Investors 411 Blog

by Barr Jozwicki
May 29, 2012

Helicopters & Dog Poop

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

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Germany/Berlin

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12 top Thoughts on

Berlin/Germany Trip

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  • More outdoor Cafe’s than Paris – Wide sidewalks.
  • Phenomenal tram/train system – Moves millions each day
  • Lots of Graffiti – Origins from Berlin Wall – Most of it art work, but lots trash.
  • No slums – I couldn’t find any in 9 days.
  • Absence of smog – From vistas you can see for miles without cloudy brown scum.
  • Forest in center of city and each major neighborhood has huge park – Mine has a Beer Garden in the center.
  • Beware of cyclists (lots) – Separate bike lanes everywhere. – Germans obey pedestrian signals
  • Streets/parks are safe to walk anytime (Homicide rate 6X less than USA)
  • Most expensive baby carriages I’ve ever seen. Lots (More on German Health care later)
  • Best behaved dogs (mostly smaller) I’ve ever seen – But beware it takes a day/two for them to cleanup dog poop.
  • You can carry open beer anywhere (Street/tram)
  • Large immigrant population (@12% like USA) Like USA they seem to be second class citizens.

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Mucho Thanks to my

pregnant daughter and her guy

for hosting/putting up with me.

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I understand why you chose

Berlin as a place to live.

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Standard German joke – The German police discharged their weapons 87 times (low crime rate) last year – Once at a fellow German and 86 times at Greeks.

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STOCKS

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This month’s Atlantic Magazine

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Why The USA has tools to Fix

Its Economy and

Europe Does NOT

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The Answer lies in the

Activist Fed Bank

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Both the European Central Bank (ECB) and The Fed have the power to set interest rates. The singular difference in this case is the Fed has creatively/controversially printed money to solve/paper over our fiscal/banking crisis.

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Over $7 trillion – Detractors

$2.9 trillion – The Fed

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It’s why you often

see this cartoon of

Helicopter Ben


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  • As a stock investors/trader you have to give Bernanke/the Fed lots of credit. Every time they have directly stimulated the economy/printed money -QE #1 & 2, Operation Twist, (and other ways) stocks have gone UP
  • Also, along with the Obama stimulus/tax cuts and other measures, GDP has gone from from a -8.9% to a relatively steady +2%.

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The Case against Fed Intervention

Inflation

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  • The Fed’s critics (mostly far right)  starting with TARP have screamed INFLATION will come -
  • Examples – WSJ (The Bond Vigilante editorial) MS (5.5% inflation by end of 2010) Bond King Bill Gross, S&P downgrade of AAA rating, of course Republicans, especially Ron Paul.

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Problem is year after year

They’re WRONG

NO Inflation has happened

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  • Consumer Price Index (CPI) measures inflation and it stands at @2.3%. Our 10 year T bill stands at less than 2%.
  • Our dollar is a bit weaker (you could argue that this is good for the USA) but by no means has it melted down. (currently moving higher)
  • DEBT – One reason our Debt is not a Clear and present Danger is that if you adjust for the rate of Inflation 2.3% and how we pay for debt – 10 year Treasury bonds >2.0% (shorter term Treasuries even LESS) we are actually paying down the debt by at least +0.3%

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The EU’s Problem

Unlike our Fed

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No Direct Intervention

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  • The EU has economically sound countries and its PIIGS – The S in PIIGS stands for Spain
  • I in PIIGS stands for Italy (EU’s largest economically unsound country). It’s debt is @120% of yearly GDP (ours @100%)
  • Italian bonds costs Italy (according to Megan MeArdle in this months Atlantic) 5% of GDP each year,
  • Japan with more than a 200% debt/yearly GDP ratio has a more interventionist central bank. Japan had a 1.0% growth in GDP last quarter (smaller than USA, but more than Europe)
  • Japan has had low interest rates for a decade so debt is manageable. (There is a case for higher interest rates – but that’s another editorial)

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Bottom Line

Other problems have

NOT been mentioned

But

If the ECB does NOT institute

more direct intervention

Remember What happened to the

Dodo Bird?

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PAUL’S Corner

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[Sorry this was supposed to run on Friday, but there was No 411 in Friday (Editor)]

As we take off a few days for the 1st official weekend of summer let’s take time to remember our fallen heroes and all of the men and women who have served our country.

A quick review of the charts we find the following stocks from YSL are looking decent and should be watched once this correction is over.

DDD

DLTR

HD

LEN

MNST

TSCO

From the April List

FL (for you Jim)

SWI

AKRX

A few extras to watch

BNNY

ITB

MDVN

ROST

XHB

TNGO

SPB

PATK

AVD

Disclaimer – you know the drill, any stock mentioned is for education only and if you buy any of these dogs…..


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Investors411 currently focuses on the yield of the Spanish 10 year bond as our canary in a cold mine. In a globalized world this rate strongly impacts Europe and less strongly, but significantly the USA. The rate would have to close back below its support at 6.31% for 411 to consider a NEUTRAL upgrade.

Currently you can find the Italian 10 year bond rate here Last look at &:00AM EDT it was 6.46%

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Longer Term Outlook

3 months+

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CAUTIOUSLY BEARISH

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AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK & POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMMAR  ERRORS.

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December 7, 2011

Osawatomie

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

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Warren, Roosevelt and

Obama

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Osawatomie Kansas is where Republican President Teddy Roosevelt made his big speech on income inequality – A New Nationalism –  101 years ago. Elizabeth Warren has echoed those words in a 2 minute video - The Debt Crisis and Fair Taxation.


Yesterday at Osawatomie Obama finally joined the chorus.


