Investors 411 Blog

by Barr Jozwicki
June 28, 2012

Bankstas At War

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

.

The International Banking

Cartel’s War on You

.

.

“There’s vast criminality in Wall Street now.


It’s bribery, theft, fraud,
bid rigging, price fixing,


gambling, loan sharking.
All of these things,


it’s all organized.” - MATT TAIBBI

.

Today’s Headlines

.

.

.

Headline NYT Today

“Trading Losses at JPM

could exceed $9 billion

.

.

The “Too Big to Fail”

Cartel/Oligopoly

Caught in another

Skimming operation

.

Barclays

(Britain too big to fail banksta)

Fined $450 million in LIBOR

Price Fixing operation

20+ other bankstas involved.

(Of Course JPM is one)

..

Why it matters

.

The importance of Libor

is hard to overstate.

.

“They are used to value of hundreds of trillions of dollars of financial instruments. Or as Matt Levine puts it, they “set the rates on pretty much all the loans and swaps in the world … CFTC order mentions $350 trillion of [over-the-counter] swaps, $10 trillion of loans, and $437 trillion of CME eurodollar contracts indexed to Libor alone”. Ben Walsh

.

********************

.

STOCKS

.

.

.

Paul’s Corner

.

.


Last evening I had the time to join in with  the HGSI users virtual market discussions.

These are a group of investors who meet on the computer to discuss the market. Most of the members are in cash as I am and feel this market is too shaky to safely invest in.

The market was looking promising late last week but has fallen back into the choppy zone.

.

Ian Woodward posted another great blog

late last evening and is a must read.

.

http://www.highgrowthstock.com…

.

Ian sums it up nicely

in the following chart:

.

http://www.highgrowthstock.com…

.

Last week we did have two Eurekas and a Kahuna, but look on the lower right of the chart at the orange bar, that’s  a Phoenix (opposite of a Eureka) and a Phoenix usually cancels the Eurekas.


http://www.highgrowthstock.com…

.

Looking at the charts last evening I didn’t find much to consider buying and found many of the cha cha cha stocks had profit taking.

As Barr often reminds us there is nothing wrong with taking profits, let me suggest there is nothing wrong with missing the market bottom.

.

******************

.

.

.

Long Term Outlook

.

CAUTIOUSLY BEARISH

.

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK & POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMMAR  ERRORS.

.

.




.

.

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June 26, 2012

The Mafia State

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

The Mafia State;

Banks Owning Government

.

Image Victor Juhasz/Rolling Stone

“There’s vast criminality


in Wall Street now.


It’s bribery, theft, fraud,


bid rigging, price fixing,


gambling, loan sharking.


All of these things,


it’s all organized.”


MATT TAIBBI

________

.

STEP ONE

Banksters/ Vampire Squids

Buy the Government

.

.

OpenSecrets.com

Lists US politicians campaign contributors

Let’s focus just on the heads of the Banking Committee

in the Senate and House

Spenser Bachus R

Tim Johnson D

.

Their largest campaign contributors

are all

Bankstas

.

We all remember 2008

[Investors411 2/27, 28, & 29]

Profits Bonuses & Bailouts

all went to the Bankstas



.

But Bankstas became far more than

America’s Biggest

Welfare Queens

..

“Finance & the Mafia State”

The Above is a Link to a Yves Smith Editorial

from her highly rated blog Naked Capitalism

.

.

The Mafia buys the Cops,

Bankstas buy the

Government

.

Focus – JPM the biggest,

too big to fail,

casino gambler of derivatives

__________

.

  • All 411 readers have read George’s story of  a bank’s illegal break in, theft and destruction of property at his home.

.

JPM CEO

Jamie Dimon

AKA

“Diamond Jim”

.

.

Jamie Dimon

has sat on Board of Directors of

NY FED since 2007-

.

