The Pinata Hits Back

“For several months now, the GOP in general and the Tea Party in particular have taken unending swipes at Federal Reserve Chairman Ben Bernanke, turning him into a virtual piñata.

In his speech in Jackson Hole, Bernanke finally swung back.  Many were shocked that the markets were strong even in the absence of some new form of financial stimulus”

The above lead quote is from Forbes, the author Joan E Lappin, CFA Gramercy Capital Management. Link to editorial

Check out some of the must read Bernanke quotes in Lappin’s editorial.

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Last week the NYT ran an outstanding editorial by Warren Buffett on “Why we Should Stop Coddling the Super Rich.”

Loren Berlin continues the argument in another devastatingly coherent editorial - “Why Taxing the Rich is Good for America.”

Many thanks to frequent contributor/commenter Jim J for finding the above editorial.

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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

Index Percentage Volume
Dow +1.21% low
NASDQ +2.49% low
S&P 500 +1.51% low
Russell 2000 +2.58% -

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Technicals, Fundamentals & HFT’s

Shorter Term Outlook.

day/days/week

  • Technically we have formed a double bottom for most major indexes and that’s bullish.
  • The McClellan Oscillator (MO) rose  to +35.66 (-30 somewhat oversold, -60 oversold, -90 OMG oversold)( +30 somewhat overbought, +60 overbought and +90 OMG overbought) At the start of July stocks made it all the way to over +80 before they melted down. Right now MO outlook = Neutral/Bearish
  • Reading the Tea Leaves - Boy did I get Friday’s call wrong. Markets move higher as the Fed Chair went directly after Republicans, the Tea Party and Congress in his speech (see above editorial)

Longer Term Outlook

weeks, month, months

  • Repeat - May 20th forecast still stands. The May 20th summer forecast has come to pass and now we wait to see the Fed’s next move. Add to this Europe is a whole lot worse than previously thought back in May.
  • Reading Tea Leaves –  Let’s see how far the HFT’s can take stocks into overbought territory before yielding to bears. Aside from that one venture to over +80 HFT’s and major institurions have balked at taking oversold levels over +60 for a year.
  • Even HFT’s can’t ignore major fundamental aspects of stocks/economics for a long time. Fundamentals are not good. Technically, however,  we’ve put in a double bottom and that could sustain a low for a while. Since many traditional investors have long since stop investing, HFT’s do dominate trading and they make their money off the markets moving.

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

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Many of the stocks in YSL #5

Exploded higher on Friday

See POSITIONS Section of blog for more.(scroll to bottom)

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NLYAnnaly Capital Mgt. Ultra high dividend stock – So far NLY has held up reasonably well through current stock market slide.  and 14% dividend is added bonus.

I still have a Put position to protect NLY. (strike price $17.00 for 3rd Friday in Sept) Also puts on other dividend stocks.

GLD (Long Gold ETF)  Bought at 167.05 last week – a half position. GLD closed Friday at 177.47

Disclaimer Personally I own  a group of dividend stocks including NLY, SNH, KMP, MO, HTD, T, ABV & AGNC and a few other smaller positions I have puts on about half of dividend stocks I own. I buy everything in the hypothetical Investors411 portfolio. I’ve  also  SDS & TZA (ETF’s that double and triple short the market) as hedges. I will be purchasing additional YSL #5 stocks when we have a lower MO.

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Long Term Outlook (for US stocks)

CAUTIOUSLY BEARISH*

*Investors411 has 5 different long term valuations - BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, and BEARISH.

* Everything written in BROWN is a repeat from a previous day

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE


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