Investors 411 Blog

by Barr Jozwicki
January 11, 2011

The Face of a Terrorist

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , , , , ,

Article - Mehta Homeland Security

The Face of a Terrorist

The Daily Beast/Newsweek is featuring a story on the “rise of right wing extremism could spur violent attacks” warned by Homeland Security in 2009. (story by Aaron Mehta)

Some Facts About the USA

  • In 2007 there were 47 active militia groups in USA. In 2009 127 (source Atlantic pg 72 & 73 below)
  • In 2007 $288 million in taxes from firearms and ammunition. In 2009 $453 million
  • Clay Duke, white male, shoots at Florida School Board members and kills self.
  • Michael Enright, white male, kills cabbie who he suspects is a Muslim in NYC.
  • Byron Williams white male, shoots at & arrested by police on his way to kill liberal members of liberal foundation
  • Joe Stack, white male, drives his private plane into IRS building.

“Now, if the accused [the Arizona assassin/terrorist] had been Muslim, [instead of white males] does anyone doubt whether this mass murder would have been considered an act of terrorism?” asks Bill Quigley

One of the progressives in the comments section of this blog was recently talked out of buying a gun after the Arizona massacre at a Democratic congresswomen’s event Is it only a matter of time before the left stops lighting candles and violently retaliates? What happens after that?

Rage paranoia and division are growing in a country already consumed with violent behavior. Can President Obama and other leaders step up and use this moment to “Overcome Evil with Good?”

“the atmosphere in which this horrible tragedy was born, nurtured, and carried to its wretched fruition is toxic. Of course, there are always going to be unbalanced people, just as there are always going to be viruses in our environment — but what most determines whether those viruses make us sick is the strength of our immune system. When it is stressed and compromised, infections can easily take hold.

To paraphrase the title of Arianna Huffington’s excellent editorial (her quote above) What will YOU do is the real question.

Will YOUR voice remain quiet?

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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

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Index Percentage Volume
Dow -0.32% down
NASDQ +0.17% down
S&P 500 -0.14% down
Russell 2000 +0.48% -

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Technicals, Fundamentals & Analysis

Investors411 record - 6 years of beating benchmark S&P 500

  • Markets fell in the AM and then the Fed primed the money supply with a $7.96 billion purchase of bonds.
  • Volume figures relative to the past decade at this time are pitifully low.
  • Mantra - THIS IS A  STOCK MARKET BEING MANIPULATED HIGHER by the Fed & the US government. Call it bad, good or ugly – just like QE 1, now QE2 (quantitative easing round 2) and low interest rates for shadow financials is perhaps the most significant driving force behind long term rally (more below under Tea Leaves section)
  • Therefore, I remain convinced that good economic news for the USA is OK for stocks, but bad news is better because it means more quantitative easing by the Fed.
  • Two significant factors weigh in today on markets – Europe All Eyes on PIIGS & Extreme Bullishness a Concern

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Significant Shorter Term Forecasting Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] 5 day significant rally in & dollar near breakout levels. Friday fell -0.16%. The resistance level was threatened at the open, but held as the dollar closed slightly lower.  Trend for stocks = Neutral/Bearish
  • McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Almost no change yesterday -7.94 The MO has been no where near +/- 60 for two months, but the chart shows a bullish pattern of higher highs and higher lows and that’s bullish. Outlook for stocks = Neutral
  • 10 year T Bill (TNX)  In consolidation pattern  Some big recent moves shows big indecision. Big jump lower Friday, but still in range. = Neutral
  • Baltic Dry Index (BDI) [Measures the cost of shipping goods worldwide. Also proxy for exports, especially China] This index has  broken a major support level and is falling like an anchor. = Bearish

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Reading The Tea Leaves

The ”schizophrenic.” pattern changed back again yesterday Big dip at open only to see stocks rally higher throughout the day.

Under normal circumstances this market would have crashed and burned, but for 18 months we had the training wheels of stimulus, low interest rates and quantitative easing.

The Baltic Dry Index is in a meltdownSimply put the cost to ship goods worldwide is breaking down it costs less to ship each day and is starting to approach levels near the beginning of the recession.

Here’s the anomaly – The prices of the goods they ship are all near record highs – copper, grain, coal etc. Here’s a long list of comparative charts showing a strong correlation between the BDI, stocks and commodities breaking down into a 180 degree reversal.

Line from Hamlet – Somethings Rotten in the State of Denmark - Either some mysterious entity is producing dozens of huge ships each day or perhaps our Fed’s quantitative easing money is also being shipped abroad.  Edit 1/11 2:40 EST – it turns out there is a huge glut of new ships and the sites I used did not have this information. Mea Culpa

What to watch

AAPL - This time Apple had a solid gain as it broke out to another new high (up +1.88%).

UUP –  The dollar went right up its resistance level. It held and the tracking ETF for the dollar ended up falling.

Working on 2011 Investment guide - Short term more bearish, but bullish in long term for the year.

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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 ETF Positions. (oldest held positions listed first)(see comments section where all trades are first announced)

  • UWM – UWM still outperforming other US indexes

Under consideration

UCO -(2x oil prices) Very erratic, waiting till correction settles.

REMX (Rare Earth ETF) -   Will buy back hopefully on slight dip.  Blew chance to buy dip yesterday – was not near computer when it happened. Only ETF under immediate consideration at this time.

EWZ (Brazil) & LBJ ( 3x Latin America – majority Brazil) Obviously the later is more risky because its leveraged 3X. Waiting for larger pull back on both.

UYG (ETF that does 2x Dow financials) XLF is the financial ETF. -  Massachusetts Supreme court has ruled against shadow banks foreclosing because of the difficulty in knowing who owns the hidden derivatives on the mortgage. Obviously in the end (We Have the Most Pro Business Supreme Court Ever – Headline this month’s Forbes magazine) the shadows will probably win. But other state supreme courts will probably be unanimously against this too. – We’ve had a dip on this news and might be done. Those with no ethic problems could consider a buy.