  • Since 2007 – The Fed has provided JPM with $391 billion in assistance
  • FED also provided JPM with $29 billion to buy another troubled investment bank, Bear Sterns

.

It Gets worse

.

.

“The Scams Wall Street Learned

from the Mafia”

link to Rolling Stone article


Imagine a Welfare Queen who abuses/steals from the food stamp program – She goes to jail and/or looses her right to food stamps.

.

But the Bankstas, like JPM,

for decades have

never gone to jail.

.

  • Foreclosed on soldiers while they were fighting in Iraq – No Problem
  • $228 million fine for bond bid riggings – No problem
  • $153 million fine for fraud in CDO trades – No Problem
  • $700 millions in Jefferson County municipial bid rigging/toxic swaps – No Problem
  • 33 million pound “record fine” – failing to keep client’s money separate from their own - No Problem
  • 450 thousand pound fine - JPM global equity chair fined for passing on inside information – No Problem

.

If this is just what JPM

is getting their wrist’s slap for.

Imagine what

they are getting away with

.

For more see Bill Moyers

Interview

with Yves Smith & Matt Taibbi

discussing the too big to fail bank,

JPMorgan

.

The Best interview of the year!

.

Finis




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June 22, 2012

Dog House

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

.

I hope to be adding to this post

later today

.

Mea Culpa

Editor in Dog House

.

.

As Jim J points out

in Comment Section

Yesterday I ignored


The McClellan Oscillator

“Our #1 Forecasting tool”


.

Oops

Find out more on the MO in the

STRATEGY Section

[scroll down]

[STRATEGY Section located on top banner of blog]

.

General guidelines

.

  • Oversold conditions = ( @-30 moderately oversold, -60 oversold, -90 OMG oversold) = buy
  • Overbought positions (@+ +30 moderately overbought, +60 overbought, +80 OMG overbought) = sell

Nothing’s Perfect. The MO [LINK] has been amazingly accurate in picking highs and lows, especially at OMG oversold and overbought levels. Last time was an example of the MO not being perfect (nothing is).

The MO hit its last OMG low [LINK] (Below -90) on May 18th. A signal to BUY. The S&P 500 [LINK] did go a bit more than 2% lower, before rocketing up from low of @1260 to the OMG MO High (it was over +82)  of @ 1360 two days ago.

The +82 is a signal that its going to be very hard for stocks to go higher.

.

Usually when we reach the OMG

oversold or overbought levels

the  S&P moves at least 5%

in the opposite direction

before changing.

.

All technical indicators are guidelines, not absolutes and can be trumped by fundamental events.  Remember how a exceptionally good or bad earnings report can obliterate any technical stock pattern.

Bottom Line – My bad. – The McCellan Oscillator should never be the ONLY technical tool. Other technical tools are important. So are fundamentals and how investors, traders and manipulators react to fundamental news,  But  the MO does work pretty well.

.

Right now its telling us to

expect at least a 5% drop

before a 5% rally on

the S&P 500

&

June 19th was a time

to sell or short

.

*****************

.

STOCKS

.

.

Both the S&P and NASDQ took out some pretty important technical levels yesterday.  I do think the bulls have some moxie left in the tank and will fight (see yesterday’s 411 on stocks)

.

Long Term Outlook

next 3 months

.

NEUTRAL/

CAUTIOUSLY BEARISH

.

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK & POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMMAR  ERRORS.

.




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June 21, 2012

YOUR Stock List wins again

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

.

“The Great Latvia

Success Story”

.

.

LINK

to 1 minute 27 sec.

comedy video

.

AUSTERITY

WORKING?

.

Latvia, unlike other countries

[scroll down at link for this chart]

may have found a solution

.

Finally a country

where Tea Party styled

mandated austerity

has NOT lead to

has led to  a massive growth

in unemployment

.

Latvia’s unique solution

.

********************

.

YOUR Stock List

.

.

Paul

.

.

has published the results

of the latest

YOUR Stock List

in the comments section of the blog.