You can see the “best speech of his presidency” video and text at The New Civil Rights Movement. NYT lead editorial HERE.  Huffingtpost HERE From the later some observations and quotes -

Obama presented himself as the one fighting for shared sacrifice and success against those who would gut government and let people fend for themselves. He did so knowing the nation is riven over the question of whether economic opportunity for all is evaporating -

“Throughout the country, it’s sparked protests and political movements, from the tea party to the people who’ve been occupying the streets of New York and other cities,” Obama said.

“This is the defining issue of our time,” he said in echoing President Theodore Roosevelt’s famous speech here in 1910.

“This is a make-​or-​break moment for the middle class and all those who are fighting to get into the middle class,” Obama said. “At stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home and secure their retirement.”

Obama drew a sharp contrast between his “New Nationalism” and Mitt Romney & Republicans who believe “business unfettered will easily bring back Jobs and prosperity.”(NYT quote)


Rick Scott

People in Florida have learned their lesson of what happens when you put a right wing, unfettered, free market, businessman in the Governors office. In just three short years his poll numbers have dropped to the lowest in Florida history 26%.

It took him long enough but

Obama is finally talking the talk

Can he walk the walk?




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STOCKS

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The Front page of the NYT has an image of German chancellor Andrea Merkel with the following quote –

[Merkel]appears to have adopted a strategy aimed at remaking the euro zone in her country’s likeness.”

There is a major summit going on in Europe that ends on Friday. US Treasury Secretary Tim Geithner is there. – Like all the other summits there will probably be no clean resolution to the Euro debt crisis, but perhaps some small steps forward.

Bernanke vs. Bloomberg News – Two weeks ago (again thanks to Robert H for the heads upon this) Investors411 featured Bloomberg news articles on “secret debt.” The Fed chair has challenged them and Bloomberg News has  a coherent replied.

LINK

The CNBC Market cheerleaders are featuring the headline – Portugal Yield Dips; Strong Demand in German Auction” Willing to bet that our Fed is directly or indirectly responsible for bond purchases.

Strong correlation between Europe and US stock opening price

Germany’s DAX Down from open, but up +0.43% at 6:20 AM EST

DAX down - 1.40% at 8:45 AM EST

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Reading The Tea Leaves

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Our #1 technical forecasting tool, the McCellan Oscillator fell to +2o.81. 50DMA at +11.37NEUTRAL

There’s lots of room for the market to move higher despite last week’s big gains. We need to hit +60 on the MO before you start to worry about being overbought. For more on MO see Strategy section of blog

Interday trading pattern has been a higher open that gets sold into over last few days. It’s bearish. The benchmark S&P 500 is directly below strong resisistance (the 200 DMA) and stocks have failed to crack this level – again short term bearish sign.

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Current Positions

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YSL #7 is out and Paul has been updating it in the comment section of the blog. – Some excellent choices here.

SSO – (ETF that is @ 2X long the S&P 500) Bought, on dip at 46.20

USO – (Oil ETF and UCO 2x oil) under consideration on dips.

NB - All of Your Stock List #7 with links to charts is now on the Positions Section of blog. (Scroll down)


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Longer Term Outlook

3+ months

The Fed has seemingly committed to do whatever it takes to hold things together. From US equities to the European Union.

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CAUTIOUSLY BULLISH

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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 GRAMMAR  ERRORS.

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December 5, 2011

The Grand Slam Of Grand Slams

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

“The Grand Slam

of Grand Slams”


Dustin Pedroia’s Grand Slam vs Yankees

No this is NOT about Baseball,

but about a financial expert/reporter/editor Dylan Ratigan who was last featured in this blog on September 28. His Rant is the

“Grand Slam of Grand Slams.”


Dylan Ratigan

Wendy Thompson Anderson brings up the August on Air Rant of Ratigan in Investors411 comments section.


Her link to the Ratigan’s Rant.

‘Tens of trillions of dollars are being extracted from our financial system…

Check out Ratigan’s award winning financial background.

If you want to take action you to help

  • Join Get Money Out of Politics, I have joined along with 250,00o+ others
  • Wendy and her OWS friends deserve consideration.
  • You can pass on the Ratigan Rant to others.

Yankee Bob

Yankee Bob’s original editorial has been replaced with the following on Ratigan’s Rant.

Dylan Ratigan’s rant is a grand slam. It’s the Grand Slam of Grand Slams. It is inarguably right on target. Not only is it must see TV but it’s absolutely right on.

I have been saying for months that a 5th grader could solve our economic and social woes. I still believe it. So why is it so hard for our political class to do so? It’s the money!! IT’S  THE MONEY!!!

It’s the money that prevents our politicians from acting  on remedies and even when they do, it’s the money that defeats the initiatives and defeats the individuals pursuing them.

IT”S THE MONEY. Our politicians are bought and paid for. They MUST chase huge amounts of money simply to exist. The  media is literally bought and paid for and manipulates public perception of issues not, for the public good but,thru the narrow prism of corporate interests…

Continued in today’s comments section of blog.




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STOCKS


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The Fed To The Rescue


Last Wednesday the US Fed lead a group of Central Banks with promised funding for trouble Europe. WSJ Story on this. Even China’s Central Bank helped although it said it’s same day action was not coordinated with other Central Banks. They lie. The only noticeable absent institution was the German Central bank.


