Investors 411 Blog

by Barr Jozwicki
July 15, 2012

Recession/Deficit Solutions

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

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The Greatest Economists of the 20th Century

Agreed that you Stimulate Your way Out of a

Recession

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Solutions to The Deficit

Stimulus or Austerity

(Part 1)

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The  Outstanding Success of

The Obama Stimulus

.

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Why Stimulus Works

&

Austerity Doesn’t

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The Obama Stimulus cost $787 billion.

Our national debt is @ $15 trillion.

A 5.2% one time addition to our debt.

.

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Under Obama & his Stimulus

Job growth went from -800,000 to +300,000

GDP went from -8.9% to +3.9%. = +12.8%

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Millions of jobs

created millions of taxpayers

& the GDP expanded.

Taxes paid by those with jobs

REDUCE the deficit

year after year after year…

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Everything was working until

*The Stimulus ran out

*The Austerity/Banksta Republicans

won the House of Representatives

&

*Obama, himself, put more focus on

austerity instead of stimulus

.

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Republican blocked virtually every

stimulus/jobs growth plan.

&

Had to be dragged kicking and screaming

for even a payroll tax cut

.

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Let’s see what happens to

the deficit

when Banksta/austerity

gain even more control.

.

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Examples – Austerity as a Solution

The European countries in economic trouble.

Portugal, Ireland, Italy, Greece, & Spain

.’

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Ireland’s “free market” economy was

the goal of every Banksta in America.

The Baking Industry had “captured government”

Regulators were no where to be found.

Then Something Hit the Fan

.

.

Ireland was the first country to impose

The Austerity Solution

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The Deficit

Exploded Higher

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Ireland Government Debt To GDP

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Ireland’s unemployment rate exploded

from 4.6% in 2008 to 14.3% today

..

IRELAND with Austerity

A 311% INCREASE in Unemployment

A 433% INCREASE in Debt to GDP

.

In Hard Economic Times

Austerity = More Debt

..

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More Examples

The Other 4 Troubled European Countries

who have adopted the austerity solution.

All have

Debt to GDP ratios that are still exploding higher

All  have unemployment still exploding higher

For data on these countries see this LINK

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Next Blog – Common Sense works, Regulated Banking works, When Austerity works, Those plutocrats that don’t give a damn, but say they do – More Solutions.

FINIS


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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.

.

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

.

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

.

  • 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

.

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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April 27, 2012

The Primal Scream

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

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History will Repeat Itself

Unless we learn from it

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Austerity in a weak Economy

is Devastating-

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Japan

.

.

Almost two decades ago Japan’s rising economy was the envy of the world

Then, they went into recession and introduced austerity measures.

The end result was a stagnant Japanese economy with a Debt to GDP ratio of well over 200%

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Yale’ Economist

Robert Schiller

(pg. 84 Money magazine)

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“Fiscal austerity to reduce debt can backfire -as has been the case in debt laden Japan.”

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Aside – How does Japan manage an ugly Debt to GDP ratio well over twice ours? Low Low Low Treasury bond rates.  We do the same with our Low Rates. Their rate for the 10 year bond is under 1%, ours under 2%

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__________

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England Hits Recession

Another Austerity Mistake

.

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Headline Daily Mail

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“The first double dip for 37 years…

Britain endures

longest downturn for a century”

..

Now besides Europe waking up to the fact,  austerity doesn’t work we have England as the latest example.

Even countries like Spain and Ireland who had budget surpluses before the 2008 meltdown are now in deep trouble after introducing austerity measures. (See STOCK Section below on downgrade of Spanish bonds)

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____________

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The Primal Scream


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Investors411 is just one small blog

that’s been right about

this again and again and again

..

“Of course we must eventually deal with the deficit.  But the example of Britain and Europe show that austerity in the midst of a jobs crisis is a form of insanity.

.

It ultimately makes deficits worse and leads to economic stagnation and double dip recessions.”

