Investors 411 Blog

by Barr Jozwicki
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 9, 2011

Panic on The Street

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

  • What was the world’s largest bank sank 20.32% yesterday. The financial sector 8.95% and the stock market had a top ten bad day. Logic looks for an oversold bounce in stocks today. But you have to wonder if its going to be a dead cat bounce. Remember we NEVER fixed the problem in the shadow banking sector and now banks are even way bigger than before (too big to fail)

Standard & Poor's

  • Standard and Poor downgraded the USA’s bond rating. Investors bought both US bonds and the dollar (see below) in defiance of the downgrade.
  • The stock market went into meltdown for two reasons.  High Frequency Traders (see below) and the realization that austerity measures (contracting the money supply endorsed by the right wing) instead of producing more jobs would hurt the economy and stocks.

  • Syria continues a brutal crackdown on democracy demonstrators. It’s been condemned by the Arab League, USA and many others. Latest

Bottom Line – The USA is going to to use austerity instead of trying to grow out way out of economic crisis. Like Herbert Hoover we are going to leave the supposed “free markets” untouched.  The fears of the end result has been demonstrated by the fall in stock prices since the manufactured budget crisis passed.

NB - This was sent in by RF and its fun Aug. 8th Borowitz Report

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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

Index Percentage Volume
Dow -5.55% up
NASDQ -6.90% up
S&P 500 -6.66% up
Russell 2000 -8.91% -

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.

Technicals, Fundamentals & Analysis

Shorter Term Outlook.

day/days/week

  • Every technical measure out there says we are in a climax sell off. Volume exploding as markets sink.
  • What stocks need is a fundamental catalyst, to give potential investors hope. The Fed is the strongest entity out there to halt the slide. But something like QE#3 may soon become too little too late.
  • This market is dominated by High Frequency Traders, that are pumping and dumping stocks in micro seconds. Jim Cramer opened his CNBC show with commentary on this. Here’s a video link

Cramer like anyone who is a traditional value and/or technical investor  realizes that the game is now rigged against you by HFT’s. – Why play when the deck is stacked.

  • There is nothing you can do about this because the government for years  has blessed this as “free market” trading.  It has totally shattered real investing. It completely obliterates the kind of analysis that Cramer and technicians use.
  • How does your understaffed, under paid government do anything about HFT’s? All the far right and many Democrats want to do is cut all regulations and regulators.
  • For Traders - Fast Money (CNBC – 5 to 6 PM EST) show was listing examples of trades that happened yesterday where stocks dropped up to 10% in micro seconds. Then recovered in microseconds. This blows out a stop/sell order and makes a mockery of day and swing trading.
  • The McClellan Oscillator (MO) chart fell to to -142.58 (-30 somewhat oversold, -60 oversold, -90 OMG oversold). This is the lowest the MO has ever been. = Bullish
  • $USD The Dollar rose again +0.36% yesterday (+/- 0.50 is a significant move and the dollar is usually a contrarian indicator) Technically we have moved higher for two weeks. Absolutely no impact from the S&P downgrade on the dollar. Overall = Neutral
  • $TNX – The benchmark 10 year treasury bond actually went down in yield -8.59%
  • Reading The Tea Leaves - Neither the massive bond or currency markets reacted negatively to the S&P downgrade. In fact they moved in the opposite direction as people bought both bonds and the dollar. Logic would say that the algorithms that the HFT’s use would recognize massively oversold markets and rally today. But what happens next is up to the HFT’s because most of what used to be your typical investors have left the building.

Today – Oversold markets bounce back, but is it another dead cat?

  • Never Forget its is High Frequency Traders (This group is made up of high net worth individuals and entities) that now account for the vast majority of trading and manipulate trading

Longer Term Outlook

weeks, month, months

  • Repeat - May 20th forecast still stands. The recent Washington debt crisis debacle has focused everyone on cutting the money supply.  Simple math – The less money that’s out there = less jobs = greater chance the “Great Recession” returns. European debt and emerging market’s inflation fears add to this.
  • Long Term Outlook Listed Below.

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Paul’s Corner

Well well well, to sum up this market I give you the latest E-Trade ad:

LINK:

Taking a look at Ian Woodward’s newest tool, %B for market evaluation, we find a very over sold market. Just how bad has the market dropped? Take a look at where the stocks in the S&P 1500 are in relation to their Bollinger Band:

LINK:

The bar graph shows  92% of the stocks in the S&P 1500 are below the bottom of their Bollinger Band and the “Pie Chart” on the right shows 100% of the stocks are below the middle of their Bollinger Band. That’s really over sold and shows you how much damage has been done.  See Ian’s latest blog for %B discussion:

LINK:

The HGSI software is probably the best software  searching and ranking stocks.  You can create your own searches but if you are lazy it comes with searches from Charles Kirkpatrick,  Larry Conners,   Morales & Karcher (Pocket Pivots) and Woodward and Brown.

