China Image from STA Travel

Will catch up on politics/Tea Party/ elections tomorrow. Meanwhile check out comments section of blog that has ongoing debates & information on this and stocks.

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 -1.48% up
NASDQ -1.76% up
S&P -1.59% up
Russell 2000 -2.59% -

Technicals, Fundamentals & Analysis

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

US Stock Markets -

Yesterday was a “classic distribution day” Stocks fell significantly, in increased, above average volume.- bearish signal.

The Fed money tree will still blossom (see yesterday’s update) But the China move caught everyone by surprise. (more on this elsewhere in today’s blog and comments sections)

BAC fell (-4.38%) to a new low for the year as a group of powerful players announced their intention to go after the company for big buck. Add this @ $50 billion to projected $100 120 billion losses. The foreclosure shadow bank crisis grows.

AAPL - Turned out better than first feared and was down on the day after announcing earnings -2.68%, not 4 or 5% that it was before markets opened.

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar rose a TITANIC +1.62% yesterday. Overall trend of falling dollar trend for US stocks is did get broken yesterday. Could be start of new trend. Because of Titanic move and previous three days moving higher a trend reversal to = Bearish/Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Fell a minor -0.44% yesterday. An 8 week bull run, then a two week fall. A very slight stutter and now moving up. Trend starting to fade, but still = Bullish
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Fell to -28.17 yesterday. Lot of room to move both higher and lower. Momentum is with the bears but location= NEUTRAL

Reading Tea Leaves.

Constant mantra at Investors411 over the last few months has been to watch the dollar and its tracking stock UUP. (+1.70 yesterday) Dollar up = stocks down. Remember stocks can go down much faster than they go up.

From yesterday – What to watch

  • Does BAC continue to stabilize and/or move higher. = NO bears rule
  • Does APPL after 4 to 5% early hit stabilize and/or move higher = Stabilizes/Neutral.
  • Key is still the dollar – tracking ETF is UUP = Bears Rule

Yesterday shortly after noon I issued the following statement in the comments section in response to one of YOUR emails Freaking sneaky.” China, in what has to be a co-ordinated move with our Fed, unexpectedly raised interest rates. This sent the dollar higher and stock lower. It also toasted gold. Nothing changes in the long term. More later – for now see LINK

We still have the Fed willing to print & dump money, but the China move will radically alter the situation for a while. China had not risen interest rates since 2007 and this move caught everyone with their pants down. People in short positions had to buy the stock or dollar to cover their losses before those losses became to sever. Therefore the market sank.

What worries investors is China embarking on an interest rate rising cycle. Probably not, but impossible to determine. Did China toss a monkey wrench into our young bull market?

From Yesterday – Best read of tea leaves is if foreclosure crisis couldn’t sink bulls, then AAPL earnings (maybe a bigger hit) will not sink bulls. Market is being manipulated by the Fed’s print and dump. As long as there is no end in sight for printing and dumping stock move higher. -A totally new element emerged from the #1 emerging market raising interest rates blew up the bullish pattern. After this settles the print and dump Fed will again take charge.

Bottom LineChina takes control of worldwide markets. China moves and the whole world reacts. Time was only the USA had that kind of economic power.

Long Term TrendEconomic balance of power is shifting

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). Got stopped out of  the second 1/2 of the USO at 35.20 for @ +7% gain
  • SSO (2x what S&P does) – Got stopped out/sold at 41.51 for 9+% gain. Bought back in (same amount) at  40. 90. Right now this is a trade with a real short stop.

Wish these had become longer term positions than a few weeks to a month. Very sorry to get stopped out, but that’s life.

Paul R reports that YOUR stock list has improved +21.17% since Aug. 3rd. See Comments section of blog.

Going to give markets another day to settle before thinking about buying. Lets see if we can get an MO that says markets are oversold or approaching that before investing or trading.

Once earnings season winds down, will think about a new stock list which is built on the old one.

Look for Paul R’s always enlightening comments on stocks and sectors in the comments section.

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

  • Share/Save/Bookmark