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Quote from Must Read

Editorial

by John Atcheson

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“Splitting the Difference Between Myth

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and Reality Is Not Good Economics

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Told You So -

The UK’s Double Dip Recession and Ours”


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STOCKS

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  • Spanish Bonds rose SIGNIFICANTLY this AM near 6.00% danger zone. Rate at at 5.96% at 6:45 AM EDT Latest update on Spanish bond rates for traders HERE
  • Despite austerity Program in Spain Spanish Bonds were downgraded two levels Story Here
  • Two trends – Bad news – US economy keeps deteriorating at a slight rate. Good News - Earnings report are outstanding for US companies.

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Reading Tea Leaves

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Simply Put – The massive gains in stocks over the last three years is NOT trickling down into the US economy in a Significant way. The rich are getting richer as working middle class Americans stagnate.

Any stock move significantly higher is predicated on the Fed continuing some kind of liquidity dump. The latest liquidity injection “Operation Twist” ends in June.

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Your Stock List

.

.

Today’s the last day to submit your favorite stocks

to be on YOUR stock List starting May 1st.

.

List your choices in the comments section

or email them to me.

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Spanish Bond over 6% = Change to NEUTRAL

These bonds are now back below 6% = CAUTIOUSLY BULLISH

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Longer Term Outlook

3 months+

.

Getting Shaky again

CAUTIOUSLY BULLISH

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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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April 25, 2012

Austerity or Growth

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

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It’s Official

Keynes & Krugman

are Right

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Prize Award Ceremony

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At least for the Dutch

French and most of Europe

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Keynes and Krugman are two Nobel Prize winning Economists who believe you stimulate your way out of a recession. Austerity plunges you deeper into the recession.


After several years of austerity right wingers in France and Holland (yesterday’s elections), plus many more got the message.

From Yahoo Finance

the money quote

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“The “austerity” idea, you’ll remember, was that the continent’s huge debt and deficit problem had ushered in a “crisis of confidence” and that, once business-people saw that governments were serious about debt reduction, they’d get confident and start spending again.”

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“That hasn’t worked.”

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____________

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The Obama

Economic Triumph

.


Facing Financial Armageddon,

a -8.9% GDP rate & the losses of Almost -800,000 a month

Obama took offic in Jan 2008.

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By the end of 2010 GDP had soared to between +2% and+3%

and job growth had turned positive up to +250k a month


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Quarter-to-Quarter Growth in Real GDP

In 2010 the uncompromising

Tea Party Republicans took over,

the Obama Stimulus Ran out, and

therefore, growth came to a halt.

.

  • Moving from a -9% GDP to a +2/3% GDP is real Change You can Believe in
  • Moving From a -800,00 jobs a month to +200,000 jobs is real Change you can Believe in.

.

Please show me another President

who has taken GDP from -9% to +2/3%

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The problem

.

We have a big deficit, Europe already shown austerity leads to another recession, Japan got clobbered, China’s GDP is shrinking and Apple’s huge earnings success yesterday just leads to more Chinese jobs.

European voters have realized that just austerity doesn’t work.

.

So should you.

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STOCKS

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  • APPL had one of those OMG earnings report.  Sales were so so in the USA, but in China they were spectacular.
  • Spanish Bonds have fallen for the last two days and are SIGNIFICANTLY  below the 6.00% danger zone at 5.79%. Latest update for traders HERE
  • NB -Apple’s earnings are a reflection of their business doing spectacular in China and not in the USA – Reuters story

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Reading Tea Leaves

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Kudos to Monitor (long term Apple holder) who a full day before the earnings report suggested AAPL return to YOUR Stock List.  Apple should lead tech and the S&P, but obviously don’t expect results like last quarter. There will be a group of investors/traders who will again buy the first dip.

Longer term – The Cavalry sure looks like its come to the rescue in Spain. Friends of the FED and ECB are keeping Spanish bonds below the danger Zone.


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PAUL’S Corner

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Your Stock List

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April is almost over

Now is your chance to get your favorite stock

added to Your Stock List!

.

Effective April 30 all current YSL members are being removed.

On May 1 we will announce  the new list

.

List YOUR top stocks in the comments section or email them to Barr ASAP.

The only requirement is that a stock trades at least $5,000,000 dollars a day. Example –  Stock XYZ is worth $10 and trades 500,000 shares a day. This way we eliminate stocks that are not liquid and subject to more manipulation.