Woodward and Brown has one search that I check every evening and gives you an instant snap shot of the day, it’s called “Best of Woodward and Brown”. This search gives you the top 10 stocks found on all of the Woodward and Brown searches from the day.

Here are the top stocks found on a  nasty day:  AKRX, BVN, EFSC, EXLS, MFN, NGD, QCOR, GOLD, RIC, AUY As you can see it was a flight to gold and a few Parma thrown in.

At 7 AM this morning we find futures sharply up so it appears the carnage is over….sure…..I’ll wait a few days before I venture back out onto the dance floor.

So what’s the market going to do today, futures are up, is this a new morning in America or just another lousy craft show? Let’s load up ThinkOrSwim, here we go folks another day of fun!

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.

______________

Current Positions

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

NLY - Annaly Capital Mgt. Ultra high dividend stock – It’s been shaky, but so far NLY has held up reasonably well through current stock market slide.

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) Obviously a mistake to sell and take profits. Every thing is way too volatile to buy now

Disclaimer - Personally I own  a group of dividend stocks including NLY. I have placed puts on all of dividend stocks I own. I buy everything in the hypothetical Investors411 portfolio. I also own some SDS & TZA (ETF’s that double and triple short the market) as hedges.

Expect a bounce higher today

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Long Term Outlook (for US Economy)

BEARISH

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Long Term Outlook (for US stocks)

CAUTIOUSLY BEARISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

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October 14, 2009

Market Update – Class Warfare.

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

Class WarfareEditorial

The most important stat this week (see yesterday) was from Bill Mahr reminding us 1% of the USA had 8% of the wealth in 1980 when Reagan took office. Now that 1% has 23% of the wealth

There is class war fare raging out there as the rich and the uber rich have through excess GREED dramatically altered America’s financial & economic structure. They are toasting the middle and lower classes.  In other countries like China and Brazil wealth is growing among the middle and lower classes. Unless we can fight back and change this dynamic America will continue to fall.

One of the major trends in history is when the majority realize just how badly they’re getting screwed by an oligarchy and they fight back. Sometimes like in the heath care debate after all the shouting tea baggers people start to realize just how expensive health care has become and the wonder why other people abroad are living longer from infants to seniors. Why does  it cost so much less for a better quality of life/health in similar countries abroad?

Bottom Line – Capitalism is the best economic system we have on the planet right now, but it need regulation and if left to itself = people are people and GREED runs wild if we don’t enforce regulations.

Your Comments

Popeye joined D .& Sherwehe on trillions going to fight wars instead to other causes? Check out the comments and join the debate.

Several of you have privately mentioned that I’m too tough on Obama. Sorry I think he deserves it. Others want me to focus more on health care – will do.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow -0.15% up
NASDQ +0.04% up
S&P500 -0.28% up
Russell2000 -0.34% -

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

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

Technicals and Fundamentals

Fearless forecast on earning season  from yesterday -“Expect other indexes to follow gold & Brazil. (Both gold and Brazil have broken out to new highs.)

Intel again hit a top and bottom line home run in their earnings report and forecast. Shadow financial - JP Morgan this AM seems to have also done better than expected. INTC up 5%+ in post market trading and JPM up 3%+ in pre market trading. Revenue for these companies is coming in better than expected. Its a regulatory and interest rate utopia for shadow banks/financials right now.

Perhaps even a bigger positive was the fact that tech giant Cisco bought a major telecom nuts and bolt company and actually went up. Almost always companies go down when they make multi billion dollar purchases. See Cisco buys Starent LINK A huge chunk of what happening is all those phones being sold in growing China market (and elsewhere) that seem to do everything including cleaning the kitchen sink.

CSCO fundamentally seems like a decent buy for those interested in stocks

Sure looks like he rally will get extended. Watch volume. Resistance levels Dow 10,000 could fall today and other major will probably see new yearly highs.

Put on your Rally caps and watch volume Today should be the day that we know if the money on the sidelines is willing to start to get back into stocks.

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI is @ 40% (I haven’t done the math) off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI nine day rally flattened out yesterday. It fell a -50 points yesterday and closed at 2646 . Even though a reversal seems eminent, we have technically achieved a higher highBullish for stocks & world trade

——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra Dollar up = US stocks down & Dollar down = US stocks up

The dollar reached a new yearly low (barely) last week and fell -0.45 % The dollar closed at 75.82. We have developed a support level just below $76 . The dollar closed below its support level. = Bullish for stocks

NB – Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.

