Income Inequality

(sorry see Link below for chart)

The chart shows the growing gap between the top 1% (pink color) and the other 99% between 1917 and 2008 in the USA.

Chart from Henry Bloget at Business Insider also points out the significant rise of the wealth gap between 1981 and 2008 of the 1% vs. the 99%. Original data from Pro. E Saez UC Berkeley.

Kudos to Paul for turning us on to Business Insider.

Too see all the full sized charts - LINK

Download the charts, Post them on Facebook, send them to your friends, and/or drop some off at your local “Occupy ——” protest site.




egg splat crack smash broken

What was hopefully supposed to be a confirmation day (= prices hold on to most of their gains from previous day) of a major breakout turned into a meltdown of broken eggs.

China’s GDP numbers last night – Headline – 9.1% Down from 9.5% and less than expected 9.3% Heng Seng (China’s stock market) down -4.3%

Bunches of earnings reports. IBM fell after its report yesterday and Goldman’s reports a HUGE loss.

  • Our primary forecasting tool, the McCellan Oscillator fell dramatically to +37.84 (moderately overbought = NEUTRAL/Bearish
  • Our secondary forecasting tool, the Put Call Ratio, rose to 1.18 = NEUTRAL
  • For more on these two indexes click on STRATEGY section on top of page.


Reading Tea Leaves

Mea Culpa - I was far less aggressive with my Short the market call than I should have been yesterday. “Because of the OMG MO – Short term traders may be successful in shorting rallies.” but I also stated “there is no clear buy of sell signal”

For longer term Investors - There is no buy or sell signal unless we had a confirmation day. Yesterday was supposed to be that confirmation of a price breakout from its trading range. It got crushed. Therefore no upgrade to CAUTIOUSLY BULLISH and no clear buy or sell signal.

For short term traders - Again my bad the MO has worked - “Over the last 3 years the MO at OMG levels has always meant at least a 5% decline over the next week to month.” This should have been a RISK ON trade yesterday instead of “Because of the OMG MO – Short term traders may be successful in shorting rallies.”

Today – Reading Tea Leaves - Expect at least a 5% decline from highs.


Paul’s Corner

It’s 7:30 AM Tuesday and Barr is waiting for my email with today’s words of wisdom from Paul’s Corner. Let’s see what should I write? The dollar is up, more news from Europe, markets sold off yesterday, China’s GDP fell for the third straight quarter, ain’t nothing new here folks, same old stuff we have seen for the past few months and the market hasn’t changed, so do we really need a new Paul’s corner for today? Maybe I’ll just copy and paste last week’s edition, things haven’t changed.

Ok since I’m being lazy here what does Dave Steckler have to say? From his blog last evening:

Well, it was nice while it lasted. Last week’s action sent the equity indexes up 5% or so but today the Dow Industrials fell almost 247 points to close at 11,397.68. Volume was below average.  The S&P 500 Index dropped 1.94% and the Nasdaq Composite shed 1.98%.

Germany shooting down hopes for a quick fix to Europe’s debt crisis was blamed for the sell-off today but as we’ll see, the charts show it was not unexpected.  Oil and gold/silver prices all fell but Treasuries gained strength as prices rose and yields fell.  The U.S. Dollar rose.

Read  Dave’s full blog, Link

Well Dave that sounds like last week’s blog and the previous weeks blog, so hum, it sounds like we are  stuck in this nasty sideways trading range.

How about Ron Brown’s morning report?

At this point, it is a one day pullback on light volume.  The shift to the downside was dramatic for the Force Indexes and the % shift down for the small caps.  The VXX shot up over 10% which shows just how nervous this market is.

The NASDAQ fell back into the trading range and gave up 2%.  I’ll be watching tomorrow to see if this was just a slight pullback, or if the market fall back further into the trading range.  If selling continues on heavier volume, that will be a signal that the market is probably heading lower.

Gee whiz same here, just more of the same stuff we have seen for months now. But wait, notice both Dave and Ron suggested light volume on yesterday’s sell off,  this is good. Just maybe the market has reached equilibrium. Just  maybe.

I can’t add much to what the masters of market analysis have said other than I did order a hamburger with out cheese at the local diner last evening and it came as ordered, no cheese! So just maybe this market is finally getting ready  to go. If you care to play, be careful with your capital, your grandchildren are counting on you for not screwing up with their inheritance.


Investors411 LONG Term Investments

Each day Paul (change setting from profile to activity) offers up to the minute commentary on the markets & YSL #5 in the Comment section of the blog. Catch his Paul’s Corner every Tuesday and Thursday.

Our Hedge Investment - Theory – Technology will do better than financial sector over time. Thus hedge is set to hopefully work well in both up and down markets.

  • Short Financials – Investors411 will use ultra short SKF (opened at 78.91 – now at 76.51).
  • Long Technology - Investors411 will use ultra long QQQ (tech’s) QLD (opened at 81.13 – now at 86.55)
  • @ a 2+ % gain on this trade so far


Long Term Outlook

3 to 6+ months


*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)




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