A Tipping Point?
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Syria
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Two days ago the Syrian Free Army, based in Turkey, attacked army positions in Syria. This may be a tipping point against a brutal dictator in a struggle that has killed thousands.
The Arab League has Suspended Syria and warns of “Islamic Empire.”
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STOCKS
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The stock market didn’t fall because 90 protestors in SF were trying to occupy and demonstrate how BAC privatizes gains for themselves and socializes risk for the rest of us to pay.
No, Fitch a major credit rating agency, warned the risk of a “negative shock” remains high for shadow banks. One mega factor – European debt. (Fitch obviously did not use the adjective shadow or color/bold their statement)
Every Investors411 readers knows how BAC (down 3.75% yesterday) and other US shadow banks are tied to Europe debt.
The same way they were tied to the 2008 mortgage meltdown – Through purchases made on the opaque, unregulated Credit Default Swaps/Derivatives market.
How many mega crises does there have to be before shadow (often called “free market”) capitalism gets regulated?
The whole financial world is again skating on thin ice
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Reading The Tea Leaves
Our #1 technical forecasting tool, the McCellan Oscillator rose to -19.45. 50DMA at +21.31. = NEUTRAL
Again, No real technical advantage for bears or bulls. However if you read the MO like a chart it has just broken a support level and that’s Bearish
Europe again dictates the open This makes holding stocks overnight very risky. If you can handle an event driven market where your stock/ETF/mutual fund jumps 2 +% up or down at the open then this market is for you.
Germany down 1.33% at 8:10 AM EST
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The ANF Trade
Put/Call Hedge Trade [ Straddle or Combination Trade]
Winner, Winner Chicken Dinner
The ANF trade that at least one of Investors411 commenters/readers executed turned out to net 70%.
Not as big as the GMCR Investors411 sanctioned trade that made 200%. But as stated we do not expect results like this, or even 70% in future trades. But we could get lucky
One Investors411 reader/commenter is executing the same kind of hedge trade with FO today. Analysis – Possible to get a decent move, but chances seem weaker than GMAC & ANF.
There are two distinct advantages to this kind of trade.
- You risk a limited amount of money to control 100 shares
- This is an event driven trade where you make money if the stock moves significantly either way.
GMCR (chart) .Interesting that GMCR after reaching its low has climbed back 17%
ANF (chart) Ended the day down 13.64%. If the put part of this trade had been held to the end of the day the profit would have been 100+%
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YOUR Stock List
With fanfare Investors411 yesterday has announce its next Stock List. We have a formula that’s worked 5 out of 6 times. You still have till Friday 4:00PM EST to send in your favorite 2 or 3 stocks.
YSL ONLY works because YOU participate.
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Positions
Hopefully Longer term positions.
GLD - DGP is the more risky double long gold ETF. 1/2 position added at 173.85.
FXI - [China] Added at 38.12. Sold 1/2 for 37.33 Loss -2% Moved stop/sell order to 36.94. Stop loss hit. Loss 3% Total loss on trade 2.5% Trade closed.
USO - (2x oil prices ETF UCO riskier) This would be a replacement for SPY. Bought 1/2 position at 37.35. Currently at 39.34.
I personally own EUO (double short the Euro currency) I will be buying EUO on the dip for the Investors411 portfolio.
Reasoning – Simple Europe has a lot of unsolved problems and this is going to hurt their currency.
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Longer Term Outlook
3+ months
Cautiously Bullish will remain in effect as long as benchmark S&P 500 stays above 1225. We are moving in the direction of a downgrade.
CAUTIOUSLY BULLISH
Investors411 has 5 different valuations - BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, and BEARISH.
Everything written in BROWN is a repeat from a previous day(s)
AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING
ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE
CHECK ALL DATA, I MAKE MORE THAN GRAMER ERRORS.