Last year’s low was around $71, so there is a long way to go before the next major support level.

Positions

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

Our positions in gold GLD and Brazil EWZ are clearly out preforming US markets and our China/smaller S. Korea position. The later two are approaching new highs. Would buy more of GLD & EWZ on dips. On a purely fundamental basis financials should lead any rally and are therefore a decent short term trade

Added XLF (financials) yesterday (10%) of portfolio at 15.15. For traders I’ve also been playing FAS (3x financials) Bought the dip yesterday at 84.00 with a tight stop. Bought small position in MVIS (mentioned many times over last few weeks – recommendation sent in by one of you) – I missed the dip when away, so bought in advance of expected good earning reports.

Big banks and techs continue to be recommended areas. QID is an interesting play (2X NASDQ 100)

When/if the SPX or S&P 500 hits/gets close to resistance area of  1200 – would take some off the table. Long term ETF’s for China, Gold, & Brazil continue to be the best bet to buy on dips.

Right now GLD is the best position to buy on slight dips. – The G7 nations bill themselves as the world’s most powerful economies, but in the end the vast majority are turning out to be the biggest debtor nations – especially the USA. This growing debt is driving Gold fundamentally and technically it has broken out from a two year long resistance level.

Long Term Outlook = CAUTIOUSLY BULLISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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August 26, 2009

Market Updates- Lies of Mass Distruction

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

Teddy

Teddy Kennedy he Liberal Lion of the Senate died. You have no idea how much legislation he was responsible for in helping the poor, and those in need. In 1969 he was the first to introduce universal health care.  BBC editorial LINK

“Near universal is the view that he was Washington’s most influential lawmaker of the past 50 years, which is all the more remarkable given that he was such a polarizing politician.
Civil rights. Disability rights. The minimum wage. Immigration. Education. Campaign finance reform. And his signature issue, healthcare.”

Without Kennedy’s early support Obama would NOT be president. Will Obama support a health care plan that would make Teddy proud.

Lies of Mass Destruction

Why do we believe in the lies, even when we know the truth ? Remember the Saddam had  WMD’s and was behind 911 lie. 73% of Americans still believed the later in 2004. Who knows how many still believe it today.

In psychology its called cognitive dissonance – When you’re confronted with the truth that contradicts your previously held belief you fall back on the emotional attachment to that belief. You react defensively, ignore the truth, seek out only information that confirms your belief or discredit the source. MIT study LINK

The exact same thing is happening with all the  misinformation and screamed lies on the public health care.  Newsweek’s Sharon Begley explains why this occured with health care. LINK

Factcheck.org is always a great LINK


STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow +0.32% down
NASDQ +0.31% down
S&P500 +0.24% down
Russell2000 +0.51% -

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

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

Technicals and Fundamentals

This is a market that is overbought and ready to reverse itself. The Bernanke news & the second month in a row of increased housing prices in the USA should have produced a bigger rally. Even oil prices cooperated and dropped -3.12% without the dollar rising. All this good news produced a meager weak volume rally on Wall Street. How markets react to news out #2 forecasting tool (behind volume).

Financials are the key and it sure looks like and dip should be bought into.  The fact that housing prices have rallied two months in a row starts a trend. One month could be a fluke, but the second month gives you confirmation. Who is the biggest owner of homes outside of individuals? – Banks -  Yet another reason to invest in this sector.

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Significant forecasting tools/Indexes for stock markets

BDI The Baltic Dry Index measures the flow of goods by price (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern .  The BDI fell - 49 on yesterday. Unfortunately, we have created a lower low that confirms both the mid term trend . The mid term trend since early July is clearly bearish, with a series of lower lows and lower highs. @ 2298 is a major area of support and the BDI has fallen since early June from 4291 to 2468.  This is just 80 points away from a major support level.

In a nut shell the BDI is

  • short term - Bearish pattern
  • mid term Bearish pattern
  • long term - Bullish pattern

Bottom Line – Mid term trend is not good for world markets, especially countries that rely on exports.  This is why countries that rely on exports are NOT now doing as well as the USA.

While this index does not have as immediate impact on stocks, as the Dollar does, it is very significant to long term worldwide economics.

——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

The dollar was unchanged -0.01 % yesterday and,  what started out as a rally for stocks pulled back into modest gains . The Dollar is in a range between $79.5 and $77.5 . A breakout to either side will seriously impact stocks. Dollar closed at $78.24. Its  major support level is @$77.5

Mantra Dollar up = US stocks down & Dollar down = US stocks up

A gradual reduction in the price of the dollar is part of the solution to global worldwide recession

This is the index to watch because its impact is immediate.

