-

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 -0.17% flat
NASDQ -0.40% flat
S&P -0.51% up
Russell 2000 -0.43% -

Technicals, Fundamentals & Analysis

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

Major news yesterday and today is Spanish debt. Spain is a major country in the EU and if Spain goes down all of the EU get shaken to its roots.  This is making the Euro weak and therefore the dollar strong. This is important. Europe got hit by the 2008 financial meltdown and because of how their monatary system is structured its far harder to smooth over the bumps as our FED does.

Additionally the 10 year T bill yield is still rocketing ahead

Too early to tell if this is a much needed and healthy correction in stocks or something deeper. I suspect the first.

There is also plenty of reasons to be fundamentally bullish.

Significant Shorter Term Forecasting Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar fell a very significant 1.03% yesterday. In a consolidation range, but trend bullish for dollar and bearish for stocks = Bearish/Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets,&  exporting countries]Rate of fall increased to -1.06% yesterday. Broke downside support a couple bays back, downside momentum gaining is trouble = Bearish
  • McClellan Index – (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] fell to -22.29 Last three days was biggest fall in over a month accompanied by a very minor correction in stock. This is a bullish sign. Still not yet close to oversold. Neutral

Reading The Tea Leaves -

Spain is Europe’s 4th largest economy and its 10 year T bill is trading at 5.53% (relative to ours at 3.52%). The posablitity in investors/traders mind of run away inflation in Europe and the USA is growing. Stocks have historically handled a beginning of inflation well, but if it gets too large everything suffers. The good news in all of this is deflation (a much more significant problem) seems off the table. Could go on for thousands of words but here’s the

Bottom Line – Quantitative easing over the past 18 months has kept stocks surging and stabilized our economy. Europe is having a major negative impact on us and it looks like right wingers and others are going to challenge or put road blocks in front of our FED.(I’m all for more transparency, but these guys want to destroy the FED – lead by Ron Paul.)

Right now quantitativ easing is NOT having some of its intended effect of keeping the dollar lower and the T bills/bonds yield low.

This is going to make for a bumpy ride and perhaps  changes investment strategy.

  • EUO – an ETF that double shorts the EURO
  • PST – an ETF that double shorts 7 to 10 year treasuries.

Of course, this would be a buy the dip situation.

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).

Current ETF Positions.

  • EEM - (Emerging Markets ETF) -1/2 positions sold
  • UWM – (2x small cap stocks ETF) – 1/2 position sold
  • UWM-
  • UWM

Putting stop on 1/2 of  last UWM position at what it was bought for. 40.94 or sell 1/2 for minor 1% gain near open. 2% trailing stop on the rest.

Very Interested in UCO – double oil ETF, but still waiting for dip.

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!

  • Share/Save/Bookmark