Investors 411 Blog

by Barr Jozwicki
October 29, 2010

The Sky is Falling

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

Most/perhaps all are Shadow Banks

Consequences of Financial Meltdown

The Major Players

  • The Fed – Our unaudited Central Bank, established in 1913. It supervises monetary policy in USA, maintains stability in financial system, prevents runs on banking system, & has ability to print and dump money. Greenspan & Bernanke last two chairmen.
  • The Treasury - Established 1789 and basically runs monetary policy for US government and enforces financial laws. Works closely with the Fed.  Paulson & Geithner last two heads.
  • Shadow Financials – These are the financials that got over leveraged. The government eliminated regulations banks used to have about leveraging starting in 1998. Later, they were also allowed by congress to drop regular accounting. So their books are essentially unaudited. Besides the big shadow banks there are well over 100 medium and smaller shadow financials. Also add companies like like AIG, GE’s financing division (conglomerate), GMAC (car company), Fannie Mae, Freddie Mac and more

The Problem/The Sky is Falling/The bailout

In 2008 it became apparent to many that shadow financial institutions had become over leveraged by placing bets on mortgages (credit default swaps).

  • Our unaudited Fed engineers a deal to save mortgage giant Bear Sterns and it merges with JP Morgan. No one knows what $ the Fed promised to make this happen. JPM later gets big chunk of TARP funds. Other smaller mergers happen.
  • Lehman Brothers goes Bankrupt in Sept. 2008. Lehman claims lots of assets, but by the time they fell apart they had $613 billion in Debt and could only raise $1 billion in cash.
  • Lehman debt spreads throughout the world, people realize how over leveraged all the other shadow financials must be, housing prices plummet, and stocks begin to fall. SPX goes from 1500 to 666.
  • Treasury proposes TARP. Treasury/US government (the only entity in the world with power to stop fall) proposes to buy up bad debt and sell it later.. Paulson/Treasury later changes this to loaning shadow financials money $700 billion. ($50 billion or less has not yet been repaid)
  • Stocks keep falling and QE1 introduced. Fed prints and dumps a trillion plus more dollars into economy. Finally stocks stabilize and start to move up There’s more but lets take a look at what happens if these actions do not take place

What If Absolutely Nothing Was Done?


You lived through the panic after the Lehman collapse. Now add this – What if the second largest mortgage company Bear Sterns collapsed on top of that? Add perhaps 3 time larger insurance giant AIG collapsing. It’s debt all owned to other shadow financials who themselves were up to their eyeballs in over leveraged debt. They too collapse like Lehman.

  • The weekend before TARP, a run on AIG had started across the world. AIG who insured the shadow banks goes down then one bank collapsing after another because their collateral is no longer solvent. People panic and media adds to the frenzy. Everyone realizes. Lehman was just the tip of a giant iceberg of debt.
  • Belly up goes AIG, BAC, Citi, Major European banks, GE, Fannie and  hundreds/thousands other major/minor financial institutions. No one knows which bank has how much debt, so people take their $ out of all banks. Fear grows hyped by the media.
  • Stock market goes far lower than SPX 666
  • Bonds of these banks collapse. Even with just Lehman’s collapse BAC bonds went from 100 to 82 before recovering. (An institution I am treasurer for owned these bonds)
  • Financials, Fannie & Freddie bonds were the backbone of many money market funds (Think Fidelity, Vanguard etc) They or their insurance agent go belly up as the bonds become more worthless. You may have received a negative return on your money market fund depending on how are the panic had spread.
  • Home prices plummet way way way way down.
  • Not knowing which banks are shadow banks panicked investors pull their money from all banks. You know how suseptable your fellow Americans are to fear and fear mongering. Worldwide run on banking results. – a financial armageddon.

So a worldwide financial meltdown was averted.

That’s the good news now for the bad.

  • How deep is the shadow financial hole? Fed engineered Mergers, TARP, QE1 now QE2, POMC and an UNAUDITED Fed who can had loans money at their discount window and/or use some other opaque means to fill the over leveraged gap of the opaque shadow financials.
  • All of this cash used to fix the problem creates imbalances in the economic system that magnify the trillions gone into filing the shadow bank hole. Beyond my understanding, but nobel prize economists like Joe Stiglets and others get it.
  • By 2008 we had already created a huge debt by going to war, cutting taxes, pork spending etc. So this new debt was built on more debt.

The UGLY

  • There is no regulated financial derivatives exchange.
  • We did not return to the old laws that prevented over leveraging in the past or end too big to fail. Congress passed are weaker measures.
  • Dopamine When you get high the dopamine centers of your brain are activated. You get addicted to this pleasurable feeling. Sometimes like running its a heathy addiction. But with drugs or greed you keep needing bigger doses to obtain the same high. Physiologically those that run the shadow banks are not going to change their ways unless there is enforcement.

I left out stuff and will be back to Obama’s negatives next 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!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Index Percentage Volume
Dow -0.11% down
NASDQ +0.16% flat
S&P +0.11% down
Russell 2000 -0.45% -

Technicals, Fundamentals & Analysis

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

US Stock Markets -

Stocks were flat – Dollar moved way down to about the middle of its consolidation range. Next Wednesday the Fed meets and tells us more about their QE2 (Quantitative easing part 2 or print and dump money into economy)

What Will the Fed do? What Will the Fed do? What Will the Fed do?.

The US is manipulating its dollar lower by printing and dumping money, This devalues our dollar and makes US goods cost less abroad. We sell more and lift ourselves out of recession/economic slump faster. Its a dollar war because other countries also see manipulating their dollar lower as a way out of recession/downturn.

