Greece

The Greek debt crisis has impacted the world. Just what are the austerity measures imposed by European Banks on Greece. Here’s the top 5  from CNBC. (CNBC is an ultra pro bank/Wall Street network.) More details at link.

NB all prices are in EUROs not dollars

  • Raise Taxes – 7 trillion over next 3/4 years. Includes a 23% value added tax.
  • Wage cuts – 15% public sector (huge 25% of Greece is public sector workers.)
  • Military Cuts – about .5 trillion
  • Social Security costs – about  5 trillion – means test and retirement age moves from 61 to 65.
  • Luxury Tax – All they said was thy were going to soak the rich too.

Lets compare this with what the US is doing to balance it budget.  Obviously both parties are to blame and they are far more interested in ideology than solutions. However, one sides total lack of willingness to compromise was pointed out in Obama’s press conference.

Republican’s are not willing even to compromise on

“limiting tax deductions for corporate jets.”

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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

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Index Percentage Volume
Dow +0.60 Up
NASDQ +0.41 Up
S&P 500 +0.83 Up
Russell 2000 +0.32 -

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Technicals, Fundamentals & Analysis

Shorter Term Outlook.

  • Third straight rally day. Biggest 3 day gains in many moons is bullish Overall volume average today and weak the first two days.  It was, of course,  dominated by the High Frequency Traders (HFT’s)and Bank trading. Most of this trading goes on in dark pools Here’s the video from Bloomberg
  • Chart of the DayShows HFT trading over 15 major exchanges (not dark pools)  - “The image below reflects high frequency trading (HFT) operations with quotes in milliseconds. The sharp increases in the chart are what’s termed “quote stuffing” as the machines try to engineer some action over the four minute span.”

openingimage

Thanks to Dave Fry. The quote and chart are his

  • At the end of he quarter managers of stock funds “window dress” their stocks. Part of this rally is “window dressing” or stock managers buying the “hot” stocks to impress their clients so that they stay invested. The major factor is the HFT are buying. Both the quarter and QE2 end today.
  • The McClellan Oscillator (MO) chart rose to +52.72 (above +30 somewhat overbought , above +60 overbought, above +90 OMG overbought) Repeat -The MO has been unable to get above the +50 range for 6 months. It sure looks like the +50 high of the last 6 months is about to fall = long term bullish. Short term almost overbought = Bearish
  • $USD The Dollar fell  again significantly -0.55% yesterday. (+/- 0.50 is a significant move and the dollar is usually a contrarian indicator) The trend since May 1 is bullish for dollar and bearish for stocks. Big reversal down in last 3 days. Most of this movement is based on Greece. Short term tend for stocks now = Bullish/Neutral
  • Reading The Tea LeavesShorter term – Repeat-  A raging bull is stampeding and right now it looks like the only barrier is that markets are almost oversold and what earnings season might have next month.  MO is at +53 almost oversold

Long Term

  • Fed tells Wall Street and Banks - it has your back. The Fed with its surprise announcement favoring banks (swipe fees)  over consumers has sent a message to the markets that it will do whatever it takes takes. MC & Visa up 10+% and banks rallied on $8.5 billion BAC settlement. This $ went to big hedge funds etc. not to middle class.
  • It certainly looks like the HFT’s can sustain a low volume rally without Fed liquidity (QE2 which ends today). Earnings season, Chinese inflation, or something else may trump this, but for now bulls have regained momentum and the only barrier is overbought markets.
  • Obviously, people who buy/sell stocks think the Greek crisis is bullish.
  • Reading Tea Leaves - Changing back to NEUTRAL for the summer.

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Your Stock List

Here’s the LINK to a spreadsheet of YSL #4.

YSL #4 beat the benchmark S&P 500. So did YSL 1 & 2 & 3

Remember t0 send in by emails or post in the comment section any choices YOU have for YSL # 5

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Current Positions

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

NLYAnnaly Capital Mgt. Ultra high dividend stock

Short term strategy is to short overbought stocks. –  Stocks did not rally from their earlier highs so I did NOT “nibble on” the TZA trade. Will do so if the Dow goes up 60+ points and I’m watching.

NB – The long term strategy is no longer to short rallies since outlook has turned to NEUTRAL

Disclosure - I own NLY &  a group of dividend stocks which I have used some short ETF’s to protect. – I buy all stocks mentioned in the hypothetical Investors411 portfolio.

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Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative comments section every day.

Paul is on break for a couple weeks.

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The Fed has moved from an expanding money supply to a neutral – No QE #3. Congress is threatening to contract the money supply. “We [the USA] need to grow at this point more than anything else.” Investors411 outlook will remain negative/neutral on the USA unless the Fed and/or congress return to more pro growth policies and/or Euro defaults are resolved.

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Longer Term Outlook

NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE


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