DGP – Will buy back into this 2x gold ETF on dip. Consolidating at support level. A possible buy. What probably happens is a bear raid breaking support. Then once the weak holders are whipped out gold will rally. Here’s a hidden gem of news – India has told Iran it would buy oil in gold. Those that can tolerate the risk – now’s the time to buy.

YOUR Stock ListPaul tells me YSL#3 was back outperforming the S&P benchmark. Add to that Yesterday was an outstanding day for YSL#3

If you check out the comments section of the blog you’ll notice Paul made a call on Solar Stocks a while back. This sector is white hot right now. Moral of the story is if you are a trader, keep an eye on the comments section of the blog for ideas.


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Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including “YOUR Stock List.” (YSL#3)

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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January 5, 2011

What American’s Want.

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , ,

Increasing Taxes on Wealthy

A Poll by CBS News and Vanity Fair show what the American people would do when presented with the 4 major ways of correcting our debt problem.  These are by far the  3 most significant parts of the budget (the next largest is the debt itself) and it includes increasing taxes on the wealthy as a solution.

1067 adults were used in the survey. Here’s the LINK. “To Reduce the Deficit Tax the Rich More.”

Thanks to S Herwehe for the heads up on this.

So why is the media pounding day after day on everything else, and ignoring what the American people want?

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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

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Index Percentage Volume
Dow +0.18% flat
NASDQ -0.38% up
S&P 500 +0.13% up
Russell 2000 -1.59% -

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Technicals, Fundamentals & Analysis

Investors411 record - 6 years of beating benchmark S&P 500

  • Another heavy volume day.
  • “schizophrenic.” reaction by major market players over last few days
  • Leaders like overbought commodities and small caps take it on the chin.
  • It looks like the BAC settlement is the single biggest factor behind Monday’s rally and that factor seem to have been temporarily built into stock prices.
  • NB$BDI numbers came back on line and its at 1993. 7 points below major support = BEARISH Will put this back under Significant Forecasting Tools tomorrow. Really wish we had had these numbers the last few days. Would have sold more yesterday.

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Significant Shorter Term Forecasting Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] A big dollar fell apart and the dollar rose  yesterday  +0.40%. For stocks trend is = Neutral/Bullish
  • McClellan Index – (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] fell a to +12,70Neutral
  • 10 year T Bill (TNX)  In consolidation pattern  Some big recent moves shows big indecision = Neutral

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Reading The Tea Leaves


Total chaos for major market players. The major firms use puts and calls. They have gone  “schizophrenic.” In one day the ratio of puts to calls went from one extreme to the other. See 3 month chart from SentemenTrader and their comments below.

  • “Never before has this indictor swung from a three-month high to a three-month low on back-to-back days, but it has now.  Traders went from heavily trading puts on Friday to calls on Monday.
  • Historically, that kind of surge in call buying has been quite bearish for stocks going forward, but it failed completely during December.”

A correction would be healthy for stocks. Commodities, especially have been overbought.

Sentiment Trader says that “bears failed completely in December.” However now volume is over two times what it was in December.

When market behavior becomes erratic and volume INCREASES it is almost always a good time to be on sidelines

So I’ll be cutting back on another position or two early today or on first rally. (see below)Then wait for a correction to run its course. It may NOT be a long correction.  There are also potential buys listed if we dip far enough.

Additionally the Baltic Dry Sea Index has broken support. = BEARISH

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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 ETF Positions. (oldest held positions listed first)(see comments section where all trades are first announced)

  • #1 UWM - (2x small cap stocks ETF) – 1/2 position -Sold last 1/2 of UWM at 44.25 for +11% gain. Total gain on trade +10%
  • #2 UWM Will placed 2% trailing stop on 1/2 this position
  • SLV – (Silver ETF) Will place 2% trailing stop on 1/2 this position. May sell more.
  • DGP -(2x gold ETF) Sold 1/2 near open at 41.26 for -1% loss Sold the rest near close at 40.50 for -4% loss Total loss on trade -3%
  • REMX -(ETF for Rare Earth Metals) Sold 1/2 at 26.12 for +6% gain

Under consideration

UCO -(2x oil prices) Very erratic, waiting till correction it settles.

REMX (Rare Earth ETF) – Will consider more on a dip. Limited supply. China which dominates market is limiting exports. All this makes for a massive supply/demand problem forcing prices higher.  Rare earth goes in everything from hybrid cars to TV’s. Very excited about this sector for the long term. Would consider adding to position if price falls to about 24.

EWZ (Brazil) & LBJ ( 3x Latin America – majority Brazil) Obviously the later is more risky because its leveraged 3X. EWZ has had 6 straight major rally days and is sitting directly below a major resistance level/new high for year. LBJ just failed to break out and dropped yesterday. A dip for a few days would be an decent entry point.

UYG (ETF that does 2x Dow financials) XLF is the financial ETF. - The major shadow banks have the backing of the US government & the Fed. The recent BAC /Treasury/Fannie Freddie decision was the latest in a long line of NOT holding banks accountable and their accounting is non transparent. Remember these are the Shadows that are behind 8 million more Americans being unemployed, the dramatic fall of housing prices and a worldwide “great recession.” Broke out two days ago and pulled back yesterday. Both overbought at this time

NB - I did sell DGP yesterday, although a firmly believe that yesterday was nothing more than a bunch of traders trying to panic the gold market and drive the price down, so they can buy.  The TERMINATORS WORDS – “I’ll be back.” in gold.

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Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including “YOUR Stock List.” (YSL#3)

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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July 14, 2010

More Cow Bell

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , ,

Sometimes what life is about is wanting More Cowbell

Thanks to HG for the clip. You can see a longer than 44 second version at the above link from SNL.

The Black Boxes

Investors411 has been beating the drums over the control Black Box Entities have over your money.

The Will Ferrell link was short, simple  and funny. This link is long, technical and boring.