.

The YSL’s started in April & May are

both outperforming the S&P 500

.

LINK

.

Kudos

to all of you who helped

create the list and share investment

ideas in the comment section

of the blog

.

*****************


JPM & Kleptocracy

Fat Cat Bankers

.

.

An excellent and informative

debate on JPM in comment section

LINK [scroll down]

who may have taken over the spot

as head vampire squid from GS

.

.

More on this in the next

411

.

*******************

.

STOCKS.

.

.

Stimulus Works

.

FED announcement of continuing “Operation Twist” till end of year,

ECB’s $125 billion to Spain,

and rumors of more stimulus from Central Banks

is forcing

HOT MONEY

[NB -If you invest or trade the markets you must

know what "HOT MONEY" means and learn to

follow its flow]

to find a place to go

where the interest rate

isn’t near zero.

.

That place is the

Stock Market

Our Spanish 10 year bond, after several months as an accurate forecasting tool, stumbled last week.

Still  the bond rate is falling significantly this AM ( Down 3.22% to 6.53% at 8:00 EDT) = Short term Bullish

.

Spanish 10 year bond yield link

.

Longer Term Outlook

3 months+

.

NEUTRAL

.

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK & POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMMAR  ERRORS.

as head .

..



.



.



.



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June 16, 2012

One Minute to Midnight

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

.

Did YOU ever think

your fellow Americans

would approve of a

Macow gambling magnet

buying

YOUR Democracy?

.

.

Sheldon Adelson

$35 million so far, next

$100 million and now

“Limitless”

.

In Syria, Iran, Russia

and other so called

Democracies

We label the Plutocrats

who buy/finance the so

called “President” as

.

EVIL

.

In the US a

Plutocrat/Gambling czar

who wants to buy a

President

is a Businessman

and business is worshiped

by many Americans

.

_____________

.

JPMorgan’s

CEO Jamie Dimon

went in front of congress

for a massive

“trading loss”

/

.

Politicians from all sides

“Groveled” *

in front of a

“corporate overlord”

.;

Many have enjoyed

the CEO’s $$$


.

.

The Hidden Story is

the constant

revolving door between

Government, The Fed and

our Corporate masters

.

$4,000,000,000,000

.

That’s how much

Jamie Dimon &

17 other CEO’s received

in (near 0% interest) loans

from our Fed Reserve

.

.

Those 18 CEO’s first

WORKED

for the FED before

getting the $4 trillion

The LIST


.

*******************

.

“One Minute To Midnight

For Democracy”

.

.

“This Time Europe

Really is on the Brink”

.

Only a few economists

predicted the 2008

financial Meltdown:

.

Roubini and Ferguson’s

ominous editorial

against imposing austerity

on Europeans

..

LINK to results of

4 years of austerity in

Portugal, Ireland, Spain,

Greece, and Italy

.

Plunging GDP &

Employment

.

Another chart below

on the future AUSTERITY

brings

.

.

Romney’s economist

Glenn Hubbard takes

the Banksta’s side

In Germany’s WSJ

.

_____________

.

Big Victory

For Banksta’s

Basel III

.

.

Basel III was supposed

to give the world

better banking regulations

NB – In cartoon –

Same casino capitalism reference to Las Vegas

.

******************

.

Democracy in Europe

and the USA

is getting shredded

.

The middle class

is evaporating

.

Latest – Between 2007 & 2010

median income dropped from

$49,600 to $45,800 in the USA

.

Bankstas get the Gain

You get the Pain

.


.

*Many thanks to Jim J for the Heads up on the Matt Taibbi editorial

FINIS

..




.

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June 11, 2012

Cavalry to the Rescue?

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

.

Cavalry To the Rescue?

.

.

Mea Culpa

Sunday’s blog focused on the negatives

surrounding the Massive $126 billion ECB

Spanish bailout with just a postscript of what

should happen to stocks =

Major Rally

.

