Jeremy Irons as one of the Borgias

Banker and Pope

AAA Bonds

The US and the world desperately need credible lending and rating agencies. If there are no rules, regulators, and transparency then sooner rather than later you have a meltdown.

The latest - When Credit Rating Agencies Lose Their Meaning - from Bloomberg/Businessweek.

Subprime loans have a AAA credit rating and the USA (who can get an unbelievable low 2% for 10 year treasury bill) gets downgraded. Why? – Hint – Credit agencies major source of funding is, of course, shadow banking sector.

Obama’s Job’s Speech

Long long, long, overdue. Instead, Obama’s's let the Republicans set the agenda – Contract government.

One hope – That this is a big bold jobs speech. More later.

_________________

KISS & Stocks

(Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Index Percentage Volume
Dow -2.20% low
NASDQ -2.58% low
S&P 500 -2.53% low
Russell 2000 -3.61% -

_______________

Market Analysis

Focus on TechnicalsFundamentalsHFT’s

Shorter Term Outlook.

day/days/week

  • Stocks have fallen significantly in low volume for the last two trading days.  A sure sign that HFT’s are manipulation stocks.
  • Reality - If you are a short term trader, you are going to have to come to terms with understanding what HFT’s do (see last weeks blog posts for a start) The wild volume swing are HFT’s feeding grounds. BIG low volume price moves are now the rule rather than the exception. As long as HFT’s dominate there is going to be many more wild, over exaggerated volume swings because that’s how they make $$$
  • RepeatTechnically we have formed a double bottom for most major indexes Now major indexes have formed short term higher highs. (see charts of major indexes on right side of blog). Traditional technical analysis says this is bullish. In the short term technical analysts were  dead WRONG. Fundamentals control what’s happening in the long run and the HFT are dominating stocks technically.

Investors411 Technical Forecasting Tools.

  • The PCR rose to 1.44 (Above 1.00 is Bullish and below Bearish)(last two years the highest for PCR is @1.50 and lowest @0.60) For more information on PCR LINK Since the PCR is new we’ll work refining how to better read this chart. A 1.44 figure = Bullish

The McClellan Oscillator

  • (MO) Fell from +85.84 Wed, night to +10.17 (Rough estimates =-30 somewhat oversold, -60 oversold, -90 OMG oversold)( +30 somewhat overbought, +60 overbought and +90 OMG overboughtThis (+85.84) is about as high as the MO has risen in last two years (One time higher) Strong indication that the bullish trend for US stocks is worn out. The MO has once again been amazingly accurate is predicting a major high. Today’s MO +10 = Neutral

___________________

Reading The Tea Leaves

From last Thursday - Short term nod to bears, but bulls still in charge of longer term technical trend. it looks like so many HFT’s/pros/programed traders are going short (buying puts at an ultra high 1.44% ratio to calls on the P/CR) that we are running out of put buyers.

Therefore, today’s early meltdown should see a bottom if the number of puts grow. (Short term traders can watch the put/call levels daily, through your broker or trading platform. Simply watch a major US indexes number of puts and calls.  If the puts numbers increase dramatically we should see at least a short term bottom) So strong chance of  at least a short term rebound late today/tomorrow.  This would be a technical adjustment.

Fundamentals rule and if Europe is melting down then everyone suffers. German market is key to watch. Down 5% yesterday, but up +0.71 at 7:30 EST.

Longer Term Outlook

month, months,

  • Repeat Same old mantra May 20th forecast still stands. The May 20th summer forecast has come to pass and now we wait to see the Fed’s next move. Add to this Europe is a whole lot worse than previously thought back in May. For the Fed to act significantly – inject more liquidity – I’m afraid we need to see stocks do worse.

________________

Paul’s Corner

A yo-yo market it is and tough to hold ANY stock!  Bloodshed in Europe markets Monday adds to the dangers of this market.  My good friend Ian Woodward has given us several great blog posts these past few days, here is his latest and what to watch for this coming week.

Link

Ian starts this latest blog with the snakes and ladder  chart and let me warn you when he comes up this chart it’s his stern warning not to play in this market!

I only read a few blogs and one of my favorites is by Dave Steckler, he specializes in ETF’s. Dave is hosting a HGSI webinar Wednesday evening Sept 7 and should be very interesting.

Dave Steckler, author of the investing blog, www.etfroundup.com, and long time HGSI user, will lever the new ETF component capability of HGS Investor Version 8 in his presentation, “Creating Composite Indexes with ETFs.”  Dave will introduce the various indexes he has created, demonstrate how he created them and how he trades with them.  The webinar will also describe how Dave created the charts he uses, which incorporate Bollinger Bands and the Tsunami Indicator. Time will be alloted for Q&A.

Dave is a former member and past president of the American Association of Professional Technical Analysts (AAPTA) and a former member of the Market Technicians Association (MTA).

Registration Link

Not a great time to post watch lists, but here is  my current  list. Most were selected from chart action, basic fundamentals and technicals. A few are there cause I like the company. Note just because a company is on this list doesn’t mean it’s worth buying.

AKRX,ARMH,AZO,AXTI,BGS,BRFS,BIP,COG,CATM,CPHD,CF,CMG,KO,CROX,CVV,RJA,EOG,GMCR,GPOR,JAZZ,KCI,LXU,LULU,MOO,

MJN,MPEL,MRGE,NLC,NFLX,PSMT,RNOW,RES,SPRD,TSCO,ZAGG

Disclaimer: I trust you are all safely in cash and NOT fooling around in this market!


_______________

Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500

LONGER TERM POSITIONS

See POSITIONS Section of blog for more on YSL#5.(scroll to bottom)

Until the Fed makes a commitment to more liquidity, its hard to add any unprotected log position other than buying GLD on dip.

NLY - Annaly Capital Mgt. Ultra high dividend stock –a 14% dividend

I still have a Put position to protect NLY. (strike price $17.00 for 3rd Friday in Sept) Also puts on other dividend stocks.

GLD – (Long Gold ETF)  Bought at 167.05 last week – a half position. GLD closed yesterday at 183.24% Stop/loss on GLD at 168. @+9%

Disclaimer Personally I own  a group of dividend stocks including NLY, SNH, KMP, MO, HTD, ABV & AGNC and a few other smaller positions I have puts on over half of dividend stocks I own. I also own TZA & SDS (3x & 2X short ETF’s) I buy everything in the hypothetical Investors411 portfolio. I will be purchasing additional YSL #5 stocks when we have a lower MO.

_______________

Long Term Outlook

(for US stocks)

The most important  foreseeable fundamental factor in determining the log term outlook is what The Fed (Bernanke) does to impact money supply (example – a new QE#3)

NEUTRAL*

*Investors411 has 5 different long term valuations - BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, and BEARISH.

* Everything written in BROWN is a repeat from a previous day

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

  • Share/Save/Bookmark