But if you are at all invested in stocks or concerned about market regulations  you should skim/read this piece about the High Frequency Trading that black box entities use from Zero Hedge by Tyler Durden

Black box traders have rewritten the whole concept of investing. Money quotes -

  • “can clearly demonstrate that HFT is having an increasingly large impact on the microstructure of equity trading dynamics.
  • Values which were once only present on the orders of several hours or days are now commonplace in the timescale of  seconds or minutes.”

Bottom Line – Competing with the Black Boxes is impossible for the ordinary trader/investor. They win. However, because they are so big they leave tracks. The problem is before the whales (big investment entities) used to move slow and the black boxes move fast. When markets crash again there will be a HUGE investigation into this kind of trading. There should be now.

I’ve tried to see some patterns that the folks who control these black boxes use. Examples – the dollar & the MO seem to have a high correlation with the majority of their algorithms. But not yet sure that these forecasting tool will work as well as in the past. Even Black Box Traders can’t ignor long term fundamentals forever.

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 +1.44% up
NASDQ +1.99% up
S&P 500 +1.54% up
Russell 2000 +3.14% -

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

Technicals, Fundamentals & Analysis

Mantra for week (revised a little) Earnings Season begins this week. - How markets react to news has usually been the key. If a stock shrugs and goes nowhere on good earnings news you know there’s trouble ahead. Remember Black Box algorithms  dominate even more as volume declines.

Caution Black box traders that make up 50% (high volume days) to 80% (low volume days) of all trades seem to follow their own market technicals, and often eliminated volume as a major factor in price moves for indexes & sectors.

Volume rose on the AA earnings news, but was sill below average. This shows a few more traders/investors did buy. = Bullish

Intel computer like last quarter had an outstanding earnings report. Shares of the mother of all chip stocks were up +8% in pre market trading. = Bullish

Fundamentally it comes down to who do you believe – Intel says the worldwide recession is over especially in China and emerging markets and the BDI says we are falling into a double dip or extended recession especially in China and emerging markets. = ??????

Significant Indexes-

  • McClellan Oscillator (MO) rose dramatically to +65.41[+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. The Black Boxes have not allowed the MO to rise above 80 since 3/09 = Bearish
  • US Dollar –  The dollar fell -0.67% yesterday [Anything over +/- @0.50 is significant.] The dollar is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, have used the inverse relationship of the dollar as a key part of their trading system. This inverse relationship is part of their algorithmic system. For stocks = Bullish
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also good proxy of China.) BDI is in free fall from a high of @4200 to 1790 Monday. This is a huge -57% drop in 7+ weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI fell a decreased -2.72% yesterday. You have to go back to April of 2009 to find a lower BDI. Fundamentally this is very BEARISH

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own - Updated over weekends – Investors411 holds NO position at this time. (see below)

I will be nibbling on an ETF(s) that Shorts the market today on a rally in stocks.

Hope to buy as S&P 500 rallies to resistance levels 1105, better 1112 or best @ 1125 (June high) S&P closed at 1095.  Probably use SDS. (-200% what the S&P 500 does) I will be adding ETF that short 300% when/if the market moves higher.  See yesterday’s Investors411 for options.

LogicIntel & BDI are presenting two different fundamental pictures of world growth. You could write volumes on all the fundamental factors. The bottom line is that Black Boxes that have taken control over US markets. They have sold when the the MO got up to 80 four times this year. That’s a pretty strong resistance level.

Perhaps zillions of fresh investors will now come off the sidelines and take control. Some will, but my read the tea leaves is any rally will get sold into.

Long Term Outlook =CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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July 12, 2010

Vuvuzela Fatwa

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , ,

Fatwa Against Vuvuzela

Anyone who watched the World Cup in South Africa over the last few weeks knows what a Vuvuzela is. Perhaps we are all Muslims now. The UAE issued fatwa # 11625 against vuvuzela’s whose beehive sound is too noisy at soccer matches.

Congratulations to Spain for their 1-0 victory over Holland.

YOUR comments

I received an email that contained the following statement over the weekend - “After clearly demonstrating Friday how Bush’s tax cut did nothing in raising net tax revenue next to Clinton. After factoring in inflation and population growth Bush has lost us revenue by 2009. Then you make a the completely contradictory statement ‘There are cases where cutting taxes can raise tax revenue.’ Why? “

Because its true and a well recognized fact by most economists. – However there is a balance between lots of different factors and  obviously you can’t collect no taxes and expect revenues. Maybe it will help to think the Obama Tax cut in 2009 It gets no press because a Republican did NOT make it. This works especially for almost every middle class American. Here’s how it can in the long term raise taxes.

  • You cut the taxes of a working American (Say under $100,000) That person goes right out and spends the money especially those well below the arbitrary $100,000 a year figure. They buy something and this generates money and t from sales taxes to income taxes. It bounces some folks up to higher tax brackets because their busisnesses grow. They spend more. Bottom Line – money flows faster and this generates tax revenue.
  • It also used to generate jobs. Lower taxes would create more demand and jobs would grow creating more taxpayers. However globalization has virtually killed that. If corporate taxes or payroll taxes decline a bit it does almost nothing to create jobs in the USA. These jobs go to China or another faster growing emerging market country where you can get the job done at 1/4 the price.

Right now the S&P 500 companies are sitting on a mountain of cash $1,800,000,000,000 If they wanted to they could generate millions of jobs in the USA They are simply far more interested in spending this money where it will make them more money and that’s in emerging markets.

The New BRIC’s

The term BRICK’s has been used for years to denote the faster growing big emerging market economies = Brazil, Russia, India, China and sometimes South Korea.

Now a new acronym for mid level countries leading the globalization GDP growth – CIVETS - Columbia, Indonesia, Vietnam, Egypt, Turkey, & South Africa. LINK

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 +0.58% down
NASDQ +0.97% down
S&P 500 +0.72% down
Russell 2000 +1.48% -

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

Technicals, Fundamentals & Analysis

Mantra for week Earnings Season begins this week. – How markets react to news Will be key. If a stock shrugs and goes nowhere on good earnings news you know theirs trouble ahead. Remember Black Box algorithms  dominate even more as volume declines.