How the Fed tipped its hand Monday


  • Investors411 last Monday brought to light the secret $1.2 trillion in loans to INTERNATIONAL banks over the 2008 meltdown. It’s only natural to infer that they would do the same for International or globalized banks in the EURO meltdown.
  • Of course. the globalized banking system is further interconnected through financial WMD’s – Credit Default Swaps.
  • Italy & Spain after reaching the 7% yield danger zone [where other European countries entered a “controlled defaults” on a hunk of their bond debt}  rallied on Monday for no apparent reason.
  • The single largest entity on the planet able to take action is the Fed and it was rumored to be involved, since no other less powerful entity (Germans, IMF, ECB or bailout fund) had done anything but jaw bone
  • The Fed’s role was becoming more apparent. It was only a matter of timing as to when they would PUBLICLY act.  If bond yields remain too high for too long in Italy and Spain their debt structure becomes unsustainable’

Therefore, we had reached critical mass (a meltdown was imminent as bonds crossed the 7% yield levels) It was now or never time for the Cavalry/The Fed.

Banks Get Bailed Out

People get Sold Out


The corrupt crony over leveraged phony capitalist system is getting bailed out again. The people of Europe who have an imposed recession (austerity measures) staring them in the face. Again the blackmail – If we don’t bail out the bondholders/shadow banks then the EURO will collapse and the resulting damage worse.

The threat of financial Armageddon has again forced bailouts. Behind all the bailouts is again the Puppet Master of a corrupt globalized banking system  - Ben Bernanke.

As Yogi Berra would say Déjà vu all Over Again.


Bottom Line Remains - 10s of trillions of dollars of wealth (See Ratigan Rant above) are being transfered under a phony, corrupt, over leveraged, privatize the gains and socialize the losses system. Banksters use catch phrases like “free markets” and capitalism” to hide the massive shift of money.

Germany’s DAX today up +0.54% at 6:30 AM EST

Up +1.00% at 8:45 AM EST

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Reading The Tea Leaves


Our #1 technical forecasting tool, the McCellan Oscillator rose to -2.58. 50DMA at +9.38 = Neutral

The MO has been an outstanding tool in helping to predict tops and bottoms. Investors411 will continue to use it as long as it works. However – This is a manipulated market so ALL technical tools are secondary. The actions of the Puppet Master are paramount.

From Last TuesdayFor now bulls rule … Bottom Line – Old Wall Street axiom

Don’t fight the Fed.

The Fed manipulated the puppet strings (some hidden others transparent) and the USA didn’t go over the cliff. Can they and their allies do the same in Europe? – They certainly picked a perfect spot to make a big move. Our MO indicator was at -100 or OMG oversold levels.


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Positions


YSL #7 is out and Paul has been updating it in the comment section of the blog.

EUO (double short the Euro currency)   1/2 position Bought at 18.60. Selling this position. Sold at 19.25 last Tuesday for @ +3.5% gain

Trades/Investments Under consideration-

  • APPL (long) AMZN (short) hedge trade.
  • GLD or DGP (double long gold)
  • SSO Double long S&P 500 – Will buy today

Woudda, Soudda Couldda entered more long positions on last Tuesday for Investors411 hypothetical portfolio. For now I settle for stocks that are trending well, but not over extended in YSL #7. Again watch for Paul’s comments on these.


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Longer Term Outlook

3+ months

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From Last Tuesday (AM) – BEFORE the giant Wednesday rally – The games afoot – But for now yesterday’s transparent Fed salvo – a giant worldwide equity rally – sure makes every investor remember four words -

Don’t Fight The Fed

The giant rally on Wednesday, forces another upgrade to CAUTIOUSLY BULLISH.

Buy the dip. The MO has a long way to go till we reach oversold. Paul’s phrase “You snooze You Lose” is appropriate.

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CAUTIOUSLY BULLISH

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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 GRAMMAR  ERRORS.

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October 11, 2011

900 Cities

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

900 Cities

The Occupy Wall Street has expanded to over 900 cities in the USA (CBS)

Boston was where the action was. Yesterday joined by students thousands marched and 100 including veterans were arrested for camping out last night. Frequent blogger Popeye was there for the march. Check out his remarks today in comment section of blog.

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Bernanke’s

Trickle Down Economics

The biggest stock market manipulators right now are the black box/HFT traders that have driven many investors out of stocks. These HFT’s don’t have a market bias, but look for certain conditions (Investors411 believes they use oversold/overbought as a major indicator) to make trades.

Our Central Bank – The Fed – and other similar national banks are perhaps THE major manipulators of stocks. By pushing for low interest rates and adding to the money supply they force additional money seeking a better than 0% return into speculative stocks. (& other methods)

Here’s how the trickle down is s supposed to work.

  • Stock markets rise
  • Top 5% of Americans own 90+ % of stocks (sorry figures are from my head and probably conservative)
  • They get richer and buy stuff – Top 10% of Americans make 50% of purchases. (top 5 to 10% own lots of stocks too)
  • The money is supposed to trickle down to bottom 90%

On the darker side - It doesn’t trickle down because many of the goods are made abroad. Jobs from profits also go abroad and foreign consumers are becoming more important that the bottom 90% of Americans.

On the brighter side - those of us who have limited amounts of money in stocks benefit from Bernake’s trickle down economics too.

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Stocks

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 +2.97% down
NASDQ +3.50% down
S&P 500 +3.41% down
Russell 2000 +4.37%

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Market Analysis

Focus on TechnicalsFundamentals & HFT’s

  • Major Major rally is weak volume. Obvious HFT & programed Trading participation juicing the move.
  • Since Monday when Investors411 stated there was the potential for a RISK ON trade the Dow has moved +1000 points higher.
  • Mea Culpa – The vote in Slovakia on bailout is today not yesterday. – A market mover. Alcoa the first of the Dow stocks reports today.
  • TrendKicking the can down the road on Greece is mana from heaven for HFT’s who can use every news items to execute short squeezes, pump and dumps or catching institutional traders with losing long positions. An extremely strong correlation exists between European and US markets.
  • Long Term Stock Trend - Yesterday we broke a two + month long trend of major indexes trading below 50 Day Moving Averages. Today is the confirmation day of that move. Remember when we broke out of the trading range on the bearish side in the last 45 minutes of the next day stocks rallied and did NOT confirm the move lower. Confirmation would be Bullish