Looks like the moves of the dollar are not relevant as long as it stays in narrow consolidation range.

Tech giant MSFT beat earnings & is up in pre market trading.

The person who is trying to protect YOU from the shadows and obstructionism, Elizabeth Warren, speaks out

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar fell a significant -1.07 yesterday. Dollar currently moving sideways within a range (see below). Back near middle of consolidation range Trend for stocks = Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Fell a significant -2.77% yesterday. BDI now consolidating after bull run that began in June. The BDI has been overshadowed by the dollar moves, but it if we get a few more downside moves like yesterday, outlook will change to neural then bearish Longer term Pattern=Bullish/Neutral
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Basically flat closed at -24.01% yesterday. Six week tend (see chart) is looking bearish but location still = NEUTRAL

Reading Tea Leaves.

Mantra -“Any move in UUP (tracking ETF for dollar) above 22.7 resistance is trouble for stocks. Any move below 22.18 support level is good for stocks. A breakout of either the support or resistance level will tell you who wins the dollar war.UUP closed at 22.41

Helicopter Ben Bernanke printing and dumping

Wednesday is the day the Fed will announce more about QE2. QE1 was a trillion plus dollars printed and dumped into the economy. Anything over that would say we are still in major shadow financial over leveraged crisis. So best read of tea leaves is between $300 & 700 billion. Do NOT know what Wall Street expects. But any over/under the expectation number will drive the dollar.

All of this is part of the shadow financials bail out program that started when the Fed first helped JPM merge with Bear Sterns. It includes TARP parts 1&2, QE1, POMC (see updates of last few weeks Fed dumps about 5 billion on certain days into economy through this)The Discount Window and whatever the UNAUDITED Federal Bank gives to basically UNAUDITED Shadow financials. Only God and the Fed knows how many trillions have been printed and dumped.

The end purpose is to make shadow financials solvent. The world realized how catastrophically over leveraged these shadow institutions were but has no idea of the exact amount. The fact that its hidden makes you think the debt is HUGE

Bottom Line = All eyes on Fed and how big QE2 is going to be. What the Fed says and does about QE 2 will probably set the course for stocks and settle the dollar war.

Positions

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

(I do manage 6 accounts that have other positions)

  • EWS (Singapore)
  • SSO (2x what S&P does).

Mantra - “Not making any specific move until dollar breaks out of its range. I would look at a breakout higher for the dollar, and a corresponding fall in stocks and the MO to oversold as a buying opportunity for long term investors.” Looks like next Wednesday Fed meeting is the big event.

Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including ”YOUR Stock List.”

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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October 28, 2010

Gettin’ NO Respect

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

Rodney Dangerfield/Barak Obama

No Respect

Barak Obama’s and Democrats accomplishments. Not in any specific order

  • Pure technical analysis or the facts – Stocks have gone up @ +27% under Obama they went down over -20% under 8 years of Bush In fact we reached a low of 666 on the benchmark S&P 500 in the first few months of Obama’s presidency. Hardly his fault. So instead of using 850 (approx. date of S&P when he took over) the stock market went up +77% under Obama. Yet CNBC (the financial channel) and most of Wall Stret collectively hates this man. But for those of us with investments the facts are the facts. WE MADE MONEY with a Democrat congress and Obama and not with Republicans. This blog is called Investors411 – the bottom line matters.
  • The Obama Stimulus worked. The biggest part ($288 billion) of the stimulus (almost 37%) was a TAX CUT. For all the Republicans screaming the stimulus was a total failure – I thought you liked tax cuts. The second biggest part of the $787 billion stimulus was benefits to medicare, laid off workers and state governments (keeping cops, teachers and firefighters in their jobs). For a more complete stimlus list link here Congressional Budget Office estimates between 1.7 & 3.3 million jobs added
  • Jobs –  When Obama came into office we were hemorrhaging over -700,000 jobs a month. Everyone said this was the worst economic crisis since the Great Depression – That depression took us decades to work ourselves into stability. In under two years we are at  @ o% jobs lost a month. Quite an achievement considering what dire straights the US and the world was in. This jobs growth is obviously linked to the stimulus.
  • Health Care - You may not love the reform but no President has accomplished major reform of any of the sacred cows – Social Security, Medicare, Military, raising Taxes to balance the budget.  Health Care insures almost all Americans, and the non partisan CBO estimated that the amount SAVED in the first 10 years would be $143 billion and over a trillion in 20 years. First figure revised down to $23 billion SAVED and 30 million more covered. Money Saved, More coverage = Accomplishment
  • Saved us from a “Second Great Depression. Remember when Obama took office the world was “standing on the precipice” Stocks, home prices, and job loss were in a death spiral. The Fed had already reached the lowest rate it could have 2 months before Obama took office. Stocks have roared back and job losses and home prices stabalized.
  • If you’d like a list of 108 of Obama’s specific accomplishments LINK HERE

The problem Obama has is twofold – Its a whole hell of a lot easier to sell fear and Americans want it NOW. Long term objective critical thinking and rational debate is a temperament and skill many Americans lack.

Tomorrow – Where Obama has failed

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!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Index Percentage Volume
Dow -0.39% up
NASDQ +0.24% flat
S&P -0.35% flat
Russell 2000 -0.38% -

Technicals, Fundamentals & Analysis

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

QE2

US Stock Markets -

The dollar got toasted again and stocks again lost minor ground. Now the dollar is right below major resistance. If the dollar moves up and breaks through the resistance barrier it should have a negative impact on stocks.