Charge

.

.

  • The $126 Billion dwarfs the size of the 2008 US bank bailout, if you consider Spain’s 1/10th the economic size of the USA
  • The far more than expected $$$ shows the ECB will do whatever it takes to keep Spain in the ECB.
  • Spain (GDP) is almost 5 times larger than Greece and, therefore, far more important
  • NO AUSTERITY Measures were made as conditions for the loan. The ECB finally seems to understand…

.

The Clear and present Danger

to  economic recovery is

[US Tea Party agenda]

.

AUSTERITY

.

.

Austerity Creates Unemployment

The more sever the cuts the greater the unemployment

.

It’s impossible for a country with

growing joblessness

to sustain an economic recovery

[Exception - If you do have a growing plutocracy

they could pay down the debt]

Chance of this – When hell Freezes Over

.

.

*********************

.

Worshiping The Wealthy

.

THE MYTH

Giving rich people your money

will make you wealthy

.

Nick Hanauer

Part 2 – See part 1 here

.

..

Click on Photo for link to an

Outstanding

short video on

Job Creation

.

Follow up to YOUR

comments and questions

on the Video

.

Why Cutting Taxes for

the Middle Class – CUSTOMERS

Creates far more

Jobs & revenue

that Cutting Taxes for a

plutocrat

.

Take 300 middle class families Making $ 65,000 a year. @$20,000,000.

Their money flows. They spend it on the plumber, groceries, gas, home repairs, baby sitters. Almost all their money goes quickly and directly back into the economy and this creates JOBS. Say 90% goes directly into job creation

Take the Plutocrat who makes $ @20,000,000 a year

Their money stagnates. They invest it in currencies, stocks (High Frequency Trades, Hedge Funds, Swiss Bank accounts) etc. A Far smaller portion of their money flows directly into the economy. Say 10% goes directly into job creation.

If the Plutocrat earns his money through Investments he/she/Romney is taxed far less than those who work.

We, therefore, punish workers and reward plutocrats who sit on their stagnant money.  Our government also collects far less revenue from the single plutocrat than the 300 middle class workers.


.

*******************

.

STOCKS

.

What started out as a massive rally in Europe (Up over 2%), is fizzling as surprisingly, after opening lower -

.

Spanish Bond yields are rising

.

Spanish 10 year bond at

6.40% at 8:00 AM EST

.

Still on cusp of change to NEUTRAL – Spanish bond would have to close below 6.25% and/or below Friday’s low for a change to NEUTRAL.

.

Reading Tea Leaves

Is $126 Billion too small?


.


Longer Term Outlook

3 months+

.

NEUTRAL/

CAUTIOUSLY BEARISH

.

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK & POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMMAR  ERRORS.







.

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June 10, 2012

Privatize Gains/Socialize losses

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

.

Yogi Berra

.

Deja Vu

All Over Again

.

.

$126 Billion Spanish

Bailout

.

The US economy’s GDP

is over 10X

Larger than Spain’s.

Therefore, relatively, this is an

.

OMG massive

$1.26 Trillion Bailout

.

Ours was mere $700 billion.

.

____________

.

Banksters

..

Privatizing Gains

Socializing Risk

in Spain

.

.

When Eurozone was Introduced the regulators

allowed banks to buy unlimited amounts

of government bonds

without setting aside any equity capital”

.

Sound Familiar?

In 2004 our SEC allowed US Banks

to become massively over leveraged too.

.

Banksters didn’t care. They could

extract money from bundled loans

and profit by selling them on the

opaque derivatives market

.

_____________

.


411′s Most used image of

Banksters

The Vampire Squid

.

.

The Truth

Whose Really Getting

Bailed Out

.



Banksters & Plutocrats

across the world

get Bailed out

.

But since the derivatives

market is opaque,

who knows?

.

____________

.