Investors411 – Forecasting Tools

  • The PCR closed at +1.21 (Roughly - above 1.25 is getting Bullish and below 0.80 is getting Bearish. 1.00 = same amount of puts and calls. Over last two years the highest for PCR is @1.50 and lowest @0.60 - anything approach these levels shows change likely For more information on PCR LINK) 1.21 is just above PCR’s 50 DMA= Neutral

The McClellan Oscillator (#1 forecasting tool)

  • (MO) exploded  to +51.57 (Rough estimates =-30 somewhat oversold, -60 oversold, -90 OMG oversold & +30 somewhat overbought, +60 overbought and +80 OMG overbought) = Neutral/Bearish

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Reading The Tea Leaves


Short Term Outlook

days, week+

  • MO clearly entering Bearish or reversal territory. No confirmation from PCR which is neutral.
  • Another major move (@250 Dow points) today would create a RISK ON trade. Those that can handle the risk should short the market or sell long positions. (see below under Traders)

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Paul’s Corner

HFT’s & Hamburgers

This past Saturday I had to pick up some parts for my tractor. On the way back I stopped at the local McDonalds for a quick lunch. I went to the drive thru and ordered a Quarter Pounder and a medium Dr Pepper.  I specifically mentioned several times “no cheese”. When the order taker repeated the order I asked if she cancelled the cheese. Yes, no cheese was her reply.

A short trip to the pickup window and I was on my way. I pulled around back and parked under a shade tree. A quick sip of the good ole Dr. Pepper and I was ready to dig into the Quarter Pounder. I unwrapped the burger, and much to my surprise, I found a thick gooey slice of yellow cheese dripping down the side of the bun.

What gives I grumble? How many times do I have to mention no cheese? Well rather than taking it back into the store I decided to hold my nose and try to down this horrid cheese burger. Each bite was horrible but it gave me time to think why it had cheese. The order taker listening to I tunes? The grill man who was trying to juggle a Saturday crowd? Or is it just an evil minimum wage girl at the pickup window who gave me someone else’s order?

Well after careful thought I figured it out, it was the HFT’s that ruined my Quarter Pounder. The same evil people from Wall Street that are making us lose money on every trade, have taken to middle America as vengeance on the great unwashed.

You think I’m kidding? HFT’s have made it unsafe to trade. Even the low volume stocks like NLY have massive HFT’s ripping us off every day. Aw come on, I’m not kidding. We blame the HFT’s for every move of the market these days. It’s not the news from Europe that turns the market on a dime, it’s not the fact the we made a bad buy, it’s not the fact we should have sold, it’s not Obama, it’s the HFT’s that have ruined wall street.

So do we stop trading—do we change restaurants— or do we pick the best stocks, buy at a good chart pattern, set stops, avoid greed, realize market action needs to be watched, and reject intimidation by the HFT’s?

Enough already I think I’m going out for breakfast and it’s not to McDonalds, oh before I go here is some GMCR business:

LINK

Now where are my car keys?

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Current Positions

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

See POSITIONS Section of blog for more on YSL#5.(scroll to bottom)

Traders

After 1000 point Dow move higher no one ever went broke taking profits

MO went from +9.87 to +51.57 = a gain of @43 points which roughly corresponded to a NYSE gain of about 3.5%. Every time the MO has approached +80 since the spring of 2009  major indexes have  fallen at least 5% in the next couple weeks.

RISK ON trade - Any Major rally today (@+250 on Dow) would create a trade for those that can handle the risk – Sell long positions (Take some profits) or short stocks using leveraged ETF’s like SDS and TZA.

Unfortunately the PCR is in Neutral and therefore NOT confirming a reversal. So there is additional risk.

KUDOSTo everyone who had the guts to go long on last Monday’s (8 days ago) RISK ON trade. You scored big time. Remember as the MO moves higher into oversold territory nobody ever went broke taking some profits.

Investors

Our Hedge Investment Theory – Technology will do better than financial sector over time. Going both  long and short. Hopefully covers us in up or down market. Thinking about exiting 1/2 of this trade that seems to be going nowhere. Sold 1/2 near open SKF for 79.05 & QLD for 80.2o TOTAL @0% gain.

  • Short Financials – Investors411 will use ultra short SKF (opened at 78.91 – now at 74.58
  • Long technology - Investors411 will use ultra long QQQ (tech’s) QLD (opened at 81.13 – now at 82.74)
  • This hedge play is almost exactly flat.

GLD or DGP – Looking for a buy the dip in gold – Central Banks in Europe, US and Japan are all at of going to 0% interest rates and injecting monetary stimulus (US holding off on QE #3 for now) This is bullish for gold. After breakdown has consolidated and moving back up (see chart) .

Disclaimer I buy everything in the hypothetical Investors411 portfolio. If stock is mentioned and I own it you will know.

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Long Term Outlook

3 to 6+ months

Same old mantra -Reasoning behind May 20th & Sept 22 downgrades still stand.

Bearish - Add to this Europe’s problems, Japan’s disaster, China’s slowdown, a rising dollar (bad for globalized US companies), & our broken opaque financial system.  Best hope for a significant move higher is the Fed to act significantly – inject more liquidity or Europe to come to some clear final resolution instead of kicking the can down the road.

Bullish -Congress Dysfunctional” – Former Sec. of State Gates, Fed Chair Bernanke, Sec of Treasury Geithner LINKHorrible for economic solutions to problems, but good for major US companies/stocks because it allows them free rein.