What’s everyone looking at –  The possibility of the Fed Watering down the QE2 (Quantitative Easing Part 2) Here’s a guy sometimes called “the bond king,” Bill Gross whose in no uncertain terms hates QE2. Remember bonds and stocks compete for your money.

What Will the Fed do? What Will the Fed do? What Will the Fed do?

The Trend – You’d think the fact that money has been flowing out of mutual funds for 25 straight weeks would collapse any market, but as you remember our mantra has been the Black Box/High Frequency Traders Rule. Ma & Pa are leaving stocks. and stocks are dominated by large firms looking for imbalances and running artificial algorithms that have almost nothing to do with a companies valuation.

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar rose a significant +0.58% yesterday. Dollar currently moving sideways within a range (see below). Now right below a resistance level. Trend for stocks = Neutral/Bearish
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Rose a minor +0.22% yesterday. BDI now consolidating after bull run that began in June. Longer term Pattern= Bullish/Neutral
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Fell to -24.81% yesterday. Six week tend (see chart) is looking bearish but location still = NEUTRAL

Reading Tea Leaves.

Repeat from past Investors411 -“Any move in UUP (tracking ETF for dollar) above 22.7 resistance is trouble for stocks. Any move below 22.18 support level is good for stocks. A breakout of either the support or resistance level will tell you who wins the dollar war.” UUP rose +0.13 and closed at at 22.65. This is just below a bullish breakout for the dollar which would be bearish for stocks.

Almost any technical analyst who looks at the chart of the UUP would pick out the huge volume increase and say – UUP or the US dollar has formed a bottom. There’s going to be a rally off this base for the dollar = bad for stocks

Almost any fundamental analysts would say the Fed is about to launch QE2 (see past Investors411) and that huge print and dump of $$$ will drive the dollar lower. = good for stocks

So lets use the MO as the deciding factor – The MO has developed over the last six weeks a pattern of lower highs and lower lows.  All we need is another slight drop (@5 points) to go from +60 to – 30. This is bearish, However, -24.81 (the current level of the MO) is starting to get close to -60 or oversold levels.

So if /when we have an up side breakout of the dollar and stocks are negatively impacted perhaps it will be a relatively short toasting for stocks.

Bottom Line = All eyes on Fed and how big QE2 is going to be.

Positions

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

(I do manage 6 accounts that have other positions)

  • EWS (Singapore)
  • SSO (2x what S&P does) Sold 1/2 of SSO for 42.28 An almost 3% gain. I was simply not watching a couple days ago when SSO was up 5+%. On these ETF’s that double and triple what major indexes do I like to take 1/2 profits at over 5% and let the rest ride. Put stop at 40.9 or what SSO was bought for.

Bulls are getting edgy

Again from previous days – “Not making any specific move until dollar breaks out of its range. I would look at a breakout higher for the dollar, and a corresponding fall in stocks and the MO to oversold as a buying opportunity for long term investors.”

Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including ”YOUR Stock List.”

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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October 27, 2010

Owning Democracy

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

“The Best Government Money Can Buy” – Mark Twain

Democracy’s Fall

Elections (Part 3)

Nothing will prevent me from voting next Tuesday.

But lets take a hard look at OUR so called Democracy in the USA by simply presenting a few facts. You can come to your own conclusion as to who is crushing YOUR Democracy. Some Facts:

  • There are 14,000 lobbyists in Washington for only 535 legislators. That’s 29 lobbyists for each legislator.
  • In 2008 & 2009 lobbyist spent $6.7 billion dollars in Washington to get what they want.
  • Lobbyists often write the legislation, legislators only spend on average 3 days a week in Washington.
  • Nancy Pelosi (#1 Dem in House) – campaign funds – 87% come from out of district 70% out of state.
  • John Boehner (#1 Rep in House) – campaign funds – 91% come from out of district 74% out of state.

Now, because of the Supreme Court we have unlimited corporate spending This vastly increases the power of the wealthy, big corporations and Wahington lobbyists

If you think this has no impact on YOU.

  • Look at what the lobbyists did to deregulate the financial industry. The result was the 2008 financial meltdown – Even with Bernanke, Bush & Obama massive influx of YOUR tax dollars and printed money keeping us from a total worldwide economic collapse – Look what happened to employment, your houses value and your stock portfolio. You pay and pay and pay. Like you are saying in the comments section of the blog – Wake Up and Smell the Coffee.
  • The Big Financial Services bill to regulate the shadow banks - 40% more money went to those who opposed Wall Street reform. Even those who voted against it received mountains of cash.

You’re simply the sheep being led to the slaughter in what you think is a transparent democracy. There is an growing oligarch that owns/buys more of your democracy each day.

Sources -

  • Dylan Ratigan Show especially this clip which is far more powerful than the above editorial.
  • MapLight.org gives you legislators, their donors and ties it to specific bills. You can see how much an industry and/or individuals paid to get a specific bill passed.

More on elections tomorrow – facts and solutions.

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!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Index Percentage Volume
Dow +0.05% up
NASDQ +0.26% down
S&P +0.00% down
Russell 2000 -0.14% -

Technicals, Fundamentals & Analysis

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

US Stock Markets -

Stocks remained flat as the dollar rose significantly within its consolidation pattern. A bit of a disconnect, for a close to  perfect inverse relationship. The Dow should have been down @1% with this kind of dollar move. However no resistance level was broken. The last time a significant move occurred in the dollar and stocks went nowhere, they made up for that with a major move the next day.

A major reminderthe majority of trades in the US stock markets are done by Black Box/High Frequency Traders and this has almost no significance to traditional investing in a company because of its value. The BB/HFT make a mockery of of traditional investing and like the too big to fail over leveraged shadow banks, if they were eliminated the stock bubble would bust. 50 to 80% of volume would simply vanish.