Positions

The whole Positions Section has been revised (Click on “Positions” at top of blog). Check it out

Because of the breakdown of the BDI (world trade) & the bullish trend in financials (see last few posts) Investors411 is cutting investments in foreign countries and building investments in financials.  ETF’s in India,  & Singapore ETF’s have been sold. Taking profits in EWY (S. Korea)(see positions)

Have added a 5% position in XLF (financials) late last week.(see positions) Looking to “buy the dips” and build on this.

Your Comments

Paul R has a very important comment (see right hand side of blog.) There are 3 ETF’s that track financial stocks XLF, (tracks the financial sector) UYG (2X financials) & FAS (3X financials)

XLF is for the conservative investor. To trade UGY you’re taking a bigger risk and FAS is even a greater risk. Most people who trade these ETF’s are day traders or swing traders (day traders who are willing to hold a position for over a day) I do not often mention my personal trades in these because most of you are longer term investors.

First you have to have the time to do this. When I’m involved in trading UGY or FAS I have CNBC (the financial channel on as background while I work) You must have a clear defined entrance and exit strategy.

  • Here’s mine – I usually wait for FAS to fall @5+% on a technical pullback – there’s no earth shattering bad financial news. Sometimes I wait for a pause in the rally.
  • I look at the technicals – the support resistance levels.  Example – A support level breaks and there is panic selling – then you buy.
  • I make the trade and set a @5 to 7% stop/loss (If you don’t know what a stop/loss order is you should NOT be making this trade)
  • I set an amount that I will sell at in advance. Usually a 7 to 10% gain.

FAS chart LINK – As you can see a 5 to 10% gain/loss in FAS is common over a few days.

Long Term Outlook = CAUTIOUSLY BULLISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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August 21, 2009

Market Update – Rodney Dangerfield

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

Rodney Dangerfield

The late comedian’s famous line was "I don’t get no respect." He’d bemoan his obviously earned lack of respect.  The same holds true for Obama. Doggie’s Mom points out in the comments section that under Obama we have had a financial recovery. Yet Obama gets no respect.  It all comes down to Health Care and leadership.

Where’s the Obama who stood tall when he ran for president? Where’s the passion that made us believe? Where’s the vision? Where’s the guy who withstood all Hillary, McCain and the far right threw at him? Where’s the Obama charisma?

Obama gave a milk toast talk yesterday stating "We’re going to have Heath Care Reform." He wasn’t exactly cardboard, but he was certainly no George Bush putting his arm around a 911 firefighter telling us its all going to be OK.

There’s a time to be cool, analytical, smart and a consensus builder, and there’s a time to stand and fight.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow +0.76% down
NASDQ +1.01% flat
S&P500 +1,09% up
Russell2000 +1.25% -

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

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

Technicals and Fundamentals

Yet another  weak below average volume rally. Therefore no confirmation of the price move either way. The major indexes are all approaching yearly highs. Hard to see any significant breakout because the volume is soooooooo weak.

Sometimes, the unexpected happens – Just about any technical analysts sees the above weak volume rally and in no way expects a rally. So if a rally happens all these technicians (and there are lots at major institution) are forced to cover. Consequently markets move higher.

The one fundamental that is the driving force behind the stocks surging is financials – From AIG to Citi, to B of A to GS and many others.  They are borrowing $ for nothing and getting very credit worthy clients to make loans to. They do not have to use mark to market accounting – so the books don’t reflect potential losses. Government is doing nothing to regulate them and the health care debate consumes all the news.

One should hope for some sort of regulations to return on those who caused the worldwide economic meltdown – but the too big to fail shadow banks are raking in the profits. This is the gravy train of wealth creation right now .

——–

The big number to focus on will be the August unemployment number in early September.

S ignificant forecasting tools/Indexes for stock markets

BDI The Baltic Dry Index measures the flow of goods by price (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern .  The BDI fell - 70 t he n -9 0 & -80 yesterday. We’ve again broken a support level and formed another lower low. The mid term trend since early July is clearly bearish, with a series of lower lows and lower highs. @ 2298 is a major area of support and the BDI has fallen since early June from 4291 to 2534

In a nut shell the BDI is

  • short term - Bearish pattern
  • mid term Bearish pattern
  • long term - Bullish pattern

Bottom Line This is NOT looking good . While we are still a long way off from major support levels but the mid term (since June) bearish trend is growing. T he case for trade barriers between nations and a growing worldwide recession is getting stronger.

While this index does not have as immediate impact on stocks, as the Dollar does, it is very significant to long term worldwide economics.


