Baby Bull

Smoke & Mirrors

Reality always seems to be managed by others in some kind of smoke and mirror game for their benefit (usually a powerful oligarchy) and not yours.

  • Headline this AM on CNBC – Investors Lack Confidence in Regulators to Fix Markets
  • Basel 3 (most of you have never heard of this, but it was supposed to be the conference that regulated worldwide banking) They gave banks till 2019 to get their act together. That’s  and unbelievably long 8 years How many financial meltdown are possible before then? Just how bad is the European banking system that it needed 8 years to get solvent?
  • Of course big US shadow banks can still hide hundreds of billions (trillion+) in off sheet accounts. Here an account of just how phony the US & European banking systems have become by Karl Denninger

Politically we have groups of radical fear mongerers who collaborate and seek out the worst examples of behavior of Islam and 24/7 broadcast the results with their well financed media domination. This is exactly what Osama Been Forgotten and his crew try to do against the west.

Hate, fear, and unregulate financial systems work as a means to power money and war.

As one of you stated in the comments section we are generating so much hatred (smoke and mirrors) that one terrorist incident could set off a conflagration. (not the exact words)

Casino capitalism and fear mongering Islamaphobia does not instill confidence in the future.

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 +0.78% up
NASDQ +1.93% up
S&P +1.25% up
Russell 2000 +2.49% -

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Technicals, Fundamentals & Analysis

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

Mantra for September - “The Black Box/High Frequency Traders BB/HFT control the majority of trades. Jim Cramer -”BB/HFT make up 80% of trades.”

Term for the Day – Forex (FX) - From Investopedia – “The market in which currencies are traded. The forex market is the largest, most liquid market in the world with an average traded value that exceeds $1.9 trillion per day and includes all of the currencies in the world.” The Dollar is the #1 currency in the world.

US Markets – Moved higher in increased but average volume. Average volume right now is much less than the volume in the spring & much much less than the volume that started the 2009 bull run. There was a key breakout in emerging markets and breakdown in the dollar that significantly impact US stocks. (see below)

Part of this rally was due to Basel 3 (see above) as the financial sector shot higher on weak worldwide regulations.

Today is a confirmation day of Monday’s rally.

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar, fell a HUGE -0.96% yesterday. It also broke down to a closing low below its 4+ week long trading range. For stocks =Bullish
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Fell a minor -0.63%yesterday.  The BDI does not have the immediate impact that the MO or Dollar does. It also often makes long slow moves in one direction (see chart for patterns)  Right now longer term chart pattern = Bullish
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose to +61.65 yesterday.= Bearish

Reading Tea Leaves

The dollar breakdown is the key factor behind yesterday’s rally. If dollar continues to fall stock will continue to rise. The dollar ETF - UUP (check out one nasty bearish chart for dollar by clicking on previous UUP ticker symbol)

MO has reached overbought territory. But right now the massive Forex (FX)/dollar market is the dog wagging the stock market tail. If the dollar starts to melt down we could see the MO reach the 97 it reached in July or even the 122 it reached at the start of 2009. (last very unlikely)

Still this is a time to think more about selling than buying. Going to stick with our strategy of selling into big rallies  (Dow 100+ points) when the MO is above +60. If the dollar continues to fall. then we will have to adjust our MO guidelines. +80 or +90  could become the selling/shorting point and falling to zero or +20 could be a buying point.

This all depends on the dollar. – UUP is still the what to watch.


Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

(I do manage 6 accounts that have other positions)

Current positions –  EWS (Singapore) – This ETF has broken out and gapped higher yesterday. Along with IFN (India)  they have broken out to new highs and are getting overextended or too far above 50 day moving average.

EEM – The emerging market ETF has broke out and gapped higher in increased volume. Again volume very overextended from 50 DMA. Volume is 1/2 of what it was in May & June when everything went down. Just another sign that the dominating traders are the BB/HFT’s.

Comparison to US indexes – 200DMA is still above 50 DMA. Emerging market have broken out and are dragging the US indexes along for the ride.

Long Term Outlook Upgraded

WHY – Several important technical barriers fell & we are rapidly approaching others for US indexes

  • The major breakdown through resistance for the dollar in a massive move. US equities move inversely to the dollar.
  • Emerging Markets broke out through major resistance. The 50 crossed the 200 DMA two weeks ago and a gap higher through resistance in increased volume is bullish.
  • All these factors that should push stocks higher are happening with US equities now being overbought (over +60 on the MO) So there is rsistance to the baby bull market.

This Bull is a baby and it has yet to really start running. Because markets are so overbought right now the baby bull may never get its legs.  So the CAUTIOUSLY BULLISH long term outlook may be changed back.  This means we have to set a bit higher standards for overbought on the MO. (see above)

Long Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES


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