From yesterday  - NB - If the benchmark S&P 500 closes above its 50 DMA today (& I think there is a good chance for it to happen) the Outlook will change to NEUTRAL We closed well above 50 DMATherefore change to NEUTRAL

NEUTRAL*

*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(s)

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

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September 22, 2011

Danger Will Robinson Danger Danger

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

Federal Reserve Note, 1914, $10,000

Fed Reserve Note 1914

Assault On The Fed

Background

  • Bernanke,  received a minority (22) Republican Senate votes for his reelection as Fed chair last year.
  • Rick Perry has called the Fed actions “almost treasonous” LINK
  • Top two Republicans in both House and Senate have told Bernanke to stop stimulating the economy. (See above LINK)
  • Ron Paul and other Tea Party candidates have called for abolition of Fed.” LINK

Given

  • When Fed stimulus programs first started US quarterly GDP had fallen to between -4 & -5%
  • The benchmark S&P had fallen to 666.
  • 7 quarter years later US GDP rose from -5% to over +3%
  • The benchmark S&P rose from 666 to 1200.
  • Unemployment in same period went from over -700,000 to +200,000 a month.
  • Martin Feldstein [Reagan's Chief economist] Fed stimulus is reason stocks go higher and strong performance of US economy

Republicans/Tea Party Take over congress in 2010

  • Call for no compromise, focus on cutting government instead of stimulating economy, No tax cuts/stimulus for even small business or extension of payroll tax cut. (Obama Jobs plan) They threaten Bernanke.
  • Investors411 warns May 20th that stimulus will run out and downgrades stock outlook. Another downgrade today
  • GDP falls from +3.3% to +1.5% (last quarter), jobs from +200,000 to 0 created each month.
  • There is almost no sign of inflation in the USA as Treasuries are at their lowest ever.- The arguement used against stimulus
  • Richard Koo - warns that every time Japan’s government contracts money supply GDP fell. When government added money/stimulated economy GDP rose.
  • 100% no accident that this economy started to turn as the Tea Party started to rise.

Conclusion - It took the most massive government stimulus ever to bring us out of the Great Depression – World War 2.  Republicans are growing in power and that means a contraction in government spending. The Fed is under assault and they want Bernake’s head and any stimulus to stop. (No QE 3 – No tax cuts for small business)

We are being pulled back into the Great Recession by the withdrawal of stimulus. Both the end of Obama’s $787 stimulus winding down and QE 2′s end – Predicted on May 20th by Investors411. The rise of the anti stimulus (even tax cuts for small business) contract the money supply, Republicans is the catalyst behind this downgrade.

It doesn’t matter if Republicans don’t want any form of stimulus to heap blame on Obama/Bernanke for problems or they are true believers of cut government stimulus/spending and GDP will grow.

As long as the constrict the money supply side gains power, stocks and more importantly the economy will suffer.

Danger Will Robinson Danger Danger

Investors411 The Long Term Outlook is changed to CAUTIOUSLY BEARISH

Today’s meltdown, is only the start if there is no additional stimulus and we continue to contract the money supply then even the old 666 on the S&P could be challenged in the next few years.

The Lost In Space Robot (old TV Show) that shouted when danger was around went off with a huge commotion and shouted

Danger Will Robinson Danger Danger.

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Stocks

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 -2.49% up
NASDQ -2.01% up
S&P 500 -2.94% up
Russell 2000 -3.68%

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Market Analysis

Focus on TechnicalsFundamentalsHFT’s

  • Fed did pretty much what was expected (Operation Twist), but added word “significant “ to downside economic risk. Stocks toasted after Fed announcement and into close.
  • Moody’s downgrades BAC, WF, & C – Entire banking sector (ETF - XLE) huge drop - 4.16% Now directly above major support. If this sector breaks support today BEAR’s RULE
  • HGSI’s Ron Brown (from Paul) reminds us yesterday that the first move after a Fed announcement is often a “head fake.” But he didn’t have two data points above
  • HFT’s & pro’s can make more $$$ if they panic institutions & investors. XLE will break support and shadow banking sector will lead stock lower.

Longer Term Outlook

month, months

  • Repeat Same old mantraMay 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. For the Fed to act significantly – inject more liquidity - I’m afraid we need to see stocks do worse for that to happen.

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Paul’s Corner

Looks like the market thumbed its nose at Operation Twist and sharply sold off after the news.  Just a sell on the news or are we in for more trouble?  Ian Woodward posted a great blog last evening with very detailed analysis of what to watch for in the market action.

LINK

All sorts of talk coming out from the Republican candidates on how to create jobs, suggestions range from eliminating the minimum wage, reducing government regulations, lowering corporate taxes and more. Amazon.com has a distribution warehouse in Allentown Pa. Read about how they have created jobs and the new work place conditions we all can look forward to in the new reality.

LINK

HGSI is having another informative webinar next week Sept 28. You do not have to be a HGSI user to benefit from the free webinar. Here are the details:

Join us on Wednesday, September 28th from 8:00 pm until 9:30 pm for “Prospecting and Trading in a Weekly Timeframe” by Ray F Ebert, PhD.

Ray will share his disciplined weekly trading strategies using HGSI and other software. He will provide technical analysis of prospects submitted by the audience.

Earlier this year Ray was selected to be a “Spiker” on SpikeTrade, a trading community managed by Dr. Alexander Elder and Kerry Lovvorn. In his first quarter as a Spiker Ray won first place for equity and second place for points in the weekly competitions. He also leads the Washington D.C. area HGSI User Group.

Register at: LINK

Looking at individual YSL 5 stock action yesterday after the Operation Twist announcement caution is suggested. If you dare to play please use real stops and don’t keep lowering your stop if your stock sells off.  ZAGG is getting toasted at the moment and needs some time to settle down and correct.