Wealth is being created artificially on stock imbalances and algorithmic formulas. Not because of a companies fundamental value. This is, of course, a bubble.

Repeat – “All eyes are on the dollar 24/7 and which way the dollar moves out of its consolidating range (see past updates) will determine the fate of stocks.”

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar rose a significant +0.75% yesterday. Dollar currently moving sideways within a range (see below). Now closer to upper end of range, Trend for stocks = Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Rose a minor +1.09% yesterday. BDI now consolidating after bull run that began in June. Longer term Pattern= Bullish/Neutral
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Fell slightly to -4.83% yesterday. Lot of room to move both higher and lower. Location= NEUTRAL

Reading Tea Leaves.

From past Investors411 -“Any move in UUP above 22.7 resistance is trouble for stocks. Any move below 22.18 support level is good for stocks. A breakout of either the support or resistance level will tell you who wins the dollar war.” UUP at 22.52 now

Repeat again – For three days in a row the dollar has started lower and rallied. Clearly there is a strong support level building. Yesterday we started out up and held onto the gains UUP is just 0.17 points away from upside resistance barrier.

This is a CAUTION day because the dollar is getting close to its resistance barrier.

Quantitative Easing or QE2 – This is the Fed’s print and dump of over a trillion dollars into the economy. One thing this has an positive impact on is stocks and devaluing the dollar. Here’s an editorial by Cullen Roche (Roche has a good record in predicting economic bubbles)- entitled “More Evidence That QE Doesn’t Work.”

Positions

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

(I do manage 6 accounts that have other positions)

  • EWS (Singapore)
  • SSO (2x what S&P does) Tightened stop on this.

Again from previous days – “Not making any specific move until dollar breaks out of its range. I would look at a breakout higher for the dollar, and a corresponding fall in stocks and the MO to oversold as a buying opportunity for long term investors.”

Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including ”YOUR Stock List.”

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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October 26, 2010

Deja Vu All Over Again

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

Elections

Part 2

Let’s start today with a fun video from Babelgum entitled Elect Willfully Ignorant (Thanks to HG for the heads up on this video)

“Deja Vu All over Again”Yogi Berra

“There’s a sucker born every minute” -PT Barnum

  • Remember the right wing fear mongered us the Iraq war was aslam dunk Saddam had WMD’s, it was going to be a cake walk, the war would pay for is itself and you were NOT a patriot if you believed otherwise.
  • Remember the shadow banks said no worrieswe are the best and brightest, we are not over leveraged, we don’t cheat, capitalism can regulate itself.
  • Remember when in 2000 the right wing cut taxes and went to war no problems” cutting taxes (especially for the rich) and war would lead to jobs growth. The wealthy would not invest abroad or in derivatves, big companies wouldn’t eat smaller ones cutting jobs, and outsourcing of good jobs would never happen.

All proved to be fabrications, We are now stuck with an endless war, too big to fail (they got that way by over leveraging) shadow banks dominating, huge deficits growing, almost a world wide economic collapse and American jobs that have disappeared.

What happened was a case of rebranding, hidden money, and astute marketing. Right wingers or the rich oligarchy realized that since they had caused this catastrophe of debt, wars, job loss & crony capitalism they needed a new brand. Hence the Tea Party or as Tom Friedman branded them the Tea Kettlers.

The Kettlers blew off steam. They yelled, screamed, and fear mongered. They had a huge TV network as backing.  Literally everything was shouted down in a web of fear and accusations.

They pumped up the fear just like before the Iraq invasion and the PT Barnum “suckers” fell for it again and again and again. Just like  Yogi Berra says – “deja vu all over again.”

Tomorrow Part 3 –  just the facts.


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!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Index Percentage Volume
Dow +0.20% up
NASDQ +0.46% up
S&P +0.21% up
Russell 2000 +0.63% -

Technicals, Fundamentals & Analysis

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

US Stock Markets -

The dollar went down – so it should be no surprise to Investors411 readers -US stocks went up.

All eyes are on the dollar 24/7 and which way the dollar moves out of its consolidating range (see past updates) will determine the fate of stocks.

One very important piece of news – Treasuries had a TIPS  auction (Treasury Inflation Protected Securities) and for the first time securities had a NEGATIVE yield. What’s all this mean? Investors who bought this 5 year bond think HYPER INFLATION is on the way

The Critic mentioned the “Golden Cross” (The 50 DMA crosses the 200DMA on chart) for two of the major US indexes. This is indeed a long term bullish sign and stocks are usually higher 6 months from now.  The Critic quoted a figure of 63% of the time.

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar fell an almost insignificant -0.45% yesterday. Dollar currently moving sideways within a range (see below) Trend for stocks = Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Rose a minor +0.77% yesterday. BDI now consolidating after bull run that began in June. Longer term Pattern= Bullish/Neutral
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Rose slightly to +4.48% yesterday. Lot of room to move both higher and lower. Location= NEUTRAL

Reading Tea Leaves.

The Dollar War continues. Dollar bears moved prices lower, and the tracking ETF for the dollar UUP ended the day at 22.37

From past Investors411 -“Any move in UUP above 22.7 resistance is trouble for stocks. Any move below 22.18 support level is good for stocks. A breakout of either the support or resistance level will tell you who wins the dollar war. UUP at 22.47″

For three days in a row the dollar has started lower and rallied. Clearly there is a strong support level building.

The fact that our Fed is about to embark on QE2 (see past updates) has already been called indirect currency manipulation or pushing the dollar lower by the Germans.

