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Fancy Pants Debt

If YOUR eyes gloss over when they explain economics (and even if they don’t)

This 3:49 seconds video is for you.

YOUR investments dollars, from the stock market to your houses value, depend on the quality of debt. So does world economics. Good debt, Bad debt and Fancy Pants debt.

The video is FUN, Entertaining, and educational.

John  Green does more than explain the Greek Crisis “which has pushed the Greek government close to defaulting on its loans, the reasons why the Euro zone and the IMF are desperately trying to bail Greece out, and what the rising cost of sovereign debt means for the massive budget deficits throughout the developed world.”


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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 +1.36 Down
NASDQ +1.53 Down
S&P 500 +1.44 Down
Russell 2000 +1.52 -

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Technicals, Fundamentals & Analysis

Shorter Term Outlook.

day/days/week

  • Fifth straight rally day. Biggest 5 day gains in many many moons is bullish. Overall volume was almost pathetically light. Repeat -  Trading was, of course,  dominated by the High Frequency Traders (HFT’s) and professional trading desks . Most of this trading goes on in dark pools Here’s the video from Bloomberg
  • Technically, the huge 5 day move off a double bottom (prices make a low and test it – see charts on far right) is very bullish
  • Fundamentally last week -we kicked the Greek debt problem down the road. But Greek debt - benchmark 2 year bond is selling at 26%. Is virtually impossible to adopt a massive austerity program and pay a huge 26% interest on the Greek two year bond at same time. Also China said has the inflation problem is under control - Premier Wen. This fueled the rally. However problems in China this AM
  • The McClellan Oscillator (MO) chart rose to +89.65 (above +30 somewhat overbought , above +60 overbought, above +90 OMG overbought) This is just a fraction from OMG overbought levels. 2009 was the last time the MO reached over +100 (twice) This began a long term bull run. Short term  overbought = Bearish
  • $USD The Dollar stabilized after falling for a week. -0.06% yesterday. (+/- 0.50 is a significant move and the dollar is usually a contrarian indicator) Short term tend for stocks now. Will stability hold? = Bullish/Neutral
  • Reading The Tea Leaves - Shorter term  -OMG oversold levels will be reached in any stock rally. This put big pressure on rally to let off some steam. Repeat – Outside the HTF and Trading desks there are a bunch of normal day/swing traders who have missed the rally and are waiting to buy the first dip.

The 5 Day Bull Stampede

Long Term

weeks/months/years

  • Still the risk of bad European debt and our own debt crisis confronting bulls. However, the silver lining investors see is low interest rates for a long time, a Fed managed US market and inflation fears diminishing in China and more time for banks in Europe cushion debt crisis. If there is a mediocre or poor jobs number (this Friday) this could even add oil to a burning hot fire that’s driving the bulls. Poor jobs = More Potential for Fed intervention and lower interest rates for a longer time.

  • Bulls are back and they see a light at the end of a tunnel. If fundamentals in earnings season are decent (starts next week and earnings should do OK) we could go on a run. We are due for a overbought mini dip, but a move of this size off a double bottom in a very strong longer term bullish sign. As we switch from a temporary timeout in European debt to our own manufactured (July 22 deadline) debt crisis fundamentals matter. Still too early to raise NEUTRAL rating.

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Your Stock List

Paul has published to a spreadsheet of YSL #4 in the comments section of the blog.

Sorry many of you had problems with the old link

Like the past 3 YSL’s is beat the S&P 500 our benchmark S&P 500 again

A new YSL is under construction. If You are on the email List send in your choices to me this week.

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Current Positions

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

NLYAnnaly Capital Mgt. Ultra high dividend stock - Up  over 6% in six weeks and was held through the date that allows you to collect dividend. so add another 3% to 4% profit. = +10%

IMAX - Mea CulpaAs expected IMAX and 3D hit a major home run with the new Transformer’s movie over the weekend and I did NOT buy stock for Investors411 portfolio last Weekend. I would have sold IMAX into the Harry Potter movie July 15th.

Paul has published in the comments section (last week) some potential high growth buys

Short term strategy is to short overbought stocks. Bought 1/2 position in TZA near close Friday at 33.00.  MO closed at 89, just one point away from OMG oversold. Will sell quickly for a small gain.

Longer Term Strategy The 5 bulls is a major signal and there are many who missed the rally waiting to pile on.  We’re in NEUTRAL, but a possible positive senerio has appeared (see above)

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

I very much like the position of going long High Growth Stocks (week to months and on dips) and/or longer term dividend plays – yet holding some sort of protection (preferably a Puts over a short term ETF that shorts) in case of sudden meltdowns.

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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, check Comments Section for a few weekly updates.

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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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