusions

  • The MO has basically worked as a predictive tool. +/-60 is not the exact overbought/oversold level market turn, but a useful rough guideline for when to be long or short.
  • The Black Boxes, because of their size, stick to trading ETF’s and major liquid stocks. AAPL is their darling.
  • At different time the algorithms Black Boxes use change.  Example – The religiously followed the dollar for weeks then switched away.


Significant Indexes-

  • McClellan Oscillator (MO) rose to +49.90 [+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 +0.28% [Anything over +/- @0.50 is significant.] The dollar is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, have used the inverse relationship of the dollar as a key part of their trading system. Earning have trumped this indicator for now & we have consolidated for last two days. = NEUTRAL
  • 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 of @4200 to 1761 . This is a huge -59% drop in 8weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI rose for the first time in 8 weeks the BDI rose Friday.  Last two days also saw small rallies. At long last the BDI seems to be finding a bottom - a bullish sign, but still too early to tell. Fundamentally the -59% drop is very BEARISH

Reading Tea Leaves-

The MO is again approaching oversold territory. It is the currently the most significant of the indicators considered.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Updated over weekends Investors411 holds ONE position at this time

From Monday – “SH – The ETF that shorts the S&P 500 was bought at 51.45… 1/2 of SH was sold for 53.02 for +3% profit.  Letting the rest ride and will sell when conditions on MO near oversold.” The stop/loss on SH was removed and replaced at @3% below what it was bought for 49.95.

As the MO approaches oversold territory will again consider ETF’s that short the market.

Strategy - The same as before – as US major indexes become more overbought the more ETF’s that sort the market will be purchased. Starting out with SH. Then the higher above 60 the MO goes, the more SDS (200% short the S&P 500) and other even 300% short ETF’s will be used the higher the MO goes.  See POSITIONS section at top of blog for more.

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July 20, 2010

Jobs, Jobs, Jobs

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

Investors411 record – 5 years of beating benchmark S&P 500

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Jobs, Jobs, Jobs

Ever since the 2008 meltdown Investors411 has stated financial and economic conditions are “far far far far far bigger than first imagined.” This statement that has been made many times and is still bolded in the position section of the blog.

Poll after poll (except among Tea Party supporters) have said “To Hell with the Deficit, Its Job, Jobs, Jobs.“ See yesterday’s Investors411 for  a list of historians and economists who make the same case less colorful language.

Immediate Help

  • Extend unemployment benefits its “the human thing to do.” Republican Billionaire Mort Zukerman
  • Extend unemployment because (the average American unemployment check was under $300 a week in 2009) it will stimulate the economy. These people will SPEND the money and we all benefit because money flows.
  • Republican’s know that the longer they can delay a vote on this the less money will flow and consequently the more people unemployment will grow before the November elections. Every day they delay = the more votes they get in November, because they can blame Obama for unemployment.
  • It’s certainly hypocritical to endorse the Bush tax cuts on the wealthy. Next vote for unnessesary war funding outside the budget for over 10 years. Then play politics because our own American families of former workers are going hungry.

Longer Term Help

  • Infrastructure projects get you the most bang for the buck according to Mort Zukerman (who I usually don’t agree with) and most economists.
  • We need an Independent Infrastructure Bank Not one where a powerful Senator like Democrat Harry Reid can take $350 million for a high speed train from LA to his home state of (Los Vegas)Nevada.

Bottom LineAndy Grove, Intel’s CEO had it right – Globalization has created a major “scaling” problem in the USA. Unless we somehow change that direction the ultimate result is going to be very negative economically for the USA.


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 +0.56% down
NASDQ +0.88% down
S&P 500 +0.60% down
Russell 2000 +0.44% -

Technicals, Fundamentals & Analysis

The High Frequency/Black Box traders (that are focused on the here and now) pushed the markets higher in weak trading. This has been the typical headline for many moons in what’s been a falling market since April. – Lower price highs and lower lows.