——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

The dollar fell -0.17% yesterday and, you guessed it, stocks rallied. The Dollar is in a range between $79.5 and $77.5 . A breakout to either side will seriously impact stocks. Dollar closed at $78.35

Mantra Dollar up = US stocks down & Dollar down = US stocks up

A gradual reduction in the price of the dollar is part of the solution to global worldwide recession

This is the index to watch because its impact is immediate.

Positions

The whole Positions Section has been revised (Click on "Positions" at top of blog). Check it out

Still have not had a chance to revise Positions section of blog.  Buying on dips – Smaller positions in FXI (China) & EWZ (Brazil) have been added to. Also an SPX (S&P 500) position has begun to be built on dips . Will update over weekend.

  • Considering selling the smaller amount of China stock recently added at a loss and a small amount of longer term position on China.
  • Going back into US financials as a longer term play on dips – If Dems & Obama are going to do nothing to regulate these massive (too big to fail) institutions and continue to throw cash at them – T hey will continue to make $$$$$. FLX , UYG (2X) financials & FAS (3X financials) are the ETF’s to use depending on you level of risk.
  • This is shaping up to be at least a 5 to 10% correction . Perhaps we’ll have to wait till September when volume should pick up for a bigger correction.

Long Term Outlook = CAUTIOUSLY BULLISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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July 13, 2009

Market Update – Taking Action

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

Investors411 record – 4 1/2 years of beating benchmark S&P 500

Financing Health Care

Poll/chart from Fivethirtyeight

Last week VP Biden announced $155 billion savings in health care with hospitals to help defray the cost of Obama’s heath care plan. This was a giant first step in financing heath care reform. Story here . The $155 billion story was a blip compared to our Michael Jackson/Sarah Palin media obsession.

When has any administration since LBJ come up with $155 billion in health care savings?

Perhaps the best analyzer of polls out there, Nate Silver (fivethirtyeight blog) has come out with a poll showing the way 68% of Americans want to finance health care reform. - Increase taxes on income earners over $250K, Increase alcohol taxes, increase cigarette taxes. See data above and a great analysis of health care reform here

So why isn’t this legislation popular among our Senators and Congressmen? So many are bought and sold by the health care industry.

The latest to get caught in influence peddling was a media outlet the venerable Washington Post. CEO’s and health care officials were among those invited to a sit down with the WaPo and administration officials for $25,000 to $250,000. This meeting blew up when it became public. Story here

If you sit back and do nothing health care costs will continue to rise over 100% a decade.  We will continue be, by far, the most expensive system and 30th to 40th when compared to other nations health care systems on results.

You can either sick your head in the sand, keep getting mesmerized by Michael Jackson/Sarah Palin or do something. Call your Congress person and your Senator. Join a group that promotes reform. I certainly am a critic many of Obama’s decisions, but I’m have no problem in pushing this cause

You can make a difference. But you have to stand and fight . The only way they win is if you do nothin g . Make the call, join the group or donate some $. NOW

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow -0.45% down
NASDQ +0.20 % down
S&P500 -0.40% down
Russell2000 +0.36% -

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

Technicals and Fundamentals

Note - Repeated statements in brown.

After falling, as predicted, to the S&P 875 support level, the bulls have reinforced the barricades and held their position for the last two days.  The longer they hold out the stronger the bulls position becomes.

Volume our #1 forecasting tool has been almost totally useless.

Earnings week usually trumps everything else - Perhaps the biggest report is Intel on Tuesday. If the tech giant ‘s forecast is positive we could see a rally continue. Financials are probably going to continue their charmed existence, because the Obama administration has deemed the big ones too big to fail and they keep kicking the can down the road on any major fix of the problems that created the economic meltdown.

Significant forecasting tools/Indexes for stock markets

BDI The Baltic Dry Index measures the flow of goods (world trade) . BDI fell for the 8th day in a row.  However, the rate of decline has slowed dramatically.  This chart works a little different from most other charts in that it is a lot smoother and less volatile. The fact that the decline rate has dramatically narrowed is a positive for bulls

Unfortunately, over the last six weeks we have a series of lower high, lower lows, and a broken support level. That’s positive for bears. Over the last six months we have dramatically risen off the lows – Long term  Positive for bulls

In a nut shell the BDI is

  • short term  - seems to be turning bullish (emphasis on seems )
  • mid term – clear bearish pattern
  • long term - bullish pattern

$USD - The Dollar is still in its in its 5+ week long consolidation pattern between $79+ and 81+.

—–

Fearless Forecast for the Wee k

From Last week The S&P resistance level (@875 & SPX now at 896 )  should at least get challenged, especially in the beginning of the week. Watch BDI. Forecast – Bears Rule Investors411 shot and scored on last week’s forecast.

