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Levittown

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The Cancer of Banking

Deregulation

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Banking Deregulation has almost brought this country to its knees.


It a leading cause in massive job loss, the 2008 meltdown, lack of trust in our financial system, crony capitalism, wealth inequity, loss in home values and a host of other major economic problems.

As a result of the Great Depression, we regulated banks, but those regulations began to get stripped away in the 1980′s and just about collapsed around the turn of the century.

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What must be said first is

if you don’t allow greed to run wild (unregulated) banking can work.

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Levittown after WW 2 is a perfect example of government working with the private sector and homeowners building America.

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In the 1950′s suburbia was born

  • Levitt & Son adapted high speed, low cost home building techniques, but lacked the financing to rapidly expand.
  • The Federal Housing Authority stepped in and gave builders the cash flow they needed and insured significant amounts of each credit worthy 30 year home mortgage.
  • This regulated system worked.
  • Our regulated banking system, because it was in their self interest not to foreclose, acted with integrity as kind of a cop making sure buyers could repay their loans.

How the System Broke down

as the Cancer of Deregulation Spreads

Tomorrow

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Republicans


Two most Significant Questions

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  • How can Santorum who has raised 1/20th the money Romney has, still be challanging him?
  • If Gingrich or Santorum steps aside most of those votes go to the other candidate.  Would this would make a new favorite?

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STOCKS

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Wall Street Bull & OWS Symbol

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  • From Friday – Market Fundamentals driving stocks have NOT changed in any dramatic way…a 2 to 5% correction would be healthy…view this as a buying opportunity…still CAUTIOUSLY BULLISH.
  • INVESTORS411 has not changed its outlook, because this is a manipulated market. Our Central bank  has backed American banks since 2009 and the European Central Banks is now backing their Banks in the same way – by basically printing money and holding interest rates near zero.

  • This is the stock section of Investors411, so the evaluation of what manipulating central banks are doing (protecting too big to fail banks and running crony capitalism) is NOT relevant to stock prices.
  • Anyone who wants a return on their $ greater than near 0% is pushed into assets that the ECB and Fed is manipulating higher.
  • This also makes traditional technical analysis far less relevant.
  • In Fact, “mutual funds, are hemorrhaging assets,” Most mom and pop investors have long since  left the building. Eric Parnell at Seeking Alpha has the same answer  to why stocks are going up  - The Fed
  • NB – Its one big globalized market out there and if the ECB manipulates the Euro debt crisis the USA can benefit. Just like the rest of the world benefited by our Fed stabalizing/manipulating the US markets.
  • So from riots in Athens to a brutal dictator cracking down in (not an oil rich country) Syria, global stock prices are unaffected. It’s all about protecting the banks

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  • Our #1 technical forecasting tool, the McCellan Oscillator (MO) fell to -17.82.  50DMA at +22.55 (for more see  STRATEGY link at top of blog) With such a high 50 dma we are near oversold territory. = NEUTRAL

  • What used to be the European canary in a coal mine is chirping loudly and strong.
  • Italian 10 year bond is now at 5.49% - No where near the danger zone of 7.0% of just a couple weeks back.
  • Repeat from last week  - “A 2 to 5 % correction would be healthy for the market.” But the canary is chirping.

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Paul’s Corner

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The VIX, TVIX and Woody Have Spoken!

For those of you who read my comments posted Friday evening and watched Ian Woodward’s video you will understand, we had a big kahuna .42 move up in the VIX Friday. This indicates the market is pulling back. It was a big move and something to pay attention to. %B*BW turned yellow from green. Caution is suggested with any new long positions!

The following chart image shows the movement of the TVIX (the 2X VIX) this past week and definitely a shot across the bow.

TVIX with Woody Indicator Chart

Ian posted a new blog Friday evening discussing the moves in the VIX. His Woody Indicator (%B*BW) is very fast and definitely calls out the direction of the market.

IAN’s BLOG LINK

BTW if you took the HGSI & EdgeRater course and tried out programs you will get a very nice price if you subscribe/buy the programs before Feb 17.

Valentine’s Day tomorrow, don’t forget your significant other!

Your Stock List 2012

TRADERS

AKRX – continues its nice ride up the 17. Buyable on any minor dip, reports Feb 28 BMO, Up 4.5% Friday after being added to the S&P Small Cap 600 index! AKRX has almost given us a double since added to YSL last year. Who says you need to buy a $300 stock to make money? Current short term target by using the Ian Woodward High jump method is low 13.38, middle 13.50 or a high of 13.86. These numbers should be considered short term targets before a pause and refresh.

CMG – nice snap back Friday after its earnings report a week ago, was a great buy the dip opportunity. Riding up the 9 dma. On a very nice chart.

DLTR – good chart action, buyable with any dip, reports Feb 22,  Kahuna last Thursday

ENB – decent chart action, pulled back Friday and bounced off the 9, may be in a buy the dip position.    extended, unknown earnings date

FAST – enjoying great chart action along with the home builders, extended, buyable in a dip

IBM – Yawn, at the top of its current trading range

KLAC  – cut down through the 17 this past week and now sits below the 50. Maybe in the buy the dip position.

LEN – good chart action, above the 17, slightly extended, big Kahuna and little Kahuna past to weeks.

MA – up to 52 week high this past week on earnings, buyable on a normal pull back, extended

MNST – looks to be in a short basing period, above the 17 and buyable with any small dip or with volume drying up, reports 2/23

RYL – enjoying the home building move, great chart action, above the 17 and the 9

TSCO – Reported previous week and handily beat estimates but lowered guidance for 2012. Sitting on the 17 and the chart is basing.

WATCHERS

BKI – pulled back after recent earnings report. Sitting below the 50, not buyable until it crosses up through the 50, all HGSI indicators are red

CATM – sitting below the 50, needs to cross up through the 50 before a buy, may be added back to Traders

FTK – pulled back with the natural gas stocks, below the 50

KOG – Below the 50, most HGSI indicators red, almost ready for the big green dumpster

SIMO – Reported a week ago with great results, but suffered a 5 point move during the day, finished in the upper third of the daily candle, which is good, but slid off the cliff all week. All HGI indicators are red, not tradable at the moment except maybe as a short if the whole market continues a pull back. TRADE AT YOUR OWN RISK!

SWI – Big run up this past week after cup and handle base, extended at the moment, watch! This is an old YSL member and may be moved up to trading status shortly. Its group is moving.


DUMPSTERS

SIMO is almost here!

As always please make your own trading decisions.  Reporting dates are approximate! All comments above are based on chart action and if you think I can read the charts, I have a bridge I can get you a great deal on!

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Longer Term Outlook

3 months+

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Still

CAUTIOUSLY BULLISH

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AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMMAR  ERRORS.

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