IBM was the earnings report of most interest and its down @-4% in pre market trading = Bearish

APPL – Both Monitor and Paul R have warned about today’s earnings report at close.

YOU have pretty much reached consensus that holding a stock, especially in a declining economic environment, is highly risky before its earning report. If you are an insane lover of risk (short term trader) and AAPL continues to drop before earnings – it does take some of the downside risk away.

Ruptured oil well leaking again and possible leaks on oil on ocean floor related to BP oil spill. Best site for this is The Oil Drum = Bearish

Significant Indexes-

  • McClellan Oscillator (MO) rose to +21.91 [+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 works. = NEUTRAL
  • US Dollar –  The dollar Friday was basically flat +0.04% [Anything over +/- @0.50 is significant.] The dollar is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, have used the inverse relationship of the dollar as a key part of their trading system. Earning have trumped this indicator for now & we have consolidated for last two days. = NEUTRAL
  • 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 of @4200 to 1700 yesterday. This is a huge -60% drop 8 weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI rose for the first time in 8 weeks the BDI rose Friday & +0.70% yesterday. At long last the BDI finding a bottom - a bullish sign, but too early to tell.Fundamentally the -60% drop is very BEARISH

Reading Tea Leaves-

Don’t think the negative fundamentals of the BDI (Trade and China) & Europe have been fully integrated into stock prices yet. Sure fells like we are going to have a negative day. But, with Black boxes in control (almost everyone else has fled to safer investments of bonds and treasuries) – you never know.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Updated over weekends Investors411 holds ONE position at this time

From YesterdaySH – The ETF that shorts the S&P 500 was bought at 51.45. It’s up over 3% now. 1/2 will be sold at 3% profit and a stop/loss has been put in place at what it was bought for. 1/2 of SH was sold for 53.02 for +3% profit.  Letting the rest ride and will sell when conditions on MO near oversold.

No other positions long or short are contemplated in immediate future because MO is neutral. Sorry, there is little to do but sit tight,  be happy you’re almost all in cash, and wait till we get oversold or overbought.

One exception is GLD or DGL (@200% GLD). Its dipping and if it falls to its 200 DMA – would consider buying on fundamentals.

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July 19, 2010

Hot, Hot, Hot

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

heat

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Hottest 6 Months Ever

The last 6 months have been the hottest ever on the planet. The record breaking heat waves of the East Coast are part of this

“The record temperatures we’re seeing now are especially impressive because we’ve been in “the deepest solar minimum in nearly a century.” It now appears to be over.”

This NASA news should have been the headline of every major paper. Instead the top link I found was the following minor site. If you want some science data on greenhouse gasses, global warming & how it works see National Reasearch Council of National Acadamy of Sciences

Alternative you can laugh with the Drudge Report or Fox News when they headline a goup of climatologists meet and it snows. Or read when they healine a couple climatologist who have seemingly fudged data, but are later exonerted. They, of course ignore or bury the NASA data.

“We’re getting a dramatic taste of the kind of weather we are on course to bequeath to our grandchildren,” says Tom Peterson, Chief Scientist for NOAA’s National Climatic Data Center.”

Reboot America

16 of America’s Leading Economists/Historians have come together to fight the Tea Party/Fox/CNBC/ Libmbaugh/Bachmann/Palin (Thanks to Popeye for his Bachmann comment) message of cut the deficit NOW. They realize that Jobs is the #1 priority NOW.  Their conclusion-

The urgent need is for government to replace the lost purchasing power of the unemployed and their families and to employ other tax-cut and spending programs to boost demand. Making deficit reduction the first target, without addressing the chronic underlying deficiency of demand, is exactly the error of the 1930s. It will prolong the great recession, harm the social cohesion of the country, and continue inflicting unnecessary hardship on millions of Americans

Obama’s Address

Republican’s have been blocking aid to small business and unemployment compensation for weeks. Here’s Obama’s weekly address.

