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Jobs, Jobs, Jobs

The economic mantra of Investors411 has been Jobs, Jobs, Jobs.

The monthly figure is unemployment up 0.1% to 9.1% and less than expected +54,000 jobs. – Worse report than expected. Government jobs (teachers etc) are the sector that is coming down most dramatically.

Japan, Europe, & high oil prices all factors in this number.  Things are better from the beginning of the Great Recession -700,000+ jobs a month, but times are tough.

Politicians have focused on debt when the clear and present danger is jobs. We all know the systemically the globalized corporate oligarchy is hiring abroad and not in the USA.


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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 -0.34% Down
NASDQ +0.15% Down
S&P 500 -0.12% Down
Russell 2000 -0.09% -

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Technicals, Fundamentals & Analysis

  • Technically markets held onto the large losses of the day before. This in Wall Street language “confirms” the fall and usually means there is more downside to come
  • Reading The Tea Leaves – Our short term forecasting tools are in “NEUTRAL” (see below),  but the conformation mentioned above shows a bearish short term bias. Longer term – Growing a bit more bearish each day.
  • Repeat/reminder - “On May 20th Investors411 downgraded it outlook to NEUTRAL in anticipation of the June 30th ending of QE #2.”
  • Repeat/reminder “The major question of the summerHow far do markets have to fall, before the Fed jumps back in with liquidity  and says – we have your back?”
  • The Monthly Job’s Report is always major news. In the past it had little impact on stocks, because the Fed kept pouring liquidity into the economy. But bad news mattered on Wednesday as major US markets took a @2% hit. It will matter today

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Shorter Term Forecasting Indexes

There are hundreds of forecasting tools, – These two tools have worked

When they stop working Investors411 will use other Indexes

  • The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The US Dollar yesterday fell -0.21%.We’re at an inflection point and yesterday’s minor move means the situation is unchanged.  Still trading below 50 DMA .  For US Stocks = NEUTRAL
  • McClellan Index(MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] MO fell a bit  to -7.42 yesterday. This is almost the exact middle of the range so stocks are not oversold or overbought. Lots of wiggle room up or down, but after a real bad meltdown momentum is with the bears. However overall position is now = NEUTRAL

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Dividend Stocks

The 10 year Treasury bond is now under 3%. There is some obvious risk in holding growth stocks though the summer (end of QE #2, Debt ceiling crisis, & emerging market inflation) So where does the money that’s out there in the system go? I believe dividend stocks, becuse of their stability, cash rich banace sheets, and second stream of income (the dividend) offer a reasonable choice.

If things become extremely bad these stocks will loose money. Check out Investors411 posts in May on dividend stocks.

Chuck Carnevale from Seeking Alpha believes holding dividend stocks is preferable to bonds right now. His editorial contains a list of 20 dividend stocks to consider. The link is to page 2 of his editorial.

Like some who write into the comment section, I have protected  these stocks with puts or calls on ETF’s that short market indexes.

I don’t plan on holding these stocks forever, If the money supply gets tightenes (something that will happen if the Tea Party ideology wins out) I’d sell. Below is a list, like Carnevale’s to consider if you want to buy and hold for longer periods of time.

Here’s a list of what I, my family, or the non profit I invest for  own

Personally, now, about 30 to 50% of my portfolios are dividend stocks and ETF’s

  • NLY – higher dividend/higher risk
  • AGNC – higher dividend/higher risk
  • ANH – (small position) higher dividend/higher risk
  • CTL (telecom)
  • T (telecom)
  • VZ (telecom)
  • WIN (telecom)
  • SNH senior housing
  • KMP (limited partnership has tax implications)
  • HTD ETF  (has tax advantages)
  • CVX – Chevron
  • DVY – ETF (Dow Dividends)
  • SDY – ETF (S&P Dividends)

Amounts of money are diversified by asset class. Example – I own less of the 4 telecom stocks individually than other stocks because together they are so similar.

Will probably buy on dip the following to diversify.

  • DUK - Almost there. (energy)
  • D (energy)
  • MO (tobacco)
  • PM (tobacco)
  • KMB (food)
  • PG (consumer staples)

I don’t like the drug companies, because of the uncertainty. – If a major drug has side effects, that stock can tank quickly.

Caution – Most of these are too high right now. Buy the dip.

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Positions

Investors411 runs a hypothetical portfolio that should outperform the S&P 500.

SLV/AGQ (very roughly 2x silver) Sold 1/2 for 3% profit. Have a sell order in on balance (see comments section of blog.)

REMX – (Rare Earth metals) Investors has a 1/2 position in this ETF

NLY – Annaly Capital Mgt. Ultra high dividend stock.

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Strategy - RepeatUntil we get a sign from the Fed that they “have our back” buying the dip is out and selling into rallies is in. (unless you can find a superior stock – see Paul and other bloggers in comment section of blog.)

Investors411 will be adding ETF’s that short the market in rallies. See comments section of blog for when this happens. See POSITION’s section of blog for some alternatives.

Disclosure - I own SLV, NLY, REMX, & IMAX (the later should be in  Investors portfolio)

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Check out the advice, recommendations, analysis by bloggers on stocks,politics and trends in the comments section of the blog Many of the best concepts regarding YOUR Financial Future are discussed their. Watch for Paul’s Corner every Tuesday and Thursday

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Longer Term Outlook

NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING


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