Europe Financial Crisis

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EU Massive Bailout Package

The European Union & the IMF have done what they had to do to, at least temporarily, to  avert fears in Greece & Europe. From NYT

“European leaders agreed to provide a huge rescue package of nearly $1 trillion to combat the debt crisis that has engulfed Europe, and central banks began injecting cash into the financial system.”

This has sent European stock markets soaring & the US is following. Judging from the  reaction of traders and investors this plan has enough fire power to work.

More Analysis from Seeking AlphaToo Much Too Late. & Greek Bailout Plan Increased by a Factor of Five

Like the USA the EU has chosen to use further debt to solve a debt crisis and to avert a global financial meltdown.

Nuclear Power (Round 3)

From Yankee Bob [Bolding/color by editor]

Dear John,

Wind, solar and geothermal only need gov. subsidies to level the playing field. All the fossil fuels and Nuclear are HEAVILY subsidized by the gov. so that taxpayer aid should be factored in any cost comparison.

When they, the fossil fuel industry and their apologists, show you cost comparisons,the fossil fuels are cheaper then clean energy. But they have not factored in the tax payer subsidies that the fossils get and dwarf what the clean greens get. They also don’t factor in the tremendous amount of water the fossils consume and waste.

If the coal industry is allowed to mine all of the Powder River Basin, there won’t be enough water in Wyoming left to support life. How many fish kills have the Nuke Plants caused? What happens if there is a terror attack on Indian Point? Can you really evacuate the NY Metro area? Why is the cost to decommission Nuke Plants not factored in to operating costs and why should the taxpayer be left, always, with that bill?! Show me one Nuke plant that opened on time and under budget  and lowered the electric rate!….

This editorial is continued here or in comments section of blog.


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!

Index Percentage Volume
Dow -1.33% down
NASDQ -2.33% down
S&P 500 -1.37% down
Russell 2000 -2.86% -

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Major markets fell again in massive volume. From Friday “On a pure technical basis we are near the end of the downside move.” The last two days of massive volume technically shows a classic selloff.  In laymen terms – almost everybody that’s going to sell has

Europe’s massive bailout package has seemed to positively impacted markets this AM (See above) = Bullish

How this works technically is that a massive amount of traders short the market + Almost everyone who was going to sell has. This creates a position where few sellers are left and the vast majority of traders are short (betting the market is going to go down). These shorts are forced to buy  to cover (buy the stock because they will loose money the higher it goes)

This is all one big fear/greed play and pre-market indictors are way way up. Dow +400 points. European markets up 4 to 9%

Last Weeks Fearless Forecast – “Down Week” We got toasted

This Weeks Fearless Forecast – “Up Week”  (see EU Bailout above) Not a difficult call with pre markets up +400 on Dow

Fundamentals (Europe Bailout and good US employment numbers) are too big to ignore. Markets have technically reacted. Because of the massive move in Europe and pre markets, everything is going higher.  We should get on the rally train at the first dip.

  • McClellan Oscillator rose to -123.10 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. – In the last three years the MO has only reached pass this level 3 times –  10/08, 3/09, & 10/09 = We are way oversold = Bullish
  • US Dollar – fell  -0.30%.  [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules. Rising dollar almost always = falling stocks. The bailout is going to send the euro much higher and consequently the dollar much lower

Positions

The  Positions Section - latest buys and sells – (Revised positions last weekend) - These are positions I actually own

How The McClellan Oscillator works

Simply the more stocks get over sold the better the odds are of technically making  some sort of gain. The only time the MO had dropped lower (-123)was in the 2008 meltdown.  So it showed us the odds were in our favor. They still are till we reach zero. Only at zero or the 50 DMA change the odds to @50/50.

Investors411 – On Friday near close Bought 2% more IMAX at 17.25 & 1% of ESRX at 97.10. See Friday’s update. Sure wish I had invested more on Friday. Unfortunately, like everyone else, I was fearful.

Will invest 5-10% more in ETF’s early, on the first dip or end of day. Be moderate, don’t get too excited. Remember lots of this initial rally is short covering.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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