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 -2.52% up
NASDQ -3.11% up
S&P 500 -2.88% up
Russell 2000 -2.82% -

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

Technicals, Fundamentals & Analysis

Economic fundamentals, some bad earnings report, and an options expiration Friday seemed to have made the Black Box/High Frequency Traders dive for cover.

Volume was a bit above average for the older DOW & S&P 500. Still it was NOT the kind of volume you’d associate with a major stock meltdown, but more the kind of volume you’d expect when options expire (The 3rd Friday of the month) Translation – Black Box traders clearly in charge of markets.

Almost 3% decline – Bearish

Earning come out big time week.

You can check pre market trading hereJust type in ticker symbol

Significant Indexes-

  • McClellan Oscillator (MO) fell to +7.53 [+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 Friday was basically flat -0.09% [Anything over +/- @0.50 is significant.] The dollar is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, have used the inverse relationship of the dollar as a key part of their trading system. This inverse relationship is part of their algorithmic system. There was a delayed reaction the last time the dollar fell over 1.00% – The next day we had an almost 3% rise in stocks.  For stocks =BULLISH
  • 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 of @4200 to 1700 yesterday. This is a huge -60% drop 8 weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI rose for the first time in 8 weeks Friday +1.18% yesterday. At long last the BDI finding a bottom – a bullish sign, but too early to tell. Fundamentally the -60% drop is very BEARISH

Reading Tea Leaves - I haven’t figured out the algorithms associated with High Frequency Trading. So its near impossible to make an accurate predictions of what they will do. However the majority do seem generally to follow the basic +/- 60 indicator on the MO.

Answering The Critic - (see comments section of blog)

  • The Good – Yea with a little luck did call the top and the last bottom. This came about by using both the meltdown in the BDI and MO reaching oversold.
  • The Bad – Why not invest more? I did set up a probable group of trades (short ETF’s) if the major indexes became more oversold Wednesday and/or Thursday.  Bottom Line – Its not the old time stock market any more. – Phony capitalism rules along with High Frequency Trades. Those ETF’s you mentioned are impacted by phony capitalism and HFT’s so you have to be more cautious. My trades tend to be more conservative (example SH last week instead of SDS) YOU can be more aggressive.
  • The Ugly – Fixing High Frequency trades (or phony capitalism) Most of the trades in the 1000 point meltdown were cancelled. However HFT and phony capitalism (example-shadow banks) banks are a reality. In the USA (the leading GDP capitalist country), if the moneyed class keeps getting richer and the middle class poorer market fundamentals will continue to deteriorate.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Updated over weekends Investors411 holds ONE position at this time

SH – The ETF that shorts the S&P 500 was bought at 51.45. It’s up over 3% now. 1/2 will be sold at 3% profit and a stop/loss has been put in place at what it was bought for.

I’m not so sure Friday’s meltdown was as bad as it looks. It may have been something exaggerate by HFT and Options experation.

No other positions long or short are contimplated in immediate future because MO is neutral.


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July 16, 2010

Obama’s Birthday Presents

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

A portrait shot of a serious looking middle-aged African-American male looking straight ahead. He has short black hair, and is wearing a dark navy blazer with a blue striped tie over a light blue collared shirt. In the background are two flags hanging from separate flagpoles: an American flag, and one from the Executive Office of the President.

Obama’s Victories

It may be over the top  to call the events of yesterday Obama victories (credit/blame should be spread), so lets call them birthday presents.

Bottom line -  We should have done better, but it could have been a whole lot worse.

  • The BP oil gusher in the Gulf looks to be completely capped. Also, victory for oil industry who now proves they can stop leak at 5,000+ feet.
  • SEC gets record settlement against shadow bank GS, legislation to prevent what GS did is included in financial reform legislation, but GS wins by preventing a whole lot of bad PR by going to trial.
  • The biggest birthday present is the Financial reform bill passes congress. (Senate, 60 -39)
  • Another big victory is Republican leadership, like in health care, promising to repeal it all instead of saying well keep this part because its good and eliminate that.