We had another rally (mostly in post 2:00 EST trading) in decreased volume. 40% below average. These Black Box rallies can go on for a while in low volume  Mom & Pop investors have long since left the market.

While its difficult to understand collectively what the black boxes will do, we do have two signs indicating a reversal should be ahead.

  • The BDI (see below)
  • The MO is near overbought levels.

Here’s the bulls case for good earnings For stocks –  Bad economics can be balanced out by good earnings

Significant Indexes-

  • McClellan Oscillator (MO) rose a to +53.14 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. This index is on the boarder of being overbought = almost Bearish
  • US Dollar –  The dollar rose +0.14% Friday [Anything over +/- @0.50 is significant.] The dollar is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, that make up to 80% of all trades, have used the inverse relationship of the dollar as a key part of their trading system. The big move was breaking the support level two Friday’s ago which set up the rally for stocks. The swings in prices are smaller and therefore right now = Less Relevant
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also good proxy of China) BDI is in free fall from a high of @4200 to  1902 Friday. This is a huge -55% drop in 7 weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI fell a decreased -1.92%Friday. Rate of decline is slowing – perhaps a good sign. but overall still = BEARISH

Monday’s Fearless Forecast - Even the black boxes have not been able to push the MO over +80 for over a year. The economic news from employment in the USA to world trade & China (BDI) is not good. We seem to be running into an economic wall that even the Black Box traders will have difficulty penetrating.

The earnings surprise would have to be HUGE to penetrate over +80 on the BDI. So I’m shorting any significant rally and expecting a down week. Were still in wait and see mode. See Positions

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own - Updated over weekends – Investors411 holds NO position at this time. (see below)

Short Term Traders - Those of you who love risk could nibble on the Direxion funds that short markets 300% (see POSITION Section at very top of blog) Some ProShares also do 300%.  I’m waiting till the +53.14 on the MO turns into over +60.

Caution – last time I waited for -54 to become -60 and missed last weeks rally.

Monitor didn’t – see comments section of blog. Also check out the in depth technical analysis of the BDI and other indexes that The Critic sent in

Investors – Sill waiting for the market to reach overbought levels (Close to +60 on the MO) but no cigar yet. The further ovesold the better. See list of ProShare that short market 200% in POSITION Section of blog. You can start to nibble when/if we get over +60 on the MO. The higher the better. Remember this may be only a trade that lasts a week.

The probability of making $ on a short (ETF that shorts an index of sector) is getting better.

Lets say there’s a 200 point rally in the Dow today – you can bet the MO will be  close to +8o or above.

Long Term Outlook =CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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July 8, 2010

Jesus’ Colt 45

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , ,

What's wrong with this picture?

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Jesus’ Colt 45

Louisiana Governor Republican Bobby Jindal just signed into law that it was legal to carry guns into church. My how religion has changed in the USA.

Deficits

What to do about the deficit? The Center for Economic Progress and Research using non partisan Congressional Budget Office data has come up with some concepts and their impact on the deficit. Thanks to Sherwehe for the site recommendation and Jsovjani for the below insightful  comments on this data

“Very interesting; fin. spec tax raises the most. My question is impact on jobs. However, things I want, like means testing ss and medicare are not included. Gas tax interesting, but I do not trust gov’t to use it for deficit reduction. History has not proven that they would keep their promises. I think trust in gov’t  is major issue to reform. Till then,  spend less (personally) and maybe buy gold. I am not hopeful in healing US till maybe a real depression and massive public riots. Does sound very negative, doesn’t it. I’m very concerned.”

Check out the site and you can see dozens of different possibilities

Jobs Now…Deficits Soon

Like Andy Grove, Matt Miller in the WaPo has some definitive solutions. Miller has a relatively coherent vision but admittedly it would be very hard to accomplish what he calls for politically. Here’s his main point.

That means cutting payroll and corporate taxes now — and offsetting this with phased-in tax hikes on dirty energy and consumption, to take effect only once jobs and growth are back on track.


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 +2.82% up
NASDQ +3.13% flat
S&P 500 +3.13% up
Russell 2000 +3.67% -

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

Technicals, Fundamentals & Analysis

Mantra for week - Fundamentals rule. Old fashion fundamental earnings analysis dominates as earnings season kicks off big time next week. ”Double dip recession” has become an investment mantra starting in Europe and now echos worldwide.

Old Wall Street Axiom - The market can remain irrational longer than you can remain solvent

Yesterday stocks staged a mega rally on virtually no news and on well below (only slightly increased) average volume. Irrational, to anyone who believes fundamentals matter. The Black Boxes (giant institutions that speed trade using algorithms & make up to 80% of the trades) made these seemingly irrational trades yesterday.

Yes, the US markets were oversold and due for the predictable rebound (see Tuesday’s Investors TF&A section) But what happens is Black Boxes magnify what should have been a more mellow rally. Almost no investors returned from the sidelines or you would have seen volume spike higher. That left the Black Boxes on their own.

What’s this all meansWe have to adapt to what’s happening & adjust how we make both long term investments and short term trades. In discussing Black Box trades on CNBC (the financial channel) they said that 99 stocks yesterday made up 50.1% of all trades. Also Black Box institutions were using Sector and Index ETF’s as one of their primary trades.

  • Everything happens at hyper speed
  • Everything is more technically based
  • Moves are exaggerated both up and down
  • Lots of the old rules that governed the markets are not functioning because of the hyper speed.

In the long run fundamentals are going to have their say. The BDI cannot keep falling 4 & 5% each day without consequences. The cost of shipping goods falling 52% worldwide in almost 7 weeks should be sending off at least some alarms. = Bearish

Earnings Season starts next week.

Perhaps the most important leading sector was financial stocks yesterday XLF (ETF for financials) up +4.33%. Mega shadow banks JPM up +5.01% & BAC +4.62% Perhaps a message on how weak financial reform is in the USA.