This Week’s fearless forecast Remember this is reading tea leaves. So far investors have not reacted well (buying or pushed stocks higher) to some reasonably good news last week. There is a bias with the bears The bulls support level (SPX @875) gets stronger each day it holds.

The bottom line comes down to the mother of all chip stocks Intel’s  earnings forecast . Financials are going to do well (under the Fed’s Obama administration’s protection) The BDI looks like it may be turning higher. Both bulls and bears have some powerful weapons right now as stated above.

So when it come down to "there is no clear direction " you manage risk. If support levels fall for the bulls there is a big chance for a big fall. Good news has not pushed markets higher in the last week, so it looks like there will be no huge rally.

Often the bottom line is "Don’t loose money." – So Investors411 is just going to hold tight. We’ve sold a lot of positions recently and will have to play this day by day. If Intel rallies Investors411 will add to portfolio. Also a buy the dip opportunity may arise.

Fearless Forecast – So expect a rise with some financial stocks reporting early in the week and that rally to get tempered later in the week


Long Term Outlook = CAUTIOUSLY BEARISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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April 17, 2009

Market Updates – Financial Chicken Soup

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

Elizabeth Warren?! -  Financial Chicken Soup for Jon Stewart and perhaps our best hope for the future. She oversees TALF – Tempest in a Tea Pot – Nobel prize winner Joe Stigletz with another warning – NASDQ takes the lead – Another Two Faced (see 4/12) Investors411

Elizabeth Warren – Photo from Harvard Law Bulletin

Elizabeth Warren

She’s the head of the oversight committee of the Toxic Asset Relief Program (TALF) Her interview with Jon Stewart is a must for the coming battle over what to do with shadow banks.  There is hope within the Obama administration and this lady is smack dab in the middle of that hope.  

Her money quote “Capitalism without bankruptcy is like Christianity without hell.”  

 Jon Stewart (the best interviewer out there who is unafraid to ask the tough question to power) calls her explanation – “the first time he’s felt better in six month to a year.”  Jon Stewart Video

Please pass this video on to your friends. Obama took 45 minutes on April 14th to explain the same thing in detail – she gives the same hope in 4.5 minutes

Tempest in a Teapot

The far right, on the 15th had an anti-tax tea bag demonstrations across the USA. These demonstrations were endlessly promoted 0n right wing radio & FOX  News.

 According to one well known far right organizer Grover Norquist they had only 268,000 demonstrators.  This pales in comparison to many single location demonstrations like the million man march on Washington.   Again a Jon Stewart Video

One point these  folks have is deficits are bad. But their only answer to everything is cut taxes. Obama was right to cut taxes in a recession on all but the wealthiest of Americans as part of a stimulus plan. The left wing Huffington Post cherry picked some of the worst of these demonstrations (scroll down for slide show)

Joe Stigletz

Nobel Prize winner Joe Stigletz again warns “The Obama administration’s bank- rescue efforts will probably fail because the programs have been designed to help Wall Street rather than create a viable financial system” See Bloomberg news article

 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

STOCKS


Index Percentage % Volume
Dow +1.19% down
NASDQ +2.68% up
S&P500 +1.55% flat
Russell2000 +2.76% -

 

Technicals & Fundamentals

Major US stock markets (and most foreign markets) rose yesterday in mixed volume. The NASDQ continues to lead the other markets (see Positions section of blog - QLD)

 The NASDQ (tech) Russell 2000 (small caps) for the 2nd or 3rd time lead other major indexes and even the XFL. This recent  rotation of leadership is bullish for stocks.

XLF - The ETF that tracks financials (mostly shadow banks) rose +2.13% in increased, below average volume.  Financials have lead this rally and if they  collapse so will almost all other sectors (see Positions section of blog XLF)

Short Term Outlook - Similar forecast to yesterday – First technical chink in the bulls armor appeared Tuesday.’s big volume sell off. A small gain yesterday in decreased volume is not bullish.  

Too early to make a call, but short term traders should pay attention. The Danger signs to watch for - another big price/volume decline  and/or stocks moving lower on no news or good news.

Still bullish in the short term. But think in the longer term, say Sept/Oct – a test of lows could happen. 

Long Term Outlook = CAUTIOUSLY BEARISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING! 

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April 15, 2009

Market Updates – Bailout $ to Pond Scum Banks

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

Why give bailout money to the  pond scum sucking shadow banks/institutions that caused the financial meltdown and not to me? – Obama’s outlines his economic plan – Imagine This – Liverpool and Antwerp train stations

 

Banknotes from all over world from British Museum

Imagine This

Your walking through a train station and suddenly the following happens Liverpool Train Station & Antwerp Tain Station. The Liverpool strain station has already had over 10 million views on You Tube, but the Antwerp one is a bit better. T-Mobile is the originator.