In the long term its easy to be a dollar bear and therefore a stock bull. You can also understand why folks are worried about hyper inflation.

Positions

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

(I do manage 6 accounts that have other positions)

  • EWS (Singapore)
  • SSO (2x what S&P does)

From yesterday – “Not making any specific move until dollar breaks out of its range. I would look at a breakout higher for the dollar, and a corresponding fall in stocks and the MO to oversold as a buying opportunity for long term investors.”

Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including “YOUR Stock List.”

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!


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October 25, 2010

Elections

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

An Election Wordle (Word Cloud) from Newswag

Elections

(Part 1)

Tuesday November 2nd is election day in the USA.

Obviously much has changed since the 2008 elections that impact the fabric of our Democracy.

The 5 to 4 Decision by the Supreme Court has overturned a century old restriction and given corporations and other outside entities (any wealthy individual can incorporate and influence elections) the power to give almost unlimited funds to influence an election.

Money is the mother’s milk of politics/elections and already the PAC’s that are dominated by hidden money, corporations, wealthy individuals, unions & groups have far outspent both political parties combined. You are limited and audited in the amount of money that you can contribute. In fact, organizations outside the USA can now buy propaganda to influence votes. Even companies that received your bailout tax dollars are now buying votes – List of companies and candidates they support

There is of course times when overwhelming money on one side can be beaten. What you need is a message and a reasonable amount of financing to get the message out. Here’s a message and a negative add that works, by a candidate ahead in the polls. His opponent Meg Whitman has spent a record in campaign spending for a Senate seat yet Jerry Brown is ahead because of his message and adds like THIS When you go negative use humor.

Complete fun is Hitler Finds out “governor Moonbeam” Jerry Brown is running for governor –  The Hitler series of videos is outrageously funny and thanks to :) D for sending them in.

The trend – The 2010 elections are part of a bigger trend that has endured throughout history. A minority of wealthy individuals centralize or accumulate power and working people eventually realize they are better off with a democracy that gives them and their families a better opportunity. Our trend in the USA  over decades has been toward a wealthy oligarchy. The lobbyists that control Washington are tightening their grip.

Ironically, much of the other 96% of the worlds populations are growing in a different direction. Look at Brazil right now with the lowest unemployment ever and a government that has spread the wealth to its working class. Working people are gaining power and money is flowing in a flourishing capitalist systems.

The pendulum of this trend swings back and forth.

(Tomorrow US Elections -Down and Dirty)

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!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Index Percentage Volume
Dow -0.13% down
NASDQ +0.80% down
S&P +0.24% down
Russell 2000 +0.76% -

Technicals, Fundamentals & Analysis

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

US Stock Markets -

The dollar went nowhere in light volume (See UUP & USD below). So stocks went nowhere in light volume.

Good earning are getting sold into or the stock are only going up slightly. This suggests the rally may have run out of some steam in the middle of earnings season.

But all eyes are on the dollar.

If you’d like to know more about the dollar and its inverse relationship to stocks and commodities check here & here

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar rose an insignificant +0.06% Friday. Dollar currently moving sideways within a range (see below) Trend for stocks = Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Rose a minor +0.26% Friday. BDI now consolidating after bull run that began in June. Longer term Pattern= Bullish/Neutral
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Rose slightly to -1.14 yesterday. Lot of room to move both higher and lower. Location= NEUTRAL

Reading Tea Leaves.

The Dollar War mentioned Friday continues, but both sides took a holiday on Friday. Best read is nothing happens till, the elections, the Fed Meeting, or some pronouncement about QE2 (QE2 = The Fed printing and dumping more $ into economy.

UUP the dollar tracking ETF continues to be the index to watch.

Any move in UUP above 22.7 resistance is trouble for stocks. Any move below 22.18 support level is good for stocks. A breakout of either the support or resistance level will tell you who wins the dollar war. UUP at 22.47

Longer term depends on which way the dollar breaks (breaks support of resistance)

Shorter term we could drift up in stocks as long as dollar remains flat.

Here’s a chart showing the inverse relationship between the S&P 500 and the US dollar

Black line is the S&P and candlestick chart the dollar

Positions

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

(I do manage 6 accounts that have other positions)

  • EWS (Singapore)
  • SSO (2x what S&P does)

Not making any specific move until dollar breaks out of its range. I would look at a breakout higher for the dollar, and a corresponding fall in stocks and the MO to oversold as a buying opportunity for long term investors.

Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including ”YOUR Stock List.

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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October 24, 2010

The Truth and It Hurts

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

The Truth & It Hurts

How the rest of World reports a story – WikiLeak’s on Iraq war -

Iraqi Father and Daughter

On Friday at 5:00EST the largest leak of classified military documents ever was realeased on the Iraq war by WikiLeaks. They covered the Iraq war from 2004 to 2009. Here’s WikiLeaks war logs referenced & outline (400,000 classified documents to browse)

This is the major international headline throughout most of the world. Our media (covers only 4% of the world’s 7 billion people) as you might guess is downplaying this document dump with – other data, stories, personal life of Wikileak founder etc..

So, since you get those sources, lets look at what the rest of the world sees and reads

These are 4 of the 5 (The last was the NYT) that were given the documents in advance. You can’t deny what Sec. of State Clinton said in condemnation - in the most clear terms… the disclosure of any classified information that will put the lives of Americans and others at risk.”