If you like defend your stock in a sentence or two.

From YOUR selections Barr & I will try to to come up with a list of 10 to 15 stocks that again will beat the S&P 500. These stocks will be tracked throughout the month. Entry and exit points will be suggested.

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As most of you know

This process has worked!

ONLY because of

YOUR  participation.


Of the 8 stock Lists only one

has failed to beat the S&P 500

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Group performance results for the month of April will be listed Tuesday morning.


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Spanish Bond over 6% = Change to NEUTRAL

These bonds are now back below 6% = CAUTIOUSLY BULLISH


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Longer Term Outlook

3 months+

.

CAUTIOUSLY BULLISH

.

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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January 23, 2012

One Big Party

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

Special Note

Investors411 2012 Yearly Investment Outlook

is in the Stock Section Below


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One Big Party

The news of the morning - The first Florida prediction poll is out since South Carolina and its Newt +9%. Its only one poll, but there is a change in momentum. Its way to early to call this race.

Some interesting political analysis  ”Mitt Romney’s Misery in a Word Bain “(Politico)

Clearly Republican voters in South Carolina felt Gingrich won the debates, but there was another even more significant factor.


Super Pac Money


“There are probably less than 100 [obscenely wealthy] people fueling 90% of these Pacs”

LINK

In Iowa it was Romney’s Super Pac that spent millions on negative adds against Gingrich. He was caught flat footed. He obtained one agreeable billionaire and created his own giant super Pac They smashed Romney with negative adds in South Carolina and spent just as much money as he did.

Florida Super Pacs are already in full swing with the vast amount of money not spent on building a case for constructive ideas on how to help fix out economy, but scathing negative character assassination.

Everybody says they hate these adds, but the reality is they work. Romney beats Gingrich in Iowa by going negative with his super PAC and Gingrich beats Romney in Florida by going negative with his.

___________


In the last election we saw a massive amount of money go to Obama from Wall Street. Almost every progressive will tell you Obama has not delivered becuse he is influenced or ownd by big money.

Sure there is a difference between Republican views and Democrats (watch the debates) But in the end to compete with the winner of the Republican Primary Obama is going  to need his own Super Pac’s to go negative.

End result

A group of wealthy oligarchs determine the outcome of what used to be called


Democracy


We are slowly morphing into one big party

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STOCKS

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Wall Street Bull and OWS Symbol

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Short Term Outlook

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  • Earnings reports continue to be the #1 focus. Semi & Housing Stocks are leading the bulls.  Obama’s State of the Union will be of note. Global healing editorial.
  • Repeat from Friday – “We have confirmed a higher high on the benchmark index — the S&P 500 (link to chart of S&P near top right of blog). This is a higher high on the charts and longer term its bullish.”
  • Our #1 technical forecasting tool, the McCellan Oscillator (MO) fell slightly to +52.63. 50DMA at +2.72 (for more see  STRATEGY link at top of blog) Just below overbought territory = NEUTRAL/BEARISH

  • From Friday – “We are in a low volume rally. This means the manipulators (central banks, HFT’s and other giant sharks) are in control.” Sorry I haven’t got the details on how this is happening, only a recognition of its existence (see yield rates falling below) Low volume rallies can last a long time as we saw when the Fed introduced quantitative easing (QE #! & QE #2)
  • DAX down this AM 0.57% at 6:00 AM EST. Italian bond’s two week long yield fall puts it well out of the 7% danger zone at 6.13%. The Spanish and Italian bond reversal shows some economic stability returning to two of Europe’s largest economies and is bullish

Overnight Data From Europe

Germany’s DAX

Italian 10 year bond

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2012 Stock Forecast

The Raw Data

..

Those of you who are long term investors in the markets and have been with Investors411 for years know that (except for unforeseen events) the yearly forecast has been very accurate. For an overview of why go to the OVERVIEW section of the blog (see top bar of blog)

Most of the Raw Data will be presented this week and a conclusion over the weekend or next week.


NB – Three parts will be presented

The Good, The Bad and the Ugly

.