Detailed YSL 5 analysis this weekend, maybe. Watch the comments section.

Remember, you are responsible for your investment decisions, and I am not. Please do your diligence, and please take ownership for your actions because I‘m sure not going to.

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I am exiting all long stock positions – Today’s meltdown may rebound, but the long term outlook remains bleak for stocks as long as the folks who want to contract money supply, are gaining power. (I’ll wait on GLD till it hits its stop/sell)

What would change this outlook is more stimulus from our Fed to Europe & USA. A realization that constricting money supply hurts stocks and the economy/GDP growth by a greater segment of the population. Unexpected GDP growth  Europe, emerging markets, USA.

HFT’s are obviously powerful enough to manipulate stocks up and down within a range.

_________________________


Long Term Outlook

(for US stocks only – not our economy)

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(s)

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

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September 21, 2011

Bernanke

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

Questions of the Day

Can this man and his fellow Fed Governors keep the world out of depression/recession and  more worldwide stock markets falling to the bears – pictured below???

Fed meeting concludes this afternoon with an announcement.

How long can the Fed keep the Kabuki Dance going with a shadow unregulated financial system at its core???

It’s hard to answer these questions in the long term, but in the short term US equities have run up against technical resistance (this summers high) and one important predictor of worldwide economic growth [copper prices] is heading south big time.

Our two forecasting tools (MO & PCR) are still in Neutral. So best read of the tea leaves is HFT’s, that dominate trading, have no bias.

However, the drop in copper signals further slowdown in worldwide growth.  Advantage Bears.


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August 29, 2011

Pinata hits Back

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

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.

_________________

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.

____________

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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August 26, 2011

Caught

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

Bernanke Speech today in Jackson Hole

HFT’s Caught in the Act.

Anyone’s whose read Investor411 nows about how much of the market is controled by High Frequency Traders HFT’s The damage they cause, and the loss of income to ordinary investors goes under reported

Zero Hedge, may not be your cup of tea (its not mine) as a web site, but they have graphically shown how “quote stuffing” (one of the ways your investment is manipulated in their favor) works LINK to explanation and the charts are theirs.

The explanation is rather technical but the bottom line speaks to the lack of stock market integrity

___________

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

The Dead Cat Bounce Didn’t bounce yesterday

Index Percentage Volume
Dow -1.51% low
NASDQ -1.95% low
S&P 500 -1.56% low
Russell 2000 -2.62% -

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Technicals, Fundamentals & Analysis

Shorter Term Outlook.

day/days/week

  • Very little to add. All eyes on Bernanke and what he says today (see Jackson Hole reference below)
  • Technically we have formed a double bottom for most major indexes and that’s bullish.
  • Very low volume shows even more control of markets by HFT’s
  • The McClellan Oscillator (MO) fell to to -1.04 (-30 somewhat oversold, -60 oversold, -90 OMG oversold)( +30 somewhat overbought, +60 overbought and +90 OMG overbought)  = Neutral
  • From Yesterday Reading the Tea Leaves-US stocks sure has all the feel of a dead cat bounce… Also first hurricane in a decade to hit NYC not bullish. The dead cat didn’t bounce. Today is all about Bernanke and how the algorithms the HFT’s use play off what Bernanke says. Tea leaves say bear win.

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.
  • RepeatReading Tea LeavesI believe we need another 5 to 10%  (now @ 4 to 8 %) drop to the downside before the Fed will intervene more strongly (QE #3 or something else) Perhaps this will come at the end of the week when there’s a meeting in Jackson Hole Wyoming. LINK So still CAUTIOUSLY BEARISH

______________

Current Positions

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

.

NLY Annaly Capital Mgt. Ultra high dividend stock – So far NLY has held up reasonably well through current stock market slide. NLY is the only position in Investors411 hypothetical portfolio. Easily outperformed S&P 500 over last couple months 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) From Yesterday  going to start to nibble a little on dip today and add more on further dips”. Bought dip as stock near the open at 167.05 a half position

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 also ow SDS & TZA (ETF’s that double and triple short the market) as hedges.

_______________

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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April 28, 2011

World’s most powerful

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

Bernanke

The Fed’s First Press Conference

This was THE EVENT and hyped in financial circles almost as much as ” the Pope on SNL”. It’s big.

The Fed set’s interest rates, makes huge loans to big banks, buys treasuries, and basically prints money (purists would say the Treasury does that) Many argue that Bernanke, like Greenspan before him, is the world’s most powerful individual

Some Reviews of Bernake’s speech links

Some Results

  • Stocks moved higher
  • Gold/silver moved much higher
  • The dollar fell
  • Obvious applauds for being more transparent
  • No big surprises

The press conference, of course, did nothing to change hardened critics and advocates of the Fed. Bernanke is probably very happy with outcome.

Some  major points and comments.

  • He stated -” QE #2 is ending June 30th.” PERIOD. Opinion - If things go badly there will be more liquidity injections (QE#3) perhaps at the longer end of the yield curve (longer term treasury bonds) to help mortgage rates.
  • He compared 2008 dollar lows to todays low and said the period the dollar went up in between was just a flight to quality. Opinion – Although the Fed talks a strong dollar they would allow it to go much lower. Many ramifications here, but bullish for US stocks, and very bullish for gold silver.
  • He moderately lowered GDP outlook for USA. Opinion – He’s right
  • A little bit more hawkish on inflation, but stated commodity “account for pretty much all” of the increase in inflation and focused on other reasons than Fed policy is not responsible for inflation. Opinion – There are other reasons like revolutions and a growing emerging market demand creating inflation, but the falling dollar adds to this, especially abroad.

There was good, bad and ugly side of this and every speech. Some of these details will be worked out over the next few weeks.