Some rather obvious observations

  • The extent of torture, war Crimes, murders, civilian deaths were far greater than originally reported in Iraq.
  • Dehumanizing the other side is pretty standard in war, but 96% of the world that’s not American gets to see the Muslim parents and children suffer. Most American’s  don’t.
  • The single largest cause of creating  Islamic terrorism since 2003 has been the “unjust” (word of UN secretary General) invasion of Iraq & war on terrorism

American (including me) will go back to our football games, digesting political fabrications, and our lives. But Remember YOU are paying for all this.

The father, brother, son, daughter, relative or friend of those who are murdered, tortured raped and assaulted can and do turn into tomorrow’s terrorist.

How would YOU react if it was your child???


Photos from IrregularTimes.com


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October 22, 2010

The Dollar War

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

Pop Quiz Time

Question - In Europe, which has a much greater Muslim population than the USA, what percentage of the acts of political terror were committed by Islamic fundamentalists between 2006 through 2008?

Can YOU come within 10% of the answer?

While your thinking… Here a fun video of the Obama Presidency put to music

???????

???????

???????

And the Answer is 99.6% are NOT Muslim terrorists.

A Europole Report says only 0.4% are Islamic terrorists. The vast majority of terrorist acts in Europe are committed by “separatists.” For a further analysis including FBI stats on the USA (can you guess the amount here?)and links to similar data see Loonwatch.com

barchart-copy

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!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Index Percentage Volume
Dow +0.35% down
NASDQ +0.09% up
S&P +0.18% down
Russell 2000 -0.57% -

Technicals, Fundamentals & Analysis

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

US Stock Markets -

See The Dollar War below for more.

The #1 tech stock AAPL fell slightly (-0.33%)still in middle of range.

Mortgage/Foreclosure crisis giant BAC got whacked again (-3.32%)

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar rose +0.32% yesterday. (More below in Tea Leaves Section) Dollar currently moving sideways  Trend for stocks = Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Fell a minor -0.33% yesterday. BDI now consolidating after bull run that began in June. Slight 5 day decline. Longer term Pattern= Bullish/Neutral
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Fell slightly to -7.75 yesterday. Lot of room to move both higher and lower. Location= NEUTRAL

Reading Tea Leaves.

The Dollar War

Volume on the tracking stock for the dollar (UUP) has been three to four times its average for the last three days (4 of the last 5 days) Here’s a chart of the UUP The vertical lines on the bottom are volume.

Some entity(s) have stepped in and proclaimed that they were going to buy dollars in a big way whenever it fell below $77.00. The dollar is know at 77.42.

As explained earlier our Fed is printing and dumping money into the economy and this surplus relative to other currencies drives the dollar lower and has an inverse relationship with stocks, especially those that export.

I do not know who or what is on the bulls and bears side in this dollar war. However the dramatically increased volume shows that a major fight is going on.  Remember currency markets are much bigger than stock markets.

This also impacts commodities which usually move lower as the dollar rises.

I posted the following in the comments section of the blog yesterday -”UUP at 22.47 as I write. Up +0.40%,after being down to 22.30 in the AM. Any move above 22.7 resistance is trouble for stocks. Any move below 22.18 support level is good for stocks” A breakout of either the support or resistance level will tell you who wins the dollar war.

Right now, it looks like the dollar bulls have the upper hand in this war and that’s bearish for stocks. The amount of volume is very impressive. This usually means whichever sides wins, they will control momentum for some time. However the dollar bulls have yet to win.

There’s also a good chance that the dollar war could simply simmer (flatten out in price swings or in its trading range) till the Fed meets or the elections.


UUP continues to be the dollar tracking ETF to watch

Positions

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

(I do manage 6 accounts that have other positions)

  • EWS (Singapore)
  • SSO (2x what S&P does)

The dollar war is certainly reason to exercise some caution. I have a stop on the more speculative SSO at what I bought it for.

Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including “YOUR Stock List.”

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

—–

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October 21, 2010

Follow The Money

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

Follow The Money

A Short History

  • In the name of “Free markets” or crony/casino capitalism (don’t even think of regulating the giant companies because we will simply NOT steal the unguarded money laying on the table to crush our competitors & increase our wealth) and led by Alan Greenspan, congress deregulated the banking industry over a decade ago. (Lots of Dems and Reps. to blame)
  • Globalization was roaring – jobs once done in the USA were outsourced.
  • To make up for this loss of revenue/jobs/GDP growth, we over leveraged everything from our banking system to our personal lives for almost a decade. Huge debt is the result
  • In 2008 it all came crashing down as we stood at the brink of a second great depression. Alan Greenspan, the maestro himself, admitted  free markets or crony/casino capitalism could NOT regulate itself. Here’s a video of his testimony.
  • But Globalization still roars creating job growth abroad. American consumer starts to save a bit more. This increases unemployment even more.
  • Banking system and head bank (The Fed) stay in shadows and weak reform is instituted. Crony capitalism reemerges and screams/fear mongers about deficits they played a or the prime role in creating. (this is all pat of globalization megatrend)
  • Money is thrown at debt problem – TARP, Obama Stimulus, the Fed (The later is by far the biggest money thrower) and crisis temporarily averted, but crony/casino capitalists – the fox (a pun) – is still in charge of the hen house.
  • Americans realize risk (crony capitalism) is privatized and debt brought about by that risk (crony capitalists) is socialized. Americans are angry, outraged and confused but haven’t a clue as to how they got cheated.

