WHAT’S UP? GM Bankruptcy – Email addresses that can make a difference – speak up, fight back, be a watchdog. Stocks on verge of breakout from consolidation pattern. Investor’s 411 positions have already reached new highs. A mea culpa

GM Bankruptcy

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Photo from Huffington Post

GM files for bankruptcy this AM - Lots of the issues have been agreed on before hand. This is a positive. Overview from NYT or 7 Reasons Why GM is Headed for Bankruptcy  from USA today

For investors – This bankruptcy is going much better than expected 6 months ago. This would have been a Lehman Brothers type failure 6 months ago. 

EMail addresses that matter*

YOU can make a difference speak up, fight back, be  a watchdog. Keep the following to the list of addresses.

Congress.org How a politician votedd and forms to email your opinion

sunlightfoundation.com texts of major bills, special interest contributions, and earmarks

Recovery.gov Government on Stimulus bill

Cagw.org tracks gov’t spending by Citizens Against Gov’t Waist.

Pogo.org – monitors government waste

Cop.senate.gov – Monitors bank bailout

Consumerfed.org – Connects you to local groups working on local issues.

* The above list came from a Michael Crowley’s significant article “We’re Done with Greed.” in  Reader’s Digest (page 47, June)


STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index Percentage % Volume
Dow +1.15% flat
NASDQ +1.29% up
S&P500 +1.47% up
Russell2000 +1.90% -

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Technicals & Fundamentals 

This market wants to rally. It sure looks like we will break out of month long trading pattern this week. The NAsDQ has taken over the leadership roll – the only major index with above average volume on Friday.

GM files for bankruptcy this AM – Lots of the issues have been agreed on before hand. Overview from NYT or 7 Reasons Why GM is Headed for Bankruptcy  from USA today

Interest rates and the (falling) dollar are probably the big news of the week, The dollar’s decline juices the price of oil.

XLF - The ETF that tracks financials (mostly shadow banks ) rose +1.83%. Financials has been the leading sector and as financials go so go the markets. Financials are lagging Techs (see QQQ) that broke out of consolidating pattern in light, below average volume.

WTIC - Oil prices again closed over their $60 support level +1.89% at $66.31. Energy related stocks kept the rest of the US markets from loosing more ground. As stated before – “Higher oil prices are an indication of economic recovery, but also hurt that recovery because it means energy prices will rise.”

BDI - The Baltic Dry Index measures the flow of goods (world trade).  The momentum here is bullish (see chart). This is extremely important because one of the greatest obstacles to a worldwide recovery is the lack of trade between countries (protectionism)

Reading The Tea Leaves -  Looks like we are going to break out of the consolidation pattern to the upside this week. Some of our major positions already have done so. Volume, for the most part is NOT confirming the move higher. Techs is driver’s seat. However our secondary indicators are bullish – especially the BDI.

Positions - (See positions section of blog for more)

  •  EWZ - From Thursday sure looks like it was a mistake to take our substantial profits (+26in Brazil (EWZ) Brazil reached a new closing high yesterday… looking for a dip (-5 to 10%) to get back in.” EWZ at new high (see chart)
  •  GLD (gold) is one of the hedges against inflation. Up +2.08% from Friday GLD at 3 month high
  • There are ETF’s that also will move higher if/when inflation occurs. Considering TBT  (explanation later this week), but is has way too high a price right now. This ETF has gone elliptical and will wait for a pull back. We have had the predicted pullback.  This stock is for traders and not long term investors.
  • FXI - our major position here only rose +3.35% yesterday. FXI has broken out to a new high
  • GEX - alternative energy - +2.01 yesterday 
  • FAS - 3x financials has been working. This position is for traders not investors

Mea Culpa – We have cashed in on some of our longer term positions recently (EWZ, XLF & QLD)(26%, 23% & 16% gains) and these stocks are still moving higher.  Looks like the pullback/entry point  is simply not happening. I thought stock would not move higher on $60 oil. I was wrong. Looks like oil will hit $70 and perhaps $80 before impacting stocks 

Tomorrow change in long term outlook to CAUTIOUSLY BULLISH if rally occurs.

Long Term Outlook = NEUTRAL

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING !

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