The bottom line just for investors – It’s bullish for US stocks, gold/silver, and commodity prices

________

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 +0.76% down
NASDQ +0.78% up
S&P 500 +0.73% down
Russell 2000 +0.62% -

_____________

.

Technicals, Fundamentals & Analysis

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

  • The dollar fell again to another a three year low.
  • Now a mantra US dollar in clear long and short term bear run. – Good for US stocks, gold/silver and most commodities. in short term.
  • Since November Investors411 has beat the drums for bulls because of the Fed zero interest rate policy and injection of liquidity (QE2) This continues.
  • Some Reviews of Bernake’s speech links – Financial Times,  Seeking Alpha, & Reuters

_________________

Shorter Term Forecasting Indexes

There are hundreds of forecasting tools, – These two tools have worked

When they stop working Investors411 will use other Indexes

  • The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] -0.43 yesterday. Another a three year low. Clear longer and shorter term bearish trend. For US stocks = Bullish
  • McClellan Index(MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] Fell to +36.71.  Getting up there but still = Neutral

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.

Reading The Tea Leaves

What to watch today

  • UUP - (Tracking ETF for dollar) Remember - Usually the dollar is a contrarian indicator for stocks. Any major fall may give temporary help to US stocks, but a major breakdown also signal major structural problems with the USA

From yesterday -  ”the call is Bullish across the board…&…It may be that a 10% correction in silver (SLV is the ETF) is all the correction we get. ” Silver/gold exploded higher, stocks rallied and the dollar fell.  YSL #4 should continue to outperform.

FutureAnything that holds onto most of the gains yesterday is bullish today. The dollar trade has easily become the most critical factor influencing equities and Fed manipulations are sending the dollar down. SLV is a juggernaut. Congratulations to all still holding SLV or AGQ.

Since QE2 began Investors411 has been far more bullish than most investment sites

This accurate policy will continue as long as the dollar gets devalued by Fed manipulations.

___________________

Paul’s Corner

You can read Paul’s daily remarks in the comments section of the blog. Here’s his outlook on stocks

Well well well what an interesting day. That over sold rip off of a dog SLV comes in with a 5% gain after Bernanke indicates he will continue to give away the farm to the banks. Watching the last hour or so of SLV trading  it’s sure looks like the black box traders are at the controls.

-  21% (315) of the S&P 1500 stocks are now in an over bought condition, but we  are still a wee bit away from a market peak.

- Many of the oil related stocks took a hit at the open when Conoco Phillips missed estimates because of trouble in Libya. I sold NBR at the open, they reported last evening and missed estimates for  the same reason. By late afternoon many of the oil stocks did recover, but it looks like some damage has been done.

The top group in my high demand search was the  Health-Bio/Genetic group with 10 % of the top 100 high demand stocks for April 27. Here is the list, sorted in alpha order:

Health-Bio/Genetic (10.00%, 10 securities)

  • Amgen  Inc. (AMGN)
  • Biogen Idec  Inc. (BIIB)
  • Celgene Corporation (CELG)
  • Cubist Pharmaceuticals  Inc. (CBST)
  • Incyte Corporation (INCY)
  • InterMune  Inc. (ITMN)
  • Momenta Pharmaceuticals  Inc (MNTA)
  • Regeneron Pharmaceuticals  I (REGN)
  • United Therapeutics Corporat (UTHR)
  • Vertex Pharmaceuticals (VRTX)

Second group  was the semis.

Semiconductor-Mfg (6.00%, 6 securities)

  • Altera Corp. (ALTR)
  • Atmel Corporation (ATML)
  • Cypress Semiconductor Corpor (CY)
  • Entropic Communications  Inc (ENTR)
  • Microchip Technology  Inc. (MCHP)
  • Taiwan Semiconductor Manufac (TSM)

ALTR is a YSL 4 member and you could have bought it last week sitting on the 50 and you would have a 13.4% gain! (SLV has had a 9.3% gain in the same time frame so don’t think you have to chase the latest fad!)

None of the “Oil” related stocks made the top 100 list so it does appear we have some rotation going on. Many of the semis appear to be raising from the dead.

All of the major indexes finished up with gain,  the color “green” is the predominate color on the various HGSI spread sheets, positive earnings reports are coming in  and Bernanke turned on the faucets again. Happy days are here again?

Disclaimer: Please see below……

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

___________________

Positions

SeePOSITION“ section of blog (at top of page) for lists of potential stocks & ETF’s including “YOUR Stock List.”

Disclosure - I have personal  positions in REMX,  SLV (smaller), DGP, UWM, RJA and manage a fund that has a 5 year position in GLD

_________________

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Longer Term OutlookCAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

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November 8, 2010

Election Disaster in Two Words

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

Larry Summers

Lord Vader/AKA Larry Summers

If their is one man to single out for the lack of coherent response to a massive destabilization of the worlds economy its Barak Obama’s now former economic chief Larry Summers.

Last Tuesday a mass of increasingly bitter, alienated and emotionally driven people voted for change. Few realize that Lord Vader and his oligarchy of Casino Capitalists won the election.

Summers stands at the apex of the triangle of “hugely damaging conflicts of interest of the senior academic economists who move among universities, government, and banking.”

Every Investors411 reader knows about the legion of lobbyists corrupting government and now the legions from academia who are bought by the shadows of casino financial capitalist.  Millionaire economists, Fed officials, and university professors who “refuse to disclose their conflict of interests”

See Charles Ferguson’s “Larry Summers and the Subversion of Economics” editorial (a must read) for a broader list or see Inside Job docudrama.

Perhaps the most damaging moment (and it is a hard call) is when the head of the International Monetary Fund, Raghuran Rajan in front of a field of world’s top economic experts (2005)  including Greenspan, Paulson,  Bernanke, & Geithner is shouted down by Summers for warning that the impending 2008 financial shadow bank meltdown is coming.