The money juicing all this - In 2006 Charles Koch revealed he was a moving force behind the  crony/casino capitalism  movement. One of the Koch Brothers actually ran as an independent against Ronald Reagan.  One of the the best detailed, yet incomplete histories, of the wealthy oligarchy that is taking over the nation can be found at a blog called Think Progress. Link here & here (above phot from Think Progress)

YOUR Comments

Its settled - consensus – the Paladino emails are scum. You have bigger fish to fry and topics to discuss. I really hope his name is not mentioned again, except when he gets toasted in his election bid

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!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Index Percentage Volume
Dow +1.18% down
NASDQ +0.84% down
S&P +1.05% down
Russell 2000 +1.15% -

Technicals, Fundamentals & Analysis

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

US Stock Markets -

Back to the stock pattern we know so well – Stocks up and volume down. This pattern has worked for months. I was surprised fundamentally that China raising rates two days ago did not have a bigger effect, but yesterday is a sign that the old formula has returned.

Its hard to bet against any Fed manipulated market. The print and dump the money. Some of it finds its way into stocks and they go up. The Fed said it printed just a little yesterday. Enough to remind major players they were around. The opaque Fed has many was of injecting cash into the economic system – We will never know them because congresses attempt to audit the Fed went down in flames a few months ago.

Perhaps the only Dow stock that fell yesterday ) at @ 2:00PM EST it was the only one down) was BAC fell (-0.42%) The opaque shadow bank is feeling the heat from the new mortgage/foreclose crisis.

AAPL –  This is the leading American stock. Its built a short term range between @300 and 320. Yesterday it was up +0.34 and closed smack dab in middle of range at 310.53. As AAPL goes so go tech stocks

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar fell a massive -1.30% yesterday. This eliminated almost 80% of the titanic gains of the previous day. (More below in Tea Leaves section) Trend for stocks = Bearish/Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Fell a minor -0.55% yesterday. An 8 week bull run, then a two week fall. A very slight stutter and now moving up. Bullish trend starting to fade a bit, but still = Bullish
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Rose to -3.12 yesterday. Lot of room to move both higher and lower. Location= NEUTRAL

Reading Tea Leaves.

From yesterday – “A totally new element emerged from the #1 emerging market raising interest rates blew up the bullish pattern. After this settles the print and dump Fed will again take charge.” It looks like the quantitative easing and/0r the print and dump money is back dominating trading patterns. Earning & what China does will have an impact, but the Fed’s currency print and dump forces the dollar ( currency is a traded market many times larger than stocks)lower and stocks higher.

UUP continues to be the dollar tracking ETF to watch

Positions

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

(I do manage 6 accounts that have other positions)

  • EWS (Singapore)
  • SSO (2x what S&P does)

Going to add to positions today, hopefully on a dip. (see past Investors411 for options or look at Positions section of blog) I’d love the MO to be lower. Preferably at or near -60. But, it is to the benefit of both the High Frequency Traders (they make money with huge trades in microseconds) and the Fed to manipulate stocks higher.

  • The HFT’s are not going to kill the goose that lays golden eggs for them the stock market.
  • The opaque Fed actually  has the rough data on just how over leveraged the opaque shadow banks still are. The fact that the Fed is into QE 2 (QE 2 = the on the surface print and dump money – the rest is hidden and we really don’t know the grand total print and dump which is collectively easily in the trillions) says the shadows still need bailout protection.

Look for Paul R’s always enlightening comments on stocks (YOUR stock List can always be found in the POSITIONS section of blog) and sectors in the comments section.

One simple rule when investing in stocks/ETF’s that are trending higher. Do NOT by over extended stocks/ETF’s.

This is NOT an all clear signal. Use caution and if you can handle risk nibble.

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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October 20, 2010

China takes control

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

China Image from STA Travel

Will catch up on politics/Tea Party/ elections tomorrow. Meanwhile check out comments section of blog that has ongoing debates & information on this and stocks.

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!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Index Percentage Volume
Dow -1.48% up
NASDQ -1.76% up
S&P -1.59% up
Russell 2000 -2.59% -

Technicals, Fundamentals & Analysis

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

US Stock Markets -

Yesterday was a “classic distribution day” Stocks fell significantly, in increased, above average volume.- bearish signal.

The Fed money tree will still blossom (see yesterday’s update) But the China move caught everyone by surprise. (more on this elsewhere in today’s blog and comments sections)

BAC fell (-4.38%) to a new low for the year as a group of powerful players announced their intention to go after the company for big buck. Add this @ $50 billion to projected $100 120 billion losses. The foreclosure shadow bank crisis grows.

AAPL - Turned out better than first feared and was down on the day after announcing earnings -2.68%, not 4 or 5% that it was before markets opened.

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar rose a TITANIC +1.62% yesterday. Overall trend of falling dollar trend for US stocks is did get broken yesterday. Could be start of new trend. Because of Titanic move and previous three days moving higher a trend reversal to = Bearish/Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Fell a minor -0.44% yesterday. An 8 week bull run, then a two week fall. A very slight stutter and now moving up. Trend starting to fade, but still = Bullish
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Fell to -28.17 yesterday. Lot of room to move both higher and lower. Momentum is with the bears but location= NEUTRAL

Reading Tea Leaves.

Constant mantra at Investors411 over the last few months has been to watch the dollar and its tracking stock UUP. (+1.70 yesterday) Dollar up = stocks down. Remember stocks can go down much faster than they go up.

From yesterday – What to watch

  • Does BAC continue to stabilize and/or move higher. = NO bears rule
  • Does APPL after 4 to 5% early hit stabilize and/or move higher = Stabilizes/Neutral.
  • Key is still the dollar – tracking ETF is UUP = Bears Rule

Yesterday shortly after noon I issued the following statement in the comments section in response to one of YOUR emails Freaking sneaky.” China, in what has to be a co-ordinated move with our Fed, unexpectedly raised interest rates. This sent the dollar higher and stock lower. It also toasted gold. Nothing changes in the long term. More later – for now see LINK

We still have the Fed willing to print & dump money, but the China move will radically alter the situation for a while. China had not risen interest rates since 2007 and this move caught everyone with their pants down. People in short positions had to buy the stock or dollar to cover their losses before those losses became to sever. Therefore the market sank.

