Putting Money Where You Mouth Is

Charging Bull- Bowling Green NY

Investors in everything from Wall Street to the Dollar (a much bigger market) put their money down because they believe that at some future time they will profit from their investment. These are primarily the world richest people and money managers investing in the future.  Of course, it also includes a lot of upper and mid level middle class people who the money managers (mutual, hedge, 401k university, institutional etc) invest for.

Lets say there are two groups – one willing to invest in riskier assets and the second group (perhaps burned too many times) who seek safe havens – Put  money under the mattress, low yield CD’s, government bonds.

Government bonds are popular . Right now across the world and in the USA almost every time our government sells debt (usually in 2, 5 10 year  and longer term treasury bonds) there is an over abundance of buyers in this safe haven This is great for the USA . Not only does low rates mean the gov’t borrows at low rates, but it is an investment in America’s financial future.

The dollar is rising . The short & mid term trend for the dollar is higher (see explanation below). For the sake of this editorial (putting money where your mouth is) a strong or rising dollar says investors from around the world have confidence in the direction the USA is heading .

Wall Street rising . The fact that equities have now basically moved up over the last 8/9 months is a positive signal for the economic direction of US companies. Wall Street historically looks 6+ months into the future. (This does vary radically from day traders to decades long stock holders.) Wall Street is saying confidence is rising in the USA.

Bottom Line – There are a whole lot of connected and wealthier people around the world who are optimistic on the future of the USA. This does not mean there are not problems. You can also argue over who is responsible for this rising confidence from Obama to emerging markets. But the bottom line is people are putting money down and expect better economic results in the future of the USA.

You can argue that there is not a lot of volume behind the stock move higher is a bad sign. However when you see people flocking to buy our treasury bonds, the dollar rising, and stocks still near yearly highs – Investor’s mouths may be saying one thing, but they are investing in our future. That’s a good thing

Afghanistan and $

The Huffungton Post & TMP  this AM is headlining a story (Surge 2) that there will be 56,000 private contractors in Afghanistan to rebuild there economy. Sorry I’d rather see those 56,00 rebuild our economy. LINK

Bernanke, Time Magazine’s Man of the Year

openingimage

(more later)

KISS & STOCKS

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -0.47% up
NASDQ -0.50% up
S&P500 0.55% up
Russell2000- -0.57% -

Investors411 record – 5 years of beating benchmark S&P 500

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

Technicals, Fundamentals & Analysis

Fed Chair – Ben Bernanke is Time Magazine’s Person of the Year (more later)

The Fed meets this week and makes an announcement tomorrow. Any change in outlook (unlikely) will impact markets. Trading usually light before Fed meeting. No change in the Fed statement about interest rates would be bullish.

Dollar went up so stocks went down yesterday. This inverse correlation has weakened recently. However stocks couldn’t rally in the face of a major move higher in the dollar. (See below)

Again were seeing down days with increased volume. Historically a bearish sign .

FEARLESS WEEKLY FORECAST Up to flat week . But be careful we are entering overbought territory (see below) and if rally continues I’ll be taking profits rather than adding to stocks.

If you don’t understand a term look in up at Investopedia.com dictionary LINK

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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  fell (was flat) -12 points yesterday and closed at 3518. It’s interesting how smooth and seemingly predictable the BDI is in the short term. The rate of the decline is declining and with about 80+% certainty you can predict a flat to up day today.   Since Mid November highs the BDI (see chart) has established a clear downward trend = bearish signal

What it means long term – Since the low of Oct 2008 technically the long term chart is = Bullish. However we are now in a month+ long correction. Mid term trend = Bearish The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets.

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The Dollar is currently the #1 forecasting tool (now weakening as a predictor)

$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 US dollar was rose a significant yesterday +0.76% . Anything close to or over +/- 0.50 is significant The dollar closed at $76.93 . Technically have broken up through the 50 day moving average resistance level and now broken out through another significant resistance level the Oct/Nov highat 76.82 = Bullish for dollar & bearish for stocks

The mid term trend is now bullish and the long term trend (looking at weekly or monthly charts of price) is bearish

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$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

There’s been a dramatic change in the last 4 trading sessions. We broke out of the range (see below) and are close to  overbought/sell positions . The index closed at +21.20 This is a slightly Overbought Position

From past updates – It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 for a month+ =  There has been no clear buy or sell signal for over a month.

Oversold conditions (@-60) = buy, Overbought positions (@+60) = sell The closer we get to +/- 60 the better our chances of making money with a shorter term buy/sell signal

Bottom Line Start thinking about taking profits, especially into any continued rally.

Positions

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

(again a little behind on latest moves)

Will wait to buy some ETF’s and stocks when McClellan Index/Oscillator approaches overbought (@+60)


Recommended ETF’s and Trades

SELLING & BUYING

Your Comments - (See “Monitor’s” comments on side of blog – About a week  ago Investors411 sold its positions in GLD. DGP, AMZN & NVS ) – Not interested in opening any new positions right now Waiting for a clear signal from MCellan Index to commit additional capital or sell existing positions .

If we rally into the end of this week I’d take some more profits

Near bailing out on small investment in BAC

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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