Significant Indexes -

  • McClellan Oscillator (MO) rose a very significantly to -1.45 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works..= Now squarely in the middle or NEUTRAL
  • US Dollar –  The dollar fell -0.32% Friday [Anything over +/- @0.50 is significant.]  Right now is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, that make up to 80% of all trades, have used the inverse relationship of the dollar as a key part of their trading system. For some reason they have changed and the dollar is now = Less Relevant
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also good proxy of China) BDI is in free fall from a high of @4200 to  2018 yesterday. This is a huge -52% drop in 7 weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI fell a massive and increased -5.13% yesterday. Rate of decline increased as it broke through its support level. = BEARISH

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own - Updated over weekends – Investors411 holds one position at this time. (see below)

Short Term Traders – I opened a 2% of portfolio position in SDS near the close yesterday. SDS is an ETF that double shorts the S&P 500. Price 35.40.  The enormous size of the rally made me hesitate.  A better entry would be in a rally today.

Investors – Keep powder dry and wait for a clear signal from MO. Perhaps we should have gone long when the MO got not quite to -60 (oversold territory), but -54. There are no absolutes in defining oversold. This market is far too wild and Black Box dominated. Better safe than sorry.

Long Term Outlook =CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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July 7, 2010

Economic Whirlpool

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , ,

Economic Whirlpool

Yesterday, Andy Grove described the scaling process as the reason American jobs may never return.

  • Even if we had another internet revolution those jobs would go to an educated emerging market country. In fact the environmental green jobs are going there now.
  • Grove himself points out his solution may/would lead to a “trade war.” Jsovjani (in comments section) accurately reminds us it was “one of the major causes to the Great Depression.” It would also lead to inflation.

This puts us in an economic whirlpool-The kind that forms when you let the water out of the tub. The USA is traveling in ever shortening economic circles leading to the dark hole or drain. China ( as well as other countries) obviously employs tariffs, manipulates its currency and severely restricts foreign ownership. We simply go on taking it on the chin for decade after decade.

Winners

  • The people in emerging markets that get jobs and improve their economic situation (yes sadly often slave labor)
  • The power and money oligarchy in the USA that profits from globalization.
  • The politicians that can pit anyone who is foreign or different against whites for the diminishing # of jobs in the USA (think TTP’s)
  • The concept of a strong (dictatorial) central government  and tightly managed capitalism (tariffs, monetary policy, censorship, foreign restrictions, etc.) – China’s communist party
  • Global companies that find cheap labor abroad.

Losers

  • The USA economic growth and jobs.
  • Companies that hire US workers andplay by the rules.
  • Democracy in both the USA and China. (more on this most important factor later)

Bottom LineChina is the big winner Look how easily they are manipulating a trans national company like Google out and their own BIDU in. The looser is the USA that fears its own shadow and becomes ever more dependent on China’s restrictive capitalism and one party system for its own economic well being. Maybe the Intel CEO is right. Shouldn’t we at least take some further steps to combat “scaling” in the USA

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 +0.59% up
NASDQ +0.10% up
S&P 500 +0.54% up
Russell 2000 -1.49% -

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

Technicals, Fundamentals & Analysis

Mantra for week - Fundamentals rule. Old fashion fundamental earnings analysis dominates as earnings season kicks off big time next week. ”Double dip recession” has become an investment mantra starting in Europe and now echos worldwide.

Reading the Tea Leaves – To analyze what happened in the US stock market yesterday I’d have to read the minds of millions of people including those big Black Box traders who control 80% of the market. For forecasting future price moves, yesterday’s, below average volume trading was both irrational and  irrelevant in the longer term.

In the short term, you could say traders saw an oversold market so they bought. Prices got too high and they panicked and sold. The black box traders who follow currency (dollar vs. Euro) saw a falling dollar and bought in the last 1/2 hr. giving most US indexes a gain for the day.  Most relevant data is rally did not last long = bearish

Here’s What’s Important

The BDI’s (see below) increased its daily decline through its support level is the most significant economic indicator/forecast out there.  What this is saying is that world trade is drying up. More specifically trade of emerging markets – China. Those of you who have followed Investors411 for years know that emerging markets/globalization has been leading world wide growth.

If you look at the 3 year of the BDI below, you’ll see what technical analysts call a triple top, a broken support level and a red line that is descending almost vertically. This s NOT good. The BDI is at @2100 and in the depths of the 2008 meltdown it was at @600 so there is still a long way to fall before we reach that level.

Nevertheless, without the interdependence of world trade [globalization & I realize globalization has its bad, good, & ugly] we face the danger of recession part 2. The BDI says YES worldwide recession part 2 is coming.

Significant Indexes -

  • McClellan Oscillator (MO) rose a bit to -45.22 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. .= Still NEUTRAL, but close to oversold
  • US Dollar –  The dollar rose a significant -0.62% Friday [Anything over +/- @0.50 is significant.]  Mantra - right now is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, that make up 80% of all trades, have used the inverse relationship of the dollar as a key part of their trading system. Two weeks ago a -0.62% move in the dollar would have meant an easy 100+ point move in the Dow. This could/will change, but right now dollar is = Less Relevant
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also good proxy of China) BDI is in free fall from a high of @4200 to  2217 yesterday.( This is a huge -49% drop in 6+ weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI fell a massive -4.02% Monday. Rate of decline increased as it broke through its support level. = BEARISH

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own - Updated over weekends – Investors411 holds NO POSTIONS at this time.

Investors – Investors411 recommends no long position at this time. Wait for the MO to fall below -60. The further the better. (see past Investors411). Remember – Since 4/23 US markets have formed a bearish pattern of lower lows and lower highs. Hopefully, we will be buying at a low, but the 5 to 7% guideline (sell 1/2 for a 5% gain) because of the bearish trend.

Traders - There is some space to make a trade with a short ETF like SDS. The best read of the tea leaves is because the BDI is rapidly sinking & markets according to the MO are not yet oversold some room for a short exists. So I’d short any rally in stocks.

Answer for Monitor’s Question – I believe Paul R is away till Monday. The 5% rule is really a 5% guideline. Happy you made $$$ and I usually set a stop/loss at the price I bought it for.