Obama’s Economic Outline

This guy is a gifted communicator. Where we’ve been economically and where we are going – yesterday’s major economic address. He went a long way in convincing me and you know I’ve been a fierce critic of his economic team. Speech and video here.

Why Pond Scum Bankers Get Bailed Out

This is just Economics 101. It is the most asked question/discussion I get personally and one that all American’s are asking. Why not just give me the money instead of the pond scum banks that created the whole financial mess?

  • Banks by law have to keep $1 in assets to every $8 to $10 they loan out. This sends 8 to 10  times more money flowing into the system than giving you a dollar. Banks, if they are run properly, are far more crucial than you because this 8/10 to 1 ratio of  capital going back into the economic system. This dramatically impacts you from mortgages to credit cards.
  • Without a viable banking system the economy collapses. The crooks at AIG were the end line in the daisy chain of over leveraged shadow banks.
  • You are getting a tax cut or all but the most wealth Americans are. However for you the money has a limited impact on the overall economy.  At best,  it has only a one to one ratio going into the economy because you might save it or use it to pay down debt.  

The problem is everyone got massively over leveraged. The shadow banks in collusion and/or stupidity with some conglomerates, insurance companies, politicians and rating agencies loaned out say $30 for every one dollar of  assets,  instead of the historical $8 to $10 ratio of assets to loans. Many consumers (YOU) and shadow banks added way too much debt to their bottom line.

 

 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

STOCKS


Index Percentage % Volume
Dow -1.71% up
NASDQ -1.67% up
S&P500 -2.01% up
Russell2000 -3.17% -

 

Technicals & Fundamentals

For the first time since the current rally began in early March volume has confirmed a major move lower. Volume, our #1 confirmation factor, rose and was well above average.  Usually two or three of these big volume & price drop days are enough to turn the market back to the bear camp.  So watch the volume.

XLF - The ETF that tracks financials (mostly shadow banks) fell -6.59%% in increased, well above average volume.  Financials (mostly shadow banks) have lead this rally and if they  collapse so will almost all other sectors. The 7% loss is less than 1/2 of the 16% gain on Monday and we’ve only had one day of heavy volume, but this could be the first sign of a correction.

Monday’s Technical Outlook - After a major rally what bulls want for a minimum is for volume to decrease and markets to hold onto over 50% of gains. Obviously preferable would be another rally day in big volume

Short Term Outlook – First technical chink in the bulls armor has appeared. Too early to make a call, but short term traders should pay attention. The Danger signs – another big price/volume decline probably led by financials and/or stocks moving lower on no news or good news.

 

Long Term Outlook = CAUTIOUSLY BEARISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING! 

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April 1, 2009

Market Updates – Executions for Sexuality

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

Tom Friedman, over the years has, perhaps, been the most quoted columnist in Investor’s411. No one is always right, but he sets himself apart by innovation. (also, 3 Pulitzer’s and many best selling books) Friedman’s column yesterday on socializing the risk and privatizing the gains for finance and the environment pulls two diverse problems together. Also today- other economic editorials & executions for sexuality.

Friedman

There a lot of meat in his NYT editorial “The Price is Not Right” chew on some of it.

After illuminating “creative destruction” he concludes  “Destructive creation” has wounded both the Market and Mother Nature. Smart regulation and carbon taxation can heal both.

Other Editorials

(If you have an editorial or comment you’d like to share post it on the comment section of the blog – Thanks)

Here’s  diverse group of editorials

Executions for Sexuality

Here’s a story American Corporate media will ignor

Ahmadinejad said there were no gays in Iran and his fellow Shia who now dominate Iraq are having a mass execution of 100 supposed “criminals” many of them for the “crime” of just being gay. This is the supposedly wonderful democratic government we created in Iraq that is killing “gays by the batch” (story) “20 criminals” in each batch.

 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

 

Stocks

 

Index Percentage % Volume
Dow +1.16% down
NASDQ +1.78% up
S&P500 +1.18% up
Russell2000 +1.63% -

-

Technicals & Fundamentals

Strong selling in the last hour of trading prevented a larger rally.  The volume was again below average for the third straight day.  This market is dominated by traders not investors.

You’d think at the end of the quarter, mutual funds and pension funds would add a few of the latest winners (March was a big up month for almost all stocks)so that they could show their investors that had these stocks.  It sure looks like these major institutions are NOT yet jumping back into stocks.

G 20 meeting, changing Mark to Market accounting (Thursday)  and the monthly unemployment numbers (Friday) are the major evens of the week. The last is although important is a lagging indicator. Earnings season begins next week.