What worries investors is China embarking on an interest rate rising cycle. Probably not, but impossible to determine. Did China toss a monkey wrench into our young bull market?

From Yesterday – Best read of tea leaves is if foreclosure crisis couldn’t sink bulls, then AAPL earnings (maybe a bigger hit) will not sink bulls. Market is being manipulated by the Fed’s print and dump. As long as there is no end in sight for printing and dumping stock move higher. -A totally new element emerged from the #1 emerging market raising interest rates blew up the bullish pattern. After this settles the print and dump Fed will again take charge.

Bottom LineChina takes control of worldwide markets. China moves and the whole world reacts. Time was only the USA had that kind of economic power.

Long Term TrendEconomic balance of power is shifting

Positions

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

(I do manage 6 accounts that have other positions)

  • EWS (Singapore)
  • USO (price of oil/commodity). Got stopped out of  the second 1/2 of the USO at 35.20 for @ +7% gain
  • SSO (2x what S&P does) – Got stopped out/sold at 41.51 for 9+% gain. Bought back in (same amount) at  40. 90. Right now this is a trade with a real short stop.

Wish these had become longer term positions than a few weeks to a month. Very sorry to get stopped out, but that’s life.

Paul R reports that YOUR stock list has improved +21.17% since Aug. 3rd. See Comments section of blog.

Going to give markets another day to settle before thinking about buying. Lets see if we can get an MO that says markets are oversold or approaching that before investing or trading.

Once earnings season winds down, will think about a new stock list which is built on the old one.

Look for Paul R’s always enlightening comments on stocks and sectors in the comments section.

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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October 19, 2010

Print and Dump

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

Couldn’t find a dump truck, but money tree will do

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!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Index Percentage Volume
Dow +0.73% down
NASDQ +0.48% down
S&P +0.72% down
Russell 2000 +0.99% -

Technicals, Fundamentals & Analysis

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

US Stock Markets -

An army of editorials Monday from Wall Street insiders say the mortgage/foreclosure crisis for shadow banks is “large but manageable.” ($100 to 120 billion cost figure was used as an estimate) In fact, BAC has partly dropped moratorium on some foreclosures. These editorials into the opaque world of shadow financials have seemingly calmed investors and the #1 mortgage bank (BAC) after a 10+% loss the last few days rose +3.01% in huge but decreased volume.

The Fed does what its done for well over a month and manipulated the US stocks by injecting $6.2 billion into the economy through the POMO program.  This figure has grown in recent days. The dollar rally died and stocks rose. If shadow financials are getting injections of cash like this its hard to see any crisis hurt their bottom line.

AAPL had another well above average earning report. As predicted, after up 10 days in a row investors sold the news in after hours trading and the stock was down about -5%. Apple is so big it makes up 24% of the NASDQ.

So look for a hit in techs early today. Right now it looks like NASDQ will be down -1.5% at the open.

Markets have seemingly absorbed the hit to shadow banks and will probably absorb the hit to AAPL. The quicker that happens the more bullish for the markets. Obviously stock to watch is AAPL today.

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar fell -0.14% yesterday. The inverse correlation is not always perfect. A big move higher in AM was crushed. Overall trend of falling dollar trend for US stocks is = Bullish
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Fell a very minor-0.22% yesterday. An 8 week bull run, then a two week fall. A very slight stutter and now moving up. Trend  = Bullish
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Rose to +10.50 yesterday. Lot of room to move both higher and lower. Momentum is with the stock bulls but location= NEUTRAL

Reading Tea Leaves.

Chaos has been restored by the Fed backing up the dump truck of freshly minted cash and dumping. This reminds everyone from Investors to High Frequency Traders the Fed is going to print and dump, print and dump, print and dump

The MO is in neutral so there’s room to buy the dip, of a rally.

Obvious end game of printing and duping money is INFLATION.  The play investors have made to diversify and protect against inflation is into commodities like gold.

What to watch –  For Bulls -

  • Does BAC continue to stabilize and/or move higher.
  • Does APPL after 4 to 5% early hit stabilize and/or move higher.
  • Key is still the dollar – tracking ETF is UUP

Best read of tea leaves is if foreclosure crisis couldn’t sink bulls, then AAPL earnings (maybe a bigger hit) will not sink bulls. Market is being manipulated by the Fed’s print and dump. As long as there is no end in sight for printing and dumping stock move higher.

Positions

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

(I do manage 6 accounts that have other positions)

  • EWS (Singapore)
  • USO (price of oil/commodity).
  • SSO (2x what S&P does) – Tightened stop and may sell/take profit today.

Buying dips in gold, oil, and recommended stocks still a viable option for both Traders and Investors. Commodities like gold and oil also give you diversity.

We should see a dip this AM. Perhaps throughout the day. Perhaps longer. But as long as the Money Tree at the Fed keeps growing or the Dump truck keeps dumping bulls should rule.

Any of the above are decent plays along with recommended ETF’s and stocks.  As PAUL constantly & The Critic on AAPL, reminds – don’t go chasing those stocks that have soared too far above their 50 day moving average.

Investors411 chief strategy is to look for equities that are trending higher, then consolidating (buy the dip) before the next move up

Look for Paul R’s always enlightening comments on stocks and sectors in the comments section.

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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