Here’s the lead NYT editorial on Financial Regulation. Some relevant points.

  • “Since January 2009, the financial sector has spent nearly $600 million to weaken reform” – they scored many victories.
  • “the margin of victory was really about partisan politics and not the bill’s content.” Majority of blame here is on Republicans, but NYT does not mention Democrats are not without partisan transgressions.

Investors 411 has beat the drum for a tougher bill and it to be more inclusive of transparency in government agencies. However, we got more out of this than we did out of health care legislation. Both are steps in the right direction that need amending.

The next big battle is who heads and is on the board of resolution authority and consumer protection. Geithner is opposing Elizabeth Warren as the new head of Consumer Protection Agency. Warren is perhaps the #1 hero in the accountability, transparency and reform of Wall Street.

YOUR Comments

Sorry I’ve run out of time. However Ewanapat has a fabulous link to a controversial article on Ron Paul/David Stockman . This continues the debate over Barney Frank & Ron Paul stated by SE

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 -0.07 up
NASDQ -0.03 down
S&P 500 +0.12% up
Russell 2000 -0.87% -

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

Technicals, Fundamentals & Analysis

Mantra for week “Earnings Season begins this week. - How markets react to news has usually been the key. If a stock shrugs and goes nowhere on good earnings news you know there’s trouble ahead. Remember Black Box algorithms  dominate even more as volume declines.”

  • 2nd Weak volume flat day in a row = Mildly bearish
  • Stocks rallied into close = Bullish
  • BP seems to have fully cap oil spill = Bullish
  • GS settles with SEC, pays record $550 million fine, but avoids prolonged bad PR = Bullish
  • GE reports lowers forecast. Down @2% in pre market trading - Bearish
  • GOOG reported earnings and was down @4.5% in pre market trading (7:45 EST) = Bearish
  • BAC reports and is down @4.5% this AM = Bearish
  • Fin/Reg is over. No ore questions what will legislators do. = Bullish

You can check pre market trading here – Just type in ticker symbol

Significant Indexes-

  • McClellan Oscillator (MO) fell to +43.48 [+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. The Black Boxes have not allowed the MO to rise above 80 since 3/09.  Now close to overbought position = mildly bearish
  • US Dollar –  The dollar fell a massive -1.04% yesterday [Anything over +/- @0.50 is significant.] The dollar is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, have used the inverse relationship of the dollar as a key part of their trading system. This inverse relationship is part of their algorithmic system. There was a delayed reaction the last time the dollar fell over 1.00% – The next day we had an almost 3% rise in stocks.  For stocks =BULLISH
  • 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 of @4200 to 1700 yesterday. This is a huge -60% drop in almost 8 weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI fell a much decreased -0.53% yesterday. The decrease could be the start of the BDI finding a bottom – a bullish sign, but too early to tell. Fundamentally the 60% drop is very BEARISH

Reading Tea Leaves

From yesterday is Black Boxes push markets slightly higher. Reasons – dollar probably continues to fall  & momentum higher at close yesterday.”

Today – Yesterday’s huge drop in the dollar gives bulls something to rally on. See analysis of events above. Is the BDI turning? – another sign of hope. The MO is at 43 and there is some wiggle room till 60 and a lot of distance to major resistance at @80. Bad earnings news from giants GE, BAC & GOOG will hurt budding rally.

Wow  - an enormous amount of cross currents impact US stocks differently. Looks like a roller coaster rally. Watch UUP the ETF for the dollar – if it keeps falling stocks go higher.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Updated over weekends Investors411 holds ONE position at this time

Same strategy still holds. Our one small short position SH seems to be in some danger today. Short term  traders may  get in trouble with short positions today.

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July 15, 2010

Kissing Cousins

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

Photos of Ron Paul & Barney Frank from Wikipedia

Kissing Cousins?