If you’re a true blue Democrat then Summers is Benedict Arnold. But I prefer to look at him in a battle between true transparent capitalism and the casino, opaque, oligarchy of monopolists  that is increasing their wealth and stranglehold over working Americans.Economist John K Galbraith opens his editorial on the election with the following paragraph –

The original sin of Obama’s presidency was to assign economic policy to a closed circle of bank-friendly economists and Bush carryovers. Larry Summers. Timothy Geithner. Ben Bernanke. These men had no personal commitment to the goal of an early recovery, no stake in the Democratic Party, no interest in the larger success of Barack Obama. Their primary goal, instead, was and remains to protect their own past decisions and their own professional futures.

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 +0.08% up
NASDQ +0.06% down
S&P +0.39% up
Russell 2000 +0.43% -

Technicals, Fundamentals & Analysis

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

US Stock Markets -

King dollar rallied on good economic news (employment report) and some bad news out of Ireland/Europe forcing the Euro lower.

Stocks held their own despite a a major rally in the dollar. (a surprise) = Bullish Sometimes there is a delayed reaction and certainly if we have another major move higher in the dollars the reaction of stocks will not be as benign.

Huge trading volume  move higher into the close Friday. Technically this is usually bullish It is also highly unusual because major US indexes are trading so far above their 50 day moving averages or Bollinger Bands

The hope – Obviously a lower dollar means US goods cost less abroad and major exporters will benefit. Stocks go up, investors/traders/401k’s/etc. get wealthier and Americans spend more on US economy & employment improves

The curveballMost of the wealth is going to a super rich oligarchy that invests $ in faster growing emerging markets, derivatives, Black Boxes, or cash rich companies that buy other smaller companies, eliminate workers of smaller companies and hire abroad.

Conclusion - Investors411 has pounded the drums ad nausea on how huge the 2008 credit crisis really is & the fact that no significant solution is in place to prevent it from reoccurring. – Therefore, there is likely to be more QE2 or a QE 3, 4, 5.

Fundamentally, US Stock win both ways – Economy/employment improves in USA and we don’t need QE 3, QE4 etc. The Fed keeps printing and dumping the dollar goes down and stocks improve.

There is, of course, an imbalance (possible inflation down the road) to print and dump. (see past Investors411), Europe could tank, or a dollar war develops into a trade war. But, right now it looks like print and dump will be the underlying force for US stocks for a while.

Sweet Pineapple Upside Down Cake – So bad economic news in USA turns into good news for stocks because it means more Fed printing and dumping.

Repeat From Friday – The Black Box/High Frequency Traders are now going to get some resistance from what’s left of regular traders/investors (the other 20 to 50% of stock traders) and they are worried.

  • Insider selling is at all time high.
  • S&P is at major resistance – this years high.
  • Many Oscillators and Indexes are showing overbought US markets
  • Our own MO while not in overbought territory yet is the highest in over a month.

US stocks used to be controlled by normal investors and traders – If it still was I’d be ducking, covering & selling big time.

Employment numbers for last month on Friday +151,000 jobs rate (positive surprise) & a continued -9.6% unemployment rate More here

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar rose a significant +0.94% yesterday. Dollar broke its support level last week,but on Friday is back to the same resistance level (Remember its called support on the way down and resistance on the way up.) Trend for stocks = Bullish
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets,&  exporting countries]Fell  -0.61% Friday. BDI now consolidating after bull run that began in June. The BDI has been overshadowed by the dollar moves. Sitting directly above major support. Longer term Pattern now= Bearish/Neutral
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Fell slightly +35.51% Friday. Getting close to overbought (more NEUTRAL than bearish) = Bearish/NEUTRAL

Reading Tea Leaves.

The dollar bulls rules – This is because the Fed has announce it will print & dump $600 billion into economy. Maybe more or less depending on how the economy does. this puts strong pressure on dollar to go down. Other factors obviously influence currency markets, but right now QE 2 (print and dump $) is the bull in the china shop.

Watch tracking stock for dollar - UUP during day and keep an eye on MO nearing overbought levels. However for the short term -

Short TermStocks are way over extended. I’ve never seen major indexes trade above their Bollinger Bands for more than 2 or 3 days before falling. We have two days in a row above these bands. Another way of putting this is we are far too extended above 50 day moving average. Everyone who believes in technical analysis knows about this Bollinger Band stuff and they and are telling those they advise to sell.

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)

  • EWS (Singapore)
  • SSO (2x what S&P does) Sold 1/2
  • EEM (emerging Markets)
  • TYH (3X tech stocks) Sold 1/2
  • DGP (2x gold)

The more highly leveraged the ETF is the more it is a shorter term trade (days/weeks) instead of a longer term investment (weeks/months) DGP is the ETF most likely to turn into an investment.

One strategy has been to lock in 5 to 10+% profit on the trades by selling 1/2 the ETF when/if it reaches those levels.

Traders would need a dip in MO before nibbling some more.  Investors, preferably, would like an MO of near -60 or higher before investing. Traders anything close to zero (highest risk) to -30 on MO

However first concern for traders is to lock in profits or keep tight stops on stocks and highly leveraged ETF’s.

Personally – I’ll probably  be  selling today, hopefully into an AM rally, the rest of the leveraged ETF’s. and perhaps 1/2 gold. I know MO is not at +60, but, the Bollinger Band/over extended from 50 day moving average means a short term reversal/consolidation. .

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.”

Announcements of purchases/selling can first be seen in the comments section of the blog and/or if you are on the private mail list. If you’d like to get on mail list send me an email – see HELP/EDITOR section of blog

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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