Chart by Cam Hui from his editorial Global Healing

The Good


In 2009 Obama took over Presidency of the USA. Financial Armageddon was predicted and we entered the greatest worldwide recession since the Great Depression.

The following is a list of the changes and the trend flow since then.

  • The stock market has doubled (Thanks to Paul R for heads up on this)
  • USA GDP unexpectedly fell to over -9% in the quarter before Obama took office and now its at @+2%
  • Monthly Jobless claims were at - 750,000 per month in early 2009. Today +200,000 per month (seasonally adjusted I’d say +150,000 is more accurate)
  • A record setting -599,000 have been eliminated from government. If these jobs were still in existence the monthly jobs growth figure would be higher.
  • US corporations are sitting on more cash than ever before ($1.9 trillion) Most company profits are again beating expectations.
  • Relative to the rest of the world – Japan (tsunami) India & China (GDP in decline) Europe (crisis) – the USA is outperforming (Thanks to EW for his heads up on this)
  • While it may be just a little too soon to call the trend, there has been a three month surge in housing stocks The fall in housing prices was a dominant factor in the great recession.

The USA under Obama and his Fed Chair Bernanke is in a slow steady recovery with little sign of inflation on the horizon.

Later this week the Bad and the Ugly




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Paul’s Corner


,

Box 7 Stocks

There are many ways I search and select stocks. As I have shown several times I use a “High Demand” search available in HGSI. I posted a review of the latest High Demand search in the comments section this past Saturday.

Link:

Another favorite of mine is to use HGSI and search for what we call “Box 7” stocks. A recent Your Stock List 2012 winner FTK was found using the Box 7 search.

Many years ago my good friend Ian Woodward (HGSI) found that if one would qualify a stock by its past 5 years earnings history and its current growth you could get an idea how fast the stock would grow and as a result your wallet would grow.

Ian devised what he calls the “Nine Box Matrix – the Rule of 72” where you can place a stock, depending on its earnings history and growth, and evaluate its expected growth. He was kind enough to prepare a Power Point presentation for Investors 411 readers explaining the Nine Box Matrix. Ian’s Power Point gives you the history of development and examples of some winning stocks.

Link:

Looking at Ian’s Nine Box Matrix we find in Box 7, stocks with a past earnings history of 15 – 25% and a current growth rate of >100% for the last 2 quarters. Many call these stocks “Turn Around Stocks,” stocks that have stubbed their toes and are recovering, or stocks that are new and are accelerating. Box 7 stocks can provide some real rocket ships; FTK for example.

Page 10 of Ian’s Power Point shows Box 7 stocks selected back on Dec 10 and their current standing last week on Jan 17. Look at #2 FTK with a 34% gain!  Keep in mind not all Box 7 stocks give this sort of return, but with some careful selection and a market with the wind at your back they can be fun!

This Wednesday in Paul’s Corner, I’ll post a list of current Box 7 stocks for your review.

HGSI has a 45 day free trial:

My usual worthless disclaimer applies!


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Longer Term Outlook

3 months+

.

Still

CAUTIOUSLY BULLISH

.

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 28, 2011

Boycott BOA

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

Fighting Crony Capitalism


Take the crony out of CapitalismNYT’s Nicholas Kristof’s excellent defense of Occupy Wall Street


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Boycott BOA

10 Reasons NOT to Bank with the mother of all Bankstas

Bank of America.

From Nomi Prins at Truthout. Of all the ways  (hidden fees, lawsuits, nailing vets, over charges, pay’s no taxes) BOA charges vs other local banks I find reason # 6 the most compelling. They use your deposit to gamble hidden over leveraged derivatives.

“The total amount of derivatives in the FDIC-insured portion of B of A as of mid-year was $53.7 trillion, up 10 percent from $48.9 trillion the prior year, and up nearly 35 percent from its pre-fall [2008] crisis level of $40 trillion.”

Your over leveraged FDIC insured deposits at BOA  multiplied the severity of the 2008 housing/financial crisis. Who knows how deep BOA and other banksters (shadow banks) were into the European sovereign debt crisis? – Our Fed is not audited, US banks don’t have mark to market accounting, and the whole 500 trillion derivitives market hides its trades.


