Oct 14th Investors411 Photo

Baby Bull Grows UP

Investors411 called this rally over a month ago

Lead by Emerging Market countries which broke out to new yearly highs  months ago,  US stocks , with the help of a falling dollar, TARP loans, stimulus money and quantitative easing (parts 1 &2) have developed the rally.  The major US indexes are within a few percentage point of reaching yearly highs.

Volume, which has long been AWOL in stocks has returned for the last two days. Not overwhelming volume, but enough to be encouraged.

Basically, Investors worldwide are starting to believe the globalized economic trends that existed previous to the 2008 meltdown are back in play. The US has moved higher like it did after the meltdown on cash injected into the economy. The Fed Chair Bernanke has promised more (See past blogs on QE 2)

Our baby bull has grown  up.

Foreclosures, Bubbles & Problems

Major Shadow Banks were down @ 4 to 5% yesterday on new foreclosure problems.

Once again, if you leave these crooks liars frauds unregulated and create no limiting laws they will screw YOU to the wall.  Now thousands of lawsuits are going to be brought by AG’s from 50 states because of an improper foreclosure system.

Yankee Bob says it best in the comments section “They are acting in their own selfish interests against the good of the public and they are profiting well from it.”

Obviously, we haven’t fixed the problems that caused the 2008 meltdown. If you think shadow financial culture has changed – there’s a bridge in Brooklyn I have for sale.

Compared with all the first world countries, we break more economic bubbles, have an enormously higher crime rate, are far more innovative, and provide far less for the public good.

American’s are in the NOW. We have become a nation of what can you do for me. Our former greatness was in the words of visionary President John F. Kennedy – “Ask not what your contry can do for you, but what you could do for your country.” That vision that inspired America to greatness and unity has changed.

Note – Will post some comments on stock bubbles today

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 -0.01% up
NASDQ -o.24% up
S&P -0.36% flat
Russell 2000 -0,25% -

Technicals, Fundamentals & Analysis

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

US Stock Markets -

Volume is returning to US markets. Not massive amounts but, the last two days have seen a clear increase – Bullish sign.

US markets rose into the close. Sure Looks like some entities got word of outstanding MSFT & AMD earnings results

Shadow Banks – Many of the major shadow banks took big hits yesterday on the foreclosure mess. BAC (Bank of America) down -5.19%. Yet overall stocks held up well. Another bullish sign.

However,  if Shadow Banks fall again today, that would be confirmation of yesterday fall.

  • Significant Indexes
  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar fell -o.55% yesterday. The inverse correlation is not always perfect. But yesterdays fall gives bull more amo for today.  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] Rose  +0.76% 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.] Fell to +15.56. Momentum is with the stock bulls but location= NEUTRAL

Reading Tea Leaves.

Lots of room (MO)and reasons (BDI, USD, Earnings Reports, volume) to move higher.

Interesting that only a slight decline sent the MO down further than a previous day’s rally sending it higher.

Overall – the same bullish pattern dominates.” Mantra foe week

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)
  • TYH (3x tech stocks)

The obvious strategy with SSO & TYH is that in a bull run they are going to clobber the benchmark S&P 500.

On dips feel comfortable adding of the ETF’s in POSITION section. Also adding to SSO & TYH.

It would take probably a massive 400 point move in Dow today to reach overbought levels. Highly highly unlikely.

Check out Paul R’s always enlightening updates on individual stocks and sectors in the comments sections.

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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