Baltic Dry (Sea) Index - (see chart link on side of blog)  This rather obscure chart measures the flow of goods across the world. (see yesterday’s blog for more on BDI.)

Since 3/10 the BDI has fallen and yesterday was again  no exception. Another @1.9%  Total loss from high @-25%

Bottom Line here – If the flow of goods between countries continues to fall, so too will stock markets across the world. Unless we start to see some sort of rebound in the BDI a long term rally in stocks is dead.

Reading the Tea Leaves - (sticking with yesterday’s tea leaves since it seems to be coming true)  “In the shorter term - Thursday the gov’t committee (Its called something like FASB) meets to supposedly change Mark to Market accounting.  This should give financials a boost.  But longer term watch the BDI, if it keeps falling so will worldwide stocks.”

Note - FASB - the group that will change accounting standards is Federal Accounting Standards Board.

Again – A caution downside risk is growing.


Long Term Outlook CAUTIOUSLY BEARISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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March 17, 2009

Market Updates – Hedging

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

 Happy St Patrick’s Day - Hedging - Your job, your home and your investments are probably your top three economic assets. When it became evident that all three were deteriorating economically or faced some sort of threat the simple way to handle this problem was to hedge your assets. Plus – Obama/Summers disappoint on AIG. More on Mark to Market Accounting.

Cartoon from Slate.com

Obama/Summers 180 on AIG

A very disheartening article in NYT that explains Obama’s economic team knew about the AIG bonuses months before they were made public. Larry Summers on the Sunday talk show said “the government can not just abrogate the contracts”  OK, Obama is now outraged about this and promises action, but you want to handle something like this handled before it emerges.

Unions, pensioners, bond holders, executives, workers are all trying to work together to change their contracts to keep GM from going under. So why can’t the company AIG, that the government owns 80% of, do something about the bonuses?

Even more disheartening is most of these bonuses are going to the small  AIG division  that traded credit default swaps or the toxic assets and therefore created the financial mess.

Bottom Line - More and more it looks like Obama’s economic team (Rubin, Summers & Geithner) is going to favor Wall Street over Main Street.

__________

Hedging

Your job, your home and your investments are probably your top three economic assets. When it became evident that all three were deteriorating economically or faced some sort of threat the simple way to handle this problem was to hedge your assets.  

Home values were declining, a recession was expanding and stocks had started to drop from their late 2007 highs. Personally, my independent business started to pull back, my house declined in value, so I was left with what to do about my investments. Once you realized how over leveraged the banking system was the decision to go into cash became even clearer. – My other two major assets were deteriorating and stability was needed somewhere.

Hedging was an added reason that in the late summer of 2008 Investors411 moved to 90% cash as a major positions

____________

More Hedging

Currently, because of the severity of the recession, hedging also plays a major factor in any investment. When the few long positions Investors411 held (FXI EWZ GEX) moved too high a hedge was put in.  See Strategy section of blog. 

Bottom Line – Times have changed  - This is not the old stock market of 1980 to 2000 or your fathers market where everything automatically went up. From 2000 to 2008 the Dow went down almost 30%.

Bob Dylan – “The times they are a changing”

________

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

 

Stocks

-

Index Percentage % Volume
Dow -0.10% up
NASDQ -1.92% up
S&P500 -0.35% up
Russell2000 -1.71% -

-

Technicals & Fundamentals

XLF (ETF) the beaten up financial sector is leading this rally – up over 30% last week, but down 1.95% yesterday. Citigroup was up 100% in a week. Short term traders are loving this action.

Big volume on a flat day is something Wall Street technical analysts like to call “churning.” A major battle was held between the bulls and the bears. There were heavy casualties on both sides. Churning usually indicates a reversal of trend.  This is reinforced because in the short term we are overbought. Therefore, bulls have less troops to act as reinforcements. 

Critical to all this in that major major 741 support level on the S&P 500. (see chart at side of blog) SPX now at 754.

Fundamentally, the proposed changes for the Mark to Market accounting rules (see past updates) is very bullish for financial stocks. This is the #1 factor holding up stocks and the financial sector right now. We are giving what has been a corrupt financial system (companies like AIG, Citigroup B of A) an accounting system that is less transparent.

Obviously, Mark to Market is a  short term boon for the corrupt over leveraged banks and the stock market.  One wonders what the long term impact will be as these toxic assets slosh around the system and are hidden by accounting methods. 

Reading the Tea Leaves – Fundamentals are moving in a positive direction and technicals in a slightly negative direction. If we can hold out above 741 support then this rally (@10%) has a good shot at at least being at least as good as the 20% or 28% bear market rally we’ve had in the last 6 months. 

.

Long Term Outlook BEARS RULE

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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