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Bankstas Take A Hit In Europe


Yes, over leveraged European financials did get a $1.4 trillion bailout fund. But they were also forced to take a “50% haircut”on the Greek bonds the held. How much of this haircut that will come out of their bottom line is open for debate. (See links in yesterday’s blog)

Bankers and Bankstas - There are normal Bankers who take our deposits and use them as collateral for loans that help people and small businesses. The good guys.

Bankstas take our FDIC insured deposits and use them  as protection to play casino capitalism, on bundles of mortgages, sovereign debt, student loans etc., called derivatives  or Credit Default Swaps.

This over leveraging is done in hidden transaction in an opaque $500 trillion derivatives market. The biggest poorly regulated bankstas are now too big to fail – Example BOA.


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STOCKS

From Yesterday - Today’s move higher should be Dramatic Not Erratic. US stock indexes saw a significant move higher (3.18% to 5.26%) in big volume , but European stocks saw an even bigger move. ETF’s that track France and Germany up 8+% (see positions below)

A better than expected 2.5% US GDP for the last 1/4 is another solid fundamental for bulls.
A contrarian view to Investors411 – Time to Fade the Rally

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Reading Tea Leaves


  • Our secondary indicator, the Put Call Ratio is at 0.91. Well below its 50DMA which is at 1.15 = Bullish
  • For more on MO & PCR see POSITION Section of blog (scroll down)

Stock traders/investors put their money down yesterday -  The proposed solution in Europe looks like it will have a somewhat similar impact on stocks that the  of 2009/2010 Obama/Bernanke bailouts did. In fact, traders/investors have been putting their money down since the lows almost a month ago.

It is rational to expect some kind of pull back today. But, there are lots on the sidelines who have missed out on the move looking to buy the dip. Volume was big yesterday, but not yet the huge kind of volume associated with a climax selloff.

Unfortunately, the bigger part of this move off the bottom is probably over, but it looks like we may be able to reach this year’s highs again.


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Positions


SPY(ETF tracks S&P 500 or SPX) bought at 123.5, now at 128.63

Reminder – Your Stock List#5 – . 5 of our 14 stocks took  some big earnings hits (one on an analysts downgrade) So Paul & I have decided to drop TSU, RES, CROX, GMCR, & CPHD. . LINK to entire list (scroll down)

Under consideration.

SSO (ETF that is @2X SPX) Buy on dip. Investors411 uses a buy the dip strategy in markets that are trending higher.

EWG (ETF that tracks Germany) and/or EWQ (ETF that tracks France) Both are higher risk because they are on the cutting edge of what’s happening. A bigger technical breakout than US indexes. Yesterdays melt up was fundamentally focused on the fact that specifically German and French financial institution would weather the default crisis.

I favor Germany – better overall economic fundamentals. Buy the dip.

XLF (ETF for financial stocks) For those that can handle more risk UYG (2X financials) & FAS (3x financials) Several Investors411 bloggers have made out handsomely with gains of 50+% trading January Calls on FAS.

Mea CulpaAll of the above new considerations should have been listed Monday after the Upgrade.

Note – These are official Investors411 Positions – I buy each position mentioned.


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Long Term Outlook

3 to 6+ months

Investors411 upgraded its Outlook on Monday to CAUTIOUSLY BULLISH. Reasoning

  • Technically, we broke out of this summers trading pattern. The resistance and now support level for benchmark S&P 500 is @ 1225.
  • Fundamentally, the perception that European banks will survive (see Banksta at War) another over leveraged crisis
  • A 2.5% GDP Growth in the third quarter is NOT a recession number.

CAUTIOUSLY BULLISH


Investors411 has 5 different valuations - BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, and BEARISH.

* Everything written in BROWN is a repeat from a previous day(s)

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMER ERRORS.

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May 19, 2011

“Donald Ducks” (2)

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

Happy Talk

The happy talk by governments and  media outlets around the world have masked the severity of the 2008 economic meltdown. Today, that same happy talk hit reality in Japan.

TEPCO and the Japanese government has continued to underestimate the problems in Japan.