Spain’s

Housing/Financial Bubble

began to pop in 2007/2008

just like the USA.

.

AUSTERITY

[Cut spending, No bailout for middle class, Raise taxes]

was introduced as the solution

the result -

Job loss, recession and

worse yet to come

.

.

Small consolation -

At least, now, the ECB

is demanding NO new

AUSTERITY

measures with this bailout

.

Spain, has already been

driven onto poverty.

Unemployment has

already gone from

8% to 24+%

.

.

Postscript

.

Obama is NOT a

Teddy Roosevelt -

A President that stood

up to Plutocrats/Banksters

.

.

However, Obama did stimulate,

cut taxes and again forced an

additional payroll tax cut.

.

Imagine if

we followed Austerity

instead of Stimulus

.

Our unemployment has NOT

exploded from 8% to 24%

.

For a Real SOLUTION

see Robert H’s

editorial/comment

.

Obviously, we should see

major worldwide stock

rallies

Monday


Finis



.


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June 8, 2012

1% get 93%

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , , ,
.
Income Inequality
.
.
“2009-2010, the top 1%
.
of US income earners captured
.
93% of the income growth”
.

.
.
.
“America has become a country
.
not “with justice for all,”
.
but rather with favoritism for the rich
,
and justice for those who can afford it
,
– so evident in the foreclosure crisis,
,
in which the big banks believed
.
that they were too big not only to fail,
.
but also to be held accountable.”
.
.
Nobel Prize Winner
.
.
.
******************
.
.
Yankee Bob’s
.

.
The Rifleman, the Virginian, Bonanza, The Big Valley or a number of other Westerns, where a small town where a small town newspaper editor, by himself would take on and defeat Big Vested interests…
.
.
.
********************
.
.
.
Please, Just do what

Ronald Reagan did & his top

economist Milton Friedman

recommends – Stimulate
.
.
LINK to Krugman editorial
.
(See Monday’s 411 for Friedman recommendation)
.
.
The Money Quote
.
.
“As many economists have pointed out,
.
America is currently suffering from
.
a classic case of
.
debt deflation:
all across the economy people are
.
trying to pay down debt by
.
slashing spending,
.
but, in so doing,
.
they are causing a depression
.
that makes their debt problems
.
even worse.”
.
.
******************
.
China’s Growth
.
.

.
.
6 Charts all showing

a slowdown

in China’s Growth

(See Link above for more)

.
Across the world

when Economic times get tough

You do NOT impose

AUSTERITY

You STIMULATE the Economy
.
Exception -

USA’s Right wing austerity dogma
.

  • Major news from China is surprise [STIMULUS] interest rate cut. Short term juice for stocks but Long term = Chinese economic slowdownBearish
  • Repeat – “411 currently uses the yield of the 10 year Spanish bond as a leading indicator of market direction – Our canary in a Coal mine. - Bond yield up= stocks down”

Past quote on

Long Term Outlook

.

“No changes in LTO considered

till Spanish bonds at least close

below at 6.25%.

.

  • Let’s have  at least a 3 to 5 days of yields remaining below 6.25% before we upgrade to NEUTRAL.
  • The ugly Fundamental reality in Europe can overwhelm Central Bank intervention/manipulation.

.

Longer Term Outlook

3 months+

.

CAUTIOUSLY BEARISH/

NEUTRAL

.

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK & POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMMAR  ERRORS.

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June 6, 2012

PT Barnum

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

.

PT Barnum

.

“There’s A Sucker Born

Every Minute”

.

.

The genius of the right wing -

With enough spectacle and money

they can make you believe

.

Giving money to the rich

will make you richer

.

.

Example – Health Care

A Letter To the editor

.

_____________

Bravo Brookline. The most important news out of this Town Meeting is the cost savings Brookline achieved in health care insurance. This news should reverberate throughout the Commonwealth and the country. Why wasn’t this your front page story?

