Blowing Our Horn

We all make Mistakes, but Investors411 is on a winning streak.  The blog has outperformed the benchmark S&P 500 for over 6 years.

We’ve had a string of wins this year that included some major gains (long and short) gold/silver a few month back.  Some of the recent wins are in today’s blog.

  • Investors411 Hypothetical Portfolio gained @+11 over the same period the S&P lost @-17% (recently closed positions in GLD & NLY)
  • YOUR Stock List up +7.48 vs +1.96% for S&P
  • Our new “Risk On” trend indicator has recently been even more accurate than past trend reversal indicators

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Stocks

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 +2,53 down
NASDQ +1.53% down
S&P 500 +2.33% down
Russell 2000 +2.26%

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Market Analysis

Focus on TechnicalsFundamentalsHFT’s

  • Friday started a typical HFT driven, low volume, oversold bounce. Monday turned the typical HFT driven bounce into a low volume rally, and today,  just like so many times before the HFT’s should drive stocks higher in low volume as they merrily bust short positions (puts – see PCR below)
  • TrendKicking the can down the road on Greece is mana from heaven for HFT who can use every news items to execute short squeezes, pump and dumps or catching institutional traders with losing long positions.
  • Trend - Economically both Europe & the USA are deteriorating. The major question is how damaged is the opaque, over leveraged, too big to fail  shadow banking sector. Our Fed and its allies are doing everything possible to ensure survival and growth. Here’s a positive editorialWhy Europe Won’t Implode.

Investors411 Technical Forecasting Tools.

  • The PCR fell  to 1.03 (Roughly - above 1.25 is getting Bearish and below 0.80 is getting Bullish. 1.00 = same amount of puts and calls. Over last two years the highest for PCR is @1.50 and lowest @0.60 - anything approach these levels shows change likely For more information on PCR LINK) Two days just above 1.25 was followed by two days above 1.00.  Just a touch more Puts (backlog) for HFT’s to play with is a wee bit bullish, but overall = Neutral

The McClellan Oscillator

  • (MO) fell  to -11.87 (Rough estimates =-30 somewhat oversold, -60 oversold, -90 OMG oversold & +30 somewhat overbought, +60 overbought and +90 OMG overbought) = Neutral

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Reading The Tea Leaves

Short Term Outlook

days, week+

  • Both Forecasting tools have shifted to Neutral.  But HFT dominated markets have built up some major momentum  - So chances are we’ll keep moving higher till overbought indicators start flashing a turn around.
  • Path of least resistance for HFT dominated US markets is higher.

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 for that to happen.

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Paul’s Corner


It’s amazing how well most of YSL 5 stocks have done during the last few weeks of market paranoia. As of Monday’s close YSL5 +7.48 vs +1.96 for the S&P 500, that’s from the close of Aug 18 to yesterday’s close.

Chris asked yesterday when we could expect an all clear. I have no idea at the moment, as I suggested yesterday in the comments section when we have Eureka’s and Kahunas coming out of our ears then it will be safe for the retail investor (us).

AKRX has really performed quite well during these past few weeks. It’s a good stock to nibble at provided you have a market heading in the correct direction.

One of my favorite HGSI indicators is the Force Index.  It’s a simple indicator, you take today’s close minus yesterdays close and multiply by today’s volume. You then list your stocks from highest to lowest and the strongest stocks of the day are at the top.

Using the average of 2 and 13 day Force index, when you have a positive 13 and an occasional pull back on the 2 day force it’s a good entry point. Look at the chart of AKRX,  on 9/9 and 9/12 the 2 day force  went negative. On 9/13 as the 2 day force turned positive it was a “safe” buy when the price climbed above the previous days high of 8.08. You could have left the house 9/13 with a buy stop order of 8.10 and when it crossed 8.10 you had your buy. If it didn’t go in the right direction, your order wasn’t filled.

Chart Image Link

AKRX got a wee bit extended this past week and was taken to the woodshed yesterday in a pull back. Give it a few days to settle down again before attempting another buy.

Chart Comments

AKRX  – pulled back off of extended territory, give a few days to settle down

ABV – sitting on the 200 buyable if it stays above the 200 and best buy when it climbs up through the 50

NLY – Pulling back below the 200, earnings history show earnings decreasing

AAPL – buyable when it dips to the 17

CPHD – all indicators green

CMG – all indicators green

CROX – sitting on the 50 buy at any time

GMCR – in a buy the dip position, buy when it crosses up through the 17 (107.60)

HANS – buyable at any time

HLF – sitting on the 50, buyable

LULU – in a dip, buyable when it crosses the 50, (56.21)

RES – strong pull back at the moment, not a broken stock.  Energy analyst Lou Powers suggested today:

The ERX Energy Canary was singing yesterday for the Day traders but too early to determine the energy sector direction. Up over 10%. In the recent downturn essentially all energy stocks suffered big losses in spite many with strong earnings growth potential.

TSU – Broken chart not a safe buy

ZAGG – Broken chart not a safe buy.

DISCLAIMER -  these comments are for education ONLY. They are not security buy or sell recommendations. This market isn’t safe for average folks!

Current Positions

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

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

NLY - Will buy back into  this high dividend stock on Dip. The date you have to hold the stock comes up on Wednesday. Since the 1/4ly dividend is usually beeween 3 and 4 % the stock often goes down close to that amount after this date. Everyone expects this so Put’s offer little protection for this incident.

Gold - From Yesterday -  Traders who can handle the risk – a third gap down at open and another  significant fall should bring us to longer term support levels. GLD is at very oversold levels. What you’ve seen is HFT and others stage a short covering rally.  I could be wrong,  and I have not had time to look study the PCR for GLD, but its ripe for a bounce.

Traders - From yesterday - We still have a risk on trading opportunity. Investors411 “RISK ON” has worked  perfectly so far. Using the MO, PCR and some technicals we’ve found some key elements as to when the trend will reverse itself. (Reminder nothing is perfect – but first the MO was good and a combo with the PCR seems to work even better.)

There looks like more follow through today, but as we move higher you start to think about cashing in some of those profits.

How to Forecasting tools – More and Bigger Bullish signals from the MO & PCR – the better your chances of a winning trade. The more and bigger the Bearish signal from MO & PCR - the better your chances are of going short or taking profits

Investors - For Europe, Japan and the USA the economic outlook is poor. If US does start constricting money supply, history will repeat itself and we’ll have another recession. The silver lining for stocks is they can do better than the economic outlook. This will be due to central bank manipulations and HFT’s.

Disclaimer - I buy everything in the hypothetical Investors411 portfolio. If stock is mentioned and I own it you will know.

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Long Term Outlook

(for US stocks only – not our economy)

CAUTIOUSLY BEARISH*

*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(s)

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

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