Long Term Outlook =CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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July 6, 2010

The Glamor of Greed

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , ,

Looking at  pretty pictures – reference below *

Drawing by 8 year old granddaughter Emma

The Glamor of Greed

-

Andrew "Andy" Grove, co-founder of Intel  Corp.

Andrew “Andy” Grove,

Andy Grove the co founder of Intel uses a different title than The Glamor (profitability) of Greed. This former CEO calls his editorialHow to Make an American Job Before It’s Too Late” Grove uses the same megatrends Investors411 uses.

His editorial is a well researched, clear, outlined and offers a job centric solution. Here are some major points. [Many thanks to Robert Howetser who is a sometimes contributor to the comment section of blog and brought this editorial to my attention.]

  • The Bay Area in SF (Silicon Valley), the innovative machine of the country hasn’t been creating jobs in the USA lately. It has a higher unemployment rate than the rest of the country.
  • The scaling process is no longer happening in the US And as long as that’s the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs.
  • From Apple to Dell computer there is a 10 to 1 jobs ratio for former (Silicon Valley) high tech jobs in China vs. the USA. The largest of these is Foxconn ($62 billion in revenues – makes and assembles for Apple, Dell, etc.) and employs more people than the combined worldwide head count of Apple, Dell, Microsoft, Hewlett-Packard Co., Intel and Sony Corp combined.

Without bringing scaling back to the USA, American companies are going to continue to make profits by shifting jobs abroad. –  That why Grove is calling for a jobs centric government.

“We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars — fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations…”

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 -0.47% down
NASDQ -0.46% down
S&P 500 -0.47% down
Russell 2000 -096% -

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

Technicals, Fundamentals & Analysis

Mantra for week - Fundamentals rule. Old fashion fundamental earnings analysis dominates as earnings season kicks off big time next week. “Double dip recession” has become an investment mantra starting in Europe and now echos worldwide.

Technically the benchmark S&P 500 is down 9 of the last 10 trading days and way overdue for at least a  technical short term rally. = Bullish

The BDI See below) is still in free fall (-47% see below) clear evidence of worldwide economic  (trading) meltdown. = Bearish

Pre market trading in Europe & China is way up @2% (as of  8:00 AM EST)Those of you who took Friday’s read of the tea leaves to heart (you had to love risk) and bought as markets dipped at close – should at least be rewarded in the short term this AM. = Bullish.

*Looking at Pretty Pictures-

Technical analysis is looking at pretty pictures or patterns of stock charts. None quite as wonderful as a grandfather’s view of his 8 year old granddaughter’s work. Who knows why technical analysis works? Perhaps

  • We are all creatures of habits, and the trading herd follows patterns
  • So many folks think it works and therefore it does.
  • We all like to look at pretty pictures.

The bottom line – Investors411 on the right side of the blog offers different financial  charts. Also daily updates on certain charts in text of blog each day.  Those charts on the right side of the major US indexes all show one pattern – a series of lower lows and lower highs for stock prices that started on April 23 2010. If you’re a Bear you love this pattern.

We are currently in one of the lower lows of this pattern.

Fearless Forecast for the Week-

Some kind of technical rebound seems inevitable. If it doesn’t last at least couple of days we’re in big trouble. Some poor earnings results may already be built into stock prices. The accelerating downside of the BDI is a gathering storm. What to watch for is how the markets react to the first few earnings reports. How markets react to news is usually our #2 indicator (see STRATEGY Section on top of blog)

Best read of tea leaves - Good start poor finish = down week.

Significant Indexes

There’s hundreds of charts, oscillators, systems out there to measure trading patterns and flows. The BDI & MO were chosen because they work extremely well right now for different reasons. (Click on STRATEGY section at top of blog for more) The dollar accuracy as a forecasting tool was shaken last week. If it’s accuracy rebound’s Investors411 will continue to use it.

  • McClellan Oscillator (MO) fell a we bit to -53.38 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. In May the MO reached two lows – one at -120 and the other close to -130. Therefore, potential for more downside risk. Even after last week’s disaster for stock the MO is still NOT below -60.= Still NEUTRAL, but almost oversold
  • US Dollar –  The dollar rose a bit +0.19% Friday [Anything over +/- @0.50 is significant.]  Mantra - right now is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, that make up 80% of all trades, have used the inverse relationship of the dollar as a key part of their trading system. Last week this got crushed by bad fundamental news as regular investors fled the market. Dollar flat last two days. = Neutral
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also good proxy of China) BDI is in free fall from a high of @4200 to  2216 yesterday.( This is a huge -47% drop in 6+ weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI fell -2.81% Friday. Rate of decline increasing as it nears support level. Looks like support level will get crushed today =Bearish

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekends – Investors411 holds NO POSTIONS at this time.

Shoudda, Wouldda, Couldda -

Last Friday Investors411 reccommmended a buy if markets dippped for those willing to take risks. It does look like this trade is going to make $ at the open and perhaps throughout the day. More tomorrow.

Long Term Outlook =CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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July 1, 2010

Bears Bite

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , , ,

You’re happy to be in cash if you’re an Investor411 reader and waiting to deploy that cash when the opportunity arises. We’re starting to get close, but how bad will the bears bite?

Fat Cat Shadow Banks Kick Ass

You’d think congress would be all for a tax on the biggest shadow banks, but Republican’s (perhaps led by my Senator Scott Brown) objected. The $19 billion dollar tax on shadows and hedge funds got taken out of Fin/Reg bill. Now who pays if one of these giants goes down? YOU

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 -0.98% up
NASDQ -0.21% up
S&P 500 -1.01% up
Russell 2000 -1.05% -

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

Technicals, Fundamentals & Analysis

Mantra for week - ” Any analysis of stocks has become an analysis of what the ”Black Boxes” of  huge institutions with their high frequency trades & computer algorithms are doing.” They make up 80% of trading and right now the huge currency markets are dictating their moves.

