Dow 10,000

Shadow Death From Nowhere.jpg

Yesterday the Dow closed over 10,000.  Some major facts that cheerleading American corporate media has ignored about Dow 10,000

  • The Dow was at 10,000 ten years ago. Buy and holding stocks over the last 10 years has really LOST money. A whole lot more than you think
  • If you adjust for inflation the Dow is really at 7,537 – you lost 25% of your purchasing power. Thanks to one of you who sent in this LINK
  • If you compare the Dow to Gold (in some ways this is like showing how far the dollar has fallen in value relative to other countries) “It cost about 30 ounces to buy the 10,000 Dow last time. Now it costs less than 10.” The  loss in purchasing power becomes even bigger.

Therefore, relative to the rest of the world and inflation major US companies/the Dow has taken a huge fall over the last 10 years.

Relative to this years Dow low 6470, Dow 10,000 sounds mighty good .  Financials have lead this Dow/Stock Market recovery from 6470 to 10,000.

  • JPM * (see below) just announced multi billions of dollars in better than expected profits. So will other shadow banks
  • These financials are giving big rewards to top executives who still look for ways to make bets on money (Credit Default Swaps etc) and are building up hoards of cash in order to have collateral on these hidden bets.
  • Obama and his Wall Street administration have even made it less transparency for shadow institutions – mantra, we now have NO mark to market accounting.
  • The banks are not making loans to small businesses like they’re supposed to and the gov’t instead is making those loans/gifts – cash for clunkers, tax cuts, $8,000 first time homeowner gift etc.
  • These big shadow institutions are here to stay. LINK according to Obama’s administration “the genie is out of the bottle.” Looks like these huge unregulated institutions are here to stay.

Therefore shadow banks, the creators of “financial weapons of mass destruction” (Warren Buffett quote) rule. Obviously those who robbed you and brought the world to its financial knees are being rewarded. Investors411 has screamed about the injustice and future doom of continuing the  hidden financial system, but it has contributed significantly to the Dow reaching 10,000.  Like greedy little pigs we are again building a financial system on illusion.

Investors411 recommends the following  (see overview for more)

  • Traders – Play the financial stocks (shadow banks). They rule. Ride the wave. Dow 10,000 means lots of wealth has been again created for upper middle to ultra wealthy. Some of this will get spent and help the American economy and the blackmail shadow banks have is if they go under so does the stock market . Never forget we are only building another hidden asset bubble
  • Long Term Investors – Do what everyone else is realizing buy Gold GLD (see past Investors411)
  • Long Term Investors – Buy countries that create wealth by manufacturing real goods or producing real commodities – China & Brazil

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow +1.47% up
NASDQ +1.51% up
S&P500 +1.75% up
Russell2000 +2.00%
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Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

  • Brown = repeat statements
  • Green = usually bullish statements
  • Red = Usually bearish statements

Technicals and Fundamentals

“Expect other indexes to follow Gold & Brazil. (Both GLD and EWZ have broken out to new highs.)

Put on your Rally caps and watch volume Today should be the day that we know if the money on the sidelines is willing to start to get back into stocks.

Volume showed a wee bit of new money did come into the market, but let’s see if it gets sustained. CNBC and everyone who has money invested in Wall Street is cheerleading for that money to return (see above editorial)

So we’ve had at least a one day rally, but more importantly we’ve fundamentally had top line (sales) growth from Intel and some minor companies.

* JPM , Perhaps the #2 shadow financial institution also hit an earnings home run. Remember, instead of TARP money going toward the elimination of bad debt (credit default swaps) all the Bush and Obama administration have done is shovel money at them and allow them less transparent accounting. Most likely shadow banks/financials are hoarding funds because their real debt from the financial crisis is still huge.

Google & IBM are the next major tech to report after markets close today.

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Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI is @ 40% (I haven’t done the math) off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI nine day rally flattened out two days ago and has fallen 99 points. It fell a -49 points yesterday and closed at 2579 . Even though a reversal seems eminent, we have technically achieved a higher high even though the BDI is falling.  Another 100+ point drop well start to get a little concerned and the line in the sand support level is 2163Bullish for stocks & world trade right now

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$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra Dollar up = US stocks down & Dollar down = US stocks up

Stocks went up so guess what happened to the dollar – The dollar reached a new yearly low fell a significant -0.46 % The dollar closed at $75.47. We have developed a support level just below $76 . The dollar closed below its support level. = Bullish for stocks

NB –

  • Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.
  • A slow decline in the dollar = good a rapid decline = bad .

Last year’s low was around $71, so there is a long way to go before the next major and very crucial support level.

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

See comments section of blog for a complete update on positions.

EWZ – Brazil up +4.05 % yesterday is starting to go parabolic.  It’s going up way too fast as investors are chasing the stock.

GLD – Remains a solid buy the dip opportunity (even small dips)

XLF, UYG & FAS (big financials/shadow banks) are also buy the dip opportunities . UYG is riskier and FAS is most risky. Traders could see a buy the dip opportunity today.

Sold FAS yesterday for +8% profit

Your (Monitor’s) Questions – See comment section of blog

INTC did fizzle yesterday – up only +1.66% vs our positions in China (up +3.55% ) and Brazil (4.05%) Technically, Intel had gone up almost 40% last quarter and a whole lot right before earnings – so the higher price was already built into the stock. China & Brazil have not had the same huge run up, although Brazil is reaching the same overbought position that INTC.

For US and other countries to move forward we’ll have to see other companies show top line sales growth.

Outlook is still CAUTIOUSLY BULLISH

Long Term Outlook = CAUTIOUSLY BULLISH

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

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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