Brookline entered the state’s Group Insurance Commission in 2010 after years of unsustainable and skyrocketing heath care costs. Advisory Committee chair, Harry Bohrs announced a mere 2% aggregate cost increase this year even though the town increased its portion of premium payments from 75% to 82%.

Our town employees average premium has been reduced by $1100 for an individual and $2,200 for a family from FY 2009.

A recent Harvard University/ Boston Globe poll showed 63% supported MA’s public heath care, 21% opposed it. With results like Brookline’s, favorable poll numbers should soar. Municipalities across America should take note at what has happened in Brookline.

Bravo to all those who envisioned and worked on Brookline’s group health care plan.

Our problem is with national leadership. Why can’t they get the message out? After six years of careful scrutiny and periodic revisions, Brookline and Massachusetts has a heath care plan that’s something to shout about.

Joyce Jozwicki

Barr Jozwicki

TMM’s for Pct. 9

.

Brookline, Coolidge Corner

.

.

Reality – our state & our home town

have NOT achieved the cost savings

of other  major Democracies

in Health Care

.

But, overwhelmingly, MA endorses

its Public Heath Care System

that insures almost everyone

&

has started to reduce costs

.

The Problem

Few outside MA know

what we have achieved.

.

____________

.

*********************

.

“You can NOT

reduce the debt burden

by shrinking the economy,

only by growing your way out of it”

.

George Soros [LINK]

.

.

Old Cartoon when Merkel (Germany) ally

Sarkozy (France) was still in Power

still Valid

(Again they Forgot Ireland)

.

Working out some sort of

compromise

sooner rather than later

impacts everything from the

Obama’s election


to the future of Democracy

.

  • 411 uses the yield of the 10 year Spanish bond as a leading indicator of market direction – Our canary in a Coal mine. - Bond yield up= stocks down
  • Over the last 4 trading days the yield has fallen from a high of 6.66% to 6.26%.

.

A good technical trend

starts for Bulls

.

  • Some simple technical analysis of  the S10 shows a minor 6.31% support level broke and a more major support level at 6.08%.

.

No changes in LTO considered

till Spanish bonds at least close

below at 6.25%.

.

Longer Term Outlook

3 months+

.

CAUTIOUSLY BEARISH

.

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK & POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMMAR  ERRORS.

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June 4, 2012

Money Flows & Grows

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

.

Money Grows

When You know

How it Flows

.

.

The European Union

.

Andrea Merkel/Germany

.

.

.

Andrea Merle – NEIN

.

Andrea Merkel has said NEIN to any

compromises

that would allow the ECB

(European Central Bank)

to stimulate and rescue the EU, like our Fed.

See - Bernanke Hero/Villain

.

George Soros

[Left Wing]

on Euro crisis

&

3 Months to save the EURO

.

.

.

“You can NOT

reduce the debt burden

by shrinking the economy,

only by growing your way out of it”

.

Nobel Prize Winner

Milton Friedman

[Right Wing]

LINK

.

.

“buy long-term

government securities [today's QE]

and they can keep buying them

and providing high-powered money

until the high powered money starts

getting the economy

in an expansion.”

.

Even this President

Ronald Reagan

.

.

when confronted with a

minor Recession chose stimulus

He added more government jobs

.

.

Why doesn’t Austerity work when

a country/World is in recession

.

If you are having a tough time, you tighten your belt and spend less.

But what happens to a country where everyone tightens their belt?

Everyone spends less and the GDP goes down because no one is buying. Money stops flowing. Unemployment explodes higher and fewer are able to pay taxes.

.

No matter how angry you are at

those in debt or the banksters,

that anger just clouds your mind

.

The AUSTERITY Solution

to recover from a Recession

Does NOT work.

.

This is happening

throughout Europe

as the bankers/banksters/Merkel

who own the debt & derivatives

on the debt demand

only austerity.

.

********************

.

Paul’s Corner

.