The last major support level gave way on the benchmark S&P 500 around 3:00 PM EST Only the Russell 2000 (small cap stocks) remains above this years low. = Bearish

Analysis – Double Dip Recession Fear Grows

  • EU & GB (Obama was NOT on board with this) want to raise taxes and cut spending – This is exactly what Herbert Hover did to cut the deficit and led to the Great Depression. Combined EU alone has bigger GDP than USA so this is significant.
  • BDI falling off a cliff. Now a -42% decline in world trade prices also indicates the worlds engine of growth emerging markets (China & India lead the pack) in decline. This translates into falling GDP’s for emerging markets. Jim Cramer dismissed this index on his TV show last nigh – He’s wrong.
  • USA fixation on cutting deficits (tea party patriots) and not fixing transparency and over leveraging problems. We are not out of the recession woods our focus should still be jobs, jobs, jobs.

Paul R in comments section has a list of  some support levels of the benchmark S&P 500.

Significant Indexes

  • McClellan Oscillator (MO) fell to -50.77 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. In May the MO reached two lows – one at -120 and the other close to -130. Therefore, potential for more downside risk. = Still NEUTRAL, but approaching oversold
  • US Dollar –  The dollar fell a marginal yesterday -0.12% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important Dollar up = stocks down and visa versa. Both stocks and dollar going down together = Bearish
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also good proxy of China) BDI is in free fall from a high@4200 to  24o6 yesterday.(2447 to 2406 yesterday) This is a huge -42% drop in 6 weeks.  Often a leading indicator for stocks. Here’s a week+ old chart of BDI showing broken support levels =Bearish

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekends

Have not yet had a chance to Update over last 2 weekend but there are NO positions held at this time.

Hold your “I wanna invest” horses. The MO is not even at - 60 yet. Just because we are all in cash (some of you still have SDS (Double short the S&P 500) lets not jump in head first when we cross the -60 oversold threshold. Reasons

  • Technically – the MO reached over -120 in May
  • Never make all or nothing investments enter them gradually.
  • The BDI did hesitate a bit but is still in free fall -42%
  • S&P is now down @-15% from high and when that happens -20% becomes more likely than not.

These red flags exist. But below -60 is a place to start nibbling on those ETF’s/Stocks that have held up better than their peers. The lower the MO goes the better. Today some ETF’s that are doing better that US markets.

  • EWZ (Brazil) still about 10% from this years low.
  • EWC (Canada) Like Brazil energy rich and above this years low.
  • EWA (Australia) Common theme with above – higher beta, energy rich, above this year’s low.
  • EWS (Singapore) Trade hub, China play – rallied yesterday despite US decline.
  • FXI (China) Old favorite like EWZ has made us $$$ in the past.
  • There are sectors within the USA that are holding up better than major indexes like Health Care Products, Paper, Drugs, Airlines etc. But their outperformance level is not as great as some foreign countries right now.
  • GLD &  DGP (2X gold) continues to be the #1 buy the dip play – Irrelevant of MO.

Another 100 point drop in the Dow should bring us close to -6o on the MO and the least risk averse could nibble a wee bit. I’ll wait for a bit bigger fall.

CautionMajor US and most world indexes have formed bearish patterns of lower highs and lower lows. Therefore, chances are that when Investors ‘s411 buys we will only hold for a week or two. You can hope for more.

Long Term Outlook =CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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June 23, 2010

Killing America’s Soul

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , , , , ,

What in a mirror? A vase, A slave, Your soul?

Wall Street Killing America’s Soul

Paul R has referenced an excellent piece by Paul B Farrell in the comments section of the blog. It’s exactly what Yankee Bob talks about (again in comments section) when he states-

No matter how small or logically challenged the Tea Partiers are they are invaluable to Corporate Capitalism. [I call it "casino capitalism"] It gives the major players and shakers a human face to spread their poisonous agenda . It’s like interviewing a slave that believes they are being well treated by their master so why don’t you become one too.

You should check out Farrell’s entire editorial, but let’s look at the “hyperspeed, toxic irrationality… of Wall Street (“Corporate capitalism” or “casino capitalism”). Farrell from Market Watch –

  • All Wall Street bankers are worth 100 times any Main Street investor
  • All Corporate American CEOs deserve to make 400 times their workers
  • All children of all Forbes 400 billionaires deserve to inherit tax-free
  • All lobbyists deserve millions when winning billions for special interests
  • All taxpayers should pay for catastrophic mistakes of Wall Street Fat Cats
  • All rich hedge fund managers deserve to be taxed at capital gains rates
  • All senators deserve to become millionaire lobbyists when they retire
  • And Goldman Sachs CEO Lloyd Blankfein deserves a $100 million bonus

This is the reality we live in – A reality that creates the deficits that John S, Me and even the TTP’s are outraged over. Yankee Bob understands that so many perhaps unaware slaves (the TTP’s) to the system that privatizes gains, socializes losses & creates deficits. Jim J. rightly concludes that we don’t want “less government,” but “Effective Government.”

Bottom Line – What will you do? Just keep staring in the mirror or take action.

The General & The President

Headline news around the US is about the Rolling Stone article The Runaway General. Will General McChrystal get fired or hand in his resignation for insubordinate remarks (he’s apologized) he and his staff made about Obama and his administration.  Tom Friedman’s view

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 -1.43% flat
NASDQ -1.19% flat
S&P 500 -1.61% up
Russell 2000 -2.14% -

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

Technicals, Fundamentals & Analysis

Analysis of stocks has become an analysis of what the “Black Boxes“,of  huge institutions with their high frequency trades & computer algorithms are doing. Their focus ,now, is on the huge currency trading markets.

Fed makes interest rates announcement today.