SE writing in the comments section has a revelation and points out  similarities between Libertarian Ron Paul & Barney Frank. He concludes “We need to change our foreign policies and redirect the savings to our domestic policies.” Source – A Paul/Frank joint interview on public radio

Ron Paul is perhaps even more aggressive about getting out of Afghanistan, Iraq and closing our costly European bases than Barney Frank. Paul’s position is often echoed in the comments section by Mama Jama who believes we should bring everyone home and protect the USA (also Israel).

Jsovjani has always wanted Europe to pay more in the defense of Europe & the world, but realizes that’s not going to happen. (see comments section) In the far right’s eyes Europe’s major threat is (“old communist”) Russia. But the Russians would rather get rich selling the Europeans their natural resources than fighting them.

The problem with most libertarians is they want not only to eliminate almost all military spending they also want to eliminate almost all social security, medicare and supervision of capitalism,  etc.  They’d let the shadow banks run wild.

Black Box Algorithms

I know this is boring, but its YOUR money.

One major change from black box traders is basically all stocks are moving together in concert. CNBC had an analyst/chartist on at noon EST who demonstrated that for decades US stocks have not moved in concert like they are now.  They all go up together and down together.

This is directly due to Black Boxes that buy and sell (they also use puts and calls) sector and Index ETF’s. They also concentrate on mostly liquid stocks. They make up 50% to 80% of trades in a given day – so with their High Frequency Trades everything moves in concert. (more later)

This is one major reason Investors411 is using ETF’s right now.

This does NOT negate our stock list or selecting best stocks out there – something Paul R and and a few others do quite well. In fact, picking the best stocks in oversold conditions may be even more relevant.

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 +0.04% flat
NASDQ +0.35% down
S&P 500 -0.02% down
Russell 2000 -0.41% -

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

Technicals, Fundamentals & Analysis

Mantra for week Earnings Season begins this week. - How markets react to news has usually been the key. If a stock shrugs and goes nowhere on good earnings news you know there’s trouble ahead. Remember Black Box algorithms  dominate even more as volume declines.

The Intel earnings home run went from a +8% move in pre market trading and ended the day up +1.67% = Bearish

Black Box traders rallied into the close = Bullish

Markets went no where in weak volume. If they do this again its bearish. Now = Neutral

Largest market news event - China economy slowed as expected in the second quarter. It’s hard to trust any government’s economic proclamation – especially China. Numbers are usually massaged in favor of who is in power. Translation – China is growing, just not as fast as they say. This fact is generally accepted by most investors/traders so its not news.

Significant Indexes-

  • McClellan Oscillator (MO) fell to +51.57 [+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. The Black Boxes have not allowed the MO to rise above 80 since 3/09. Now close to overbought position = mildly bearish
  • US Dollar –  The dollar fell -0.26% yesterday [Anything over +/- @0.50 is significant.] The dollar is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, have used the inverse relationship of the dollar as a key part of their trading system. This inverse relationship is part of their algorithmic system. For stocks = Bullish
  • 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 of @4200 to 1710 Monday. This is a huge -59% drop in almost 8 weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI fell a decreased -4.53% yesterday. You have to go back to April of 2009 to find a lower BDI. Fundamentally this is very BEARISH

Best read of tea leaves is Black Boxes push markets slightly higher. Reasons – dollar probably continues to fall  & momentum higher at close yesterday.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Updated over weekends Investors411 holds ONE position at this time

The overall stagey at this time especially for traders (as opposed to longer term investors) is to buy ETF’s that short the market. As the MO shows the market is more overbought add to those positions using ETF’s that short more and make bigger purchases.

  • Yesterday Investors411 bought SH – The ETF that shorts the S&P 500. @% of portfolio position at 51.45
  • US markets did not rally enough (get overbought enough) to use the EFT’s that double or triple short the indexes and even buying the SH might be premature
  • If when indexes move higher I will add these ETF’s (see yesterday’s investors411)
  • Will keep a 5% stop loss on each position.
  • It depends a lot on how high the MO goes, but for the next couple days a rally of the benchmark S&P 500 above 1105 will probably be the next buy area.

.

Long Term Outlook =CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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