.

You Were Warned!

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This Saturday in the comments section, I suggested y’all review Ron Brown’s Weekend Report. It’s an excellent review of the current market and Ron gave examples of simple chart actions that you should review and understand a head and shoulder top and the bear flag.

Ron’s Weekend Market Report:

Ron explained the head and shoulder chart formation and he shows the breakdown of the neck line on May 4, which was a nasty day in the market.

So, what does one bad day have to do with the value of my portfolio? Barr always suggests we buy the dip!

As we look back now, that break down through the neck line was a good warning and I’ll wager my 1 share of FB, the big boys were unloading stock from that point on. If you observe and understand a simple chart formation such as the head and shoulders top, next time you see one you might start protecting your portfolio!

After watching Ron’s movie, I took a look back at that May 4 date using my EdgeRater program to see what sort of warning shot we received.

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http://people.delphiforums.com/SNOTZALOT/may4kahunaresized.gif

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The top circled line in the chart shows how the various indexes, S&P 500, NYSE, Dow 30, etc. moved down roughly 30% down through their Bollinger Bands in one day, we had a Kahuna!.  My good friend Ian Woodward warns that when you have a Kahuna with a 3 bucket down day (down 30%) sit up and take notice! A -30% move down in the Bollinger Band is serious!

From Ian’s last blog:

Kahuna (Little and Big) The Kahuna indicator measures volatility and momentum by looking at the one-day change in %B. The Big Kahuna is a 1-day change in %B of plus/minus 0.40. A Little Kahuna is a 1-day change in %B of plus/minus 0.24. Big Kahunas are signs of strong momentum (either up or down) and work well with the Eureka signal to identify tops and bottoms.

In the comments section from May 7, I suggested a review of Ian’s blog from the evening before where he discussed in detail the previous Friday’s 30% decline in the indexes position in their Bollinger Bands. Please review this blog!


Ian’s May 7 Blog Link:

So, we had a major shot across the bow May 4 and what do we see this past Friday? Another red Kahuna! This one was not quite as strong as the May 4 Kahuna, but it’s still a major move not to be ignored.  As Ron suggests in his Weekend Report, this past Friday’s down volume wasn’t large enough to be considered a “bottom” in the market. (Good grief!)

So my friends we were warned a month ago, just by looking at the charts, gloom and doom were knocking at the door. The charts probably indicate we haven’t hit bottom, are you protecting your grandkids inheritance or have you purchased another bottle of Tums?

Breaking news, added Sunday evening, as one would expect, Ian spent Sunday writing a great blog discussing the state of the market and what to watch for. It’s a must read!

The rest is up to you depending on your stomach:  Foxhole, Short, Dabble, but wait for the QUALITY of the Bounce if you are already out, using these concepts to stay on the right side of the Market.  Don’t forget we need Eurekas and Kahunas to the upside. No excuse now after my last blog note of a Glossary of Terms used.

Ian’s Blog Sunday June  3:

Disclaimer, these comments were written Sunday morning and are intended for education only. As we all know, by the open Monday morning all bets and suggestions are off!

Tums?

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*********************

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Stock markets and Economies

are more

globalized  and interconnected

than ever

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The World’s Largest Economic Block

- The European Union –

is leading worldwide stocks lower.

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  • 411 uses the yield of the 10 year Spanish bond as a leading indicator of market direction – Our canary in a Coal mine. – Bond yield up = stocks down
  • On 3/2 Spanish bond hits a low of 4.87%, in mid April it tries to hold its 6.0% resistance level and in Early May breaks up through the 6.0% resistance. (see chart Below)
  • All major markets, that are interconnected through trading and especially banking, are fixated on Europe’s slow meltdown

No changes in LTO

till Spanish bonds close

below at 6.25%.

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Longer Term Outlook

3 months+

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CAUTIOUSLY BEARISH

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AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK & POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMMAR  ERRORS.



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