YOUR Questions

From private emails and public comments lets go over four aspects-

  • The BDI – I brought back the BDI Index because it was reaching a critical mass. This measurement of world trade had fallen so far and is close to a major support level that the fundamentals (trade) factors it represent were too big for even the Black Boxes to ignore.
  • The MO – It’s not a magic bullet. But it does show you when the odds are in your favor to make a trade. There are many similar Indexes, but this one was chosen because it does NOT use stock volume. Volume has become less relevant because the “Black Box Computers” have taken over trading.
  • This is NOT your parents buy and hold market. The USA shadow financial corporations are running an opaque unregulated banking system. We have a congress and & administration that is unable or unwilling to balance the system so YOU have the same advantages as (as Yankee Bob would put it) your corporate masters.
  • Because of point 3, everything is more opaque & more volatile. Emotionalism, fear, and irrationality make owning most stocks far more risky than in the past. Example, Right now the BDI besides loosing 40% is close to breaking down. A breakdown here greatly increases the chances of a second major recession on top of the first.

Significant Indexes

  • McClellan Oscillator (MO) fell significantly to +1.01 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. NEUTRAL
  • US Dollar –  The dollar rose yesterday +0.13% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Dollar up = stocks down and visa versa. This was the first two up days in a row for the last 13 sessions. Yesterday confirmed the previous days more significant move. For stocks =Bearish
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped. BDI is in free fall from @4200 to  2547 yesterday. This is a huge -39% drop in 5+ weeks.  Often a leading indicator for stocks. Now at/ just above a support level. Rate of fall declined yesterday. This index often makes slow changes, so diminished decline (@40% less) could be the start of a reversal. However, clearly long term  = Bearish

Reading the Tea Leaves-

Apple computer seems to be single handedly keeping this market afloat. It’s one of the stocks on YOUR Stock List. However, emerging markets especially China is still the key to worldwide growth.

The mantra continues to be watch FXE (EURO currency ETF) and UUP (US currency ETF)

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekend

Have not yet had a chance to Update over last weekend but there are NO positions held at this time

DGP is ETF that is double long gold. Investors411 plans to buy the dip in this ETF.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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June 22, 2010

Something Wicked This Way Comes

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , ,

The list of photos above on financial reform was from Dylan Ratigan’s MSNBC show. Obviously you can add to list.

Financial Reform DOA

Simon Johnson and the folks at the Baseline Senerio have thrown in the towel on financial reform. Virtually every Republican caved into the shadow banks lobbyist, but the real disappointment - so did Obama, Geithner and Summers and many Democrats. It’s disheartening to read that the Obama administration helped kill Kaufmann/Brown legislation and other substantive reforms.

There may be a few crumbs that the shadow financials have lost, but opaque casino capitalism where your FDIC dollar in banks insures their trading of highly leveraged derivatives will thrive – Privatizing gains and  socalizing losses continues. Shadow financials, obviously would rather trade derivatives than make less lucrative transparent loans to homeowners and buisnesses.

The shadows of over leveraged, opaque, Casino capitalism will thrive in the coutry that is/was the leader of the free world. For the future, let’s borrow a line from Shakespeare’s Macbeth- Something wicked this way comes

Tea Party Patriots and Deficits

Deficits are bad. No question. Building a future on growing debt if you own 50% of the worlds weapons leads to one of 2 things – You bankrupt the future, or you kill your debtors. I suppose you could find a third way where you hold a gun to the head of a debtor, but after a while somebody’s going to kill somebody. – Again – Something wicked this way comes

However,  Before you worry about your debt you have to worry about the soundness of your financial system and keep it from collapsing.

  • Fixing financial problems and giving us a fundamental transparent capitalism would enable real transparent, democratic, economic, growth.(see above)
  • Increasing debt to keep our financial system (even though it was/is a shadow system) from collapsing and creating a second great worldwide depression was more critical

This is what TPP’s can’t understand. We’ve prevented a worldwide economic meltdown, but we haven’t fixed the system. These two priorities are the foundation of economic growth and therefore supersede deficits.

You want to cut military spending, put a means test on social security/medicare, raise taxes to what they were under Reagan – great. It will cut deficits.

However cutting the National Endowment for the Arts, cutting funding for some pork project, screaming drill baby drill is NOT going to decrease the $13 trillion deficit in any substantive way.

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 -0.08% down
NASDQ -0.90% down
S&P 500 -0.39% down
Russell 2000 -1.03% -

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

Technicals, Fundamentals & Analysis

The news that China was devaluing its currency announced over the weekend got sharply tempered. As uncertainty over the China move grew, so did the dollar and the algorithms used by the “black boxes” that control 80% of stock trading kicked in and sold stocks. A triple digit Dow gain faded into a loss = Bearish

This is hardly the first time the Chinese and economists have sharply tempered a government statement about devaluing currency. Let’s take that feather (for now) from Obama’s/Geithners cap and wait to see what happens as the G 20 nations meet.  This also toasts the Fearless Forecast for this weeks trading.

The reversal in the dollar (See below) could mean an overall change in market outlook, especially if the dollar moves higher again today. Today would be confirmation day of the dollars move higher yesterday.. Right now the major institutions  that run the markets have set their stock market algorithms to currency fluctuations.

FXE – The ETF that tracks the Euro sure looks like its starting to turn and head lower.

Bottom Line – The one way to put the odds in YOUR favor that has a reasonable chance at success in stocstoks/ETF’s is to use the MO. The higher it goes the more you sell, the lower it goes the more you buy. Obviously NOT a hard an fast rule, but a good general guide. Currently, as explained above, currency fluctuations are dominating trading.

Significant Indexes

  • McClellan Oscillator (MO)fell to +35.08 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. Clearly more overbought than oversold, but has pulled back from overbought levels.
  • US Dollar –  The dollar rose yesterday +0.43% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Dollar up = stocks down and visa versa. Yesterday – “The dollar seems destine to fall to its 50 day moving average which is $1.06 lower and rising.” The dollar fell to within 0.39 of its 50DMA to $85.01 then rallied a significant +0.94%..  This was the largest gain in the dollar in 11 trading session. For stocks = Bearish
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped is in free fall from @4200 to @ 2600 yesterday. This is a huge -38% drop in  Often a leading indicator for stocks. Now at/ just above a support level. Clearly long term  = Bearish

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekend

Have not yet had a chance to Update over last weekend.

ETF to watch today is the China ETF - FXIup +3.48% yesterday. The stock from Your Sock List is China’s BIDU

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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