  • The lead story in yesterday’s NYT examined “Vents that American officials said would prevent devastating explosions at nuclear plants in the United States were put to the test in Japan and failed.” (Thanks to frequent blogger Popeye for heads up on this.)
  • Today we learn that Japan’s GDP for the last quarter was almost twice as bad as was predicted. Last quarter’s GDP was -3.7% making Japan officially in a double dip recession.(Two negative quarters of GDP)

The sky is not falling. However, its time for some  realism when comes to economics and nuclear power.

  • The USA is the ONLY country that is NOT stopping to evaluate  its nuclear program in light of the Japanese disaster. Shouldn’t we pause to evaluate nuclear power?
  • Japan was the #2 economic power in the world till this year and its GDP had turned negative before the nuke disaster. Our economy and the worlds is in a fragile recovery. Shouldn’t the immediate focus of our politicians be insuring that we recover?

Without recovery there will be no funds to impact problems of the future. Japan seems to be taking the right role and focusing on recovery. Our politicians in the USA should do the same.

The Donald Ducks”

Headline from Politico

Three of the leading Republican candidates (Gallop Poll) effectively ended their quest for the presidency this week.

Mike HuckabeeAnnounced he would not run – Not to worry he will keep his FOX News show. Directly after his announcement in what only can be considered as bizarre Fox news ran a long infomercial as Donald Trump monologued his assessment of Hukabee, Obama and politics.

Newt Gingrich- Announced that Ryan’s plan to privatize and eliminate Medicare was “too radical.” This brought down the wrath of Republicans and then led Newt to say opps it was the media’s fault. Ryan’s plan will cost more and cover less (Goggle the words – CBO, Ryan & medicare) for American according to the non partisan Congressional Budget Office.

The Donnald - Announced he would no run – Not to worry he will keep his TV show. Trumps tough talk (fear mongering, finger pointing, & bigotry) and constant references to his TV show had catapulted him to the #2 position behind Huckabee (Gallop Poll) in the race for president. Wake up and smell the coffee, this run was all about Trump’s ego and his show. Everyone from the media on down who took his candidacy seriously was played for a sucker. (see Popeye’s remarks in comments section of blog)

The new Gallop poll has two new front runners for the presidency.

Mitt RomneyA candidate in 2008 whose cardboard presentation and flip flops on positions made John McCain look like John Wayne on Steroids. If Newt stays, undoubtedly, folks will evaluate which of the two has changed more positions. Romney wins the cardboard contest hands down.

Sarah PalinMama Grizzly can always say grrrr.

Maybe a better candidate will emerge from the pack. Stay tuned.

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KISS & Stocks

(Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

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Index Percentage Volume
Dow +0.65% Down
NASDQ +1.14% Down
S&P 500 +0.68% Down
Russell 2000 +1.60% -

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Technicals, Fundamentals & Analysis

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

  • Stocks returned to the most familiar pattern since Fed managed/manipulated liquidity was reintroduced last November – An ultra light volume rally
  • UUP is the tracking ETF for the dollar is still the most relevant forecasting tool for US equities. Dollar. up = stocks down. Dollar down = stocks up
  • The dollar has flattened over last three days and a moderately oversold rallied.
  • Dell had a solid earnings report and investors  ignored the earlier poor reports from Cisco and HP. Commodities also rebounded, but the technicals (Dollar and MO above and charts/explanation below) were the driving Factors.
  • Our Fed managed/manipulated growing money supply had no place to park its money – Treasury bonds are falling, 0% interest rates in stocks, and a whole bunch of added dollars have recently come out of commodities & stocks. Therefore, Path of least resistance was for oversold stocks to move higher.
  • Short term momentum with bulls

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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] Dollar was flat +0.03% yesterday.  After a big run  higher for 8 trading days the dollar has flattened or retreated for the last 3 days. Three flat days is neutral. but momentum is still with dollar bulls. If the dollar continues to move sideways the outlook will change to Neutral. For stocks shorter term trend = Bearish/Neutral
  • McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .MO fell to -40 two days ago and rose to -9.04 yesterday. Accurate prediction from Tuesday MO isOn its way to oversold (@-60) Another bad day or two and we should be ready for at least an oversold bounce. We got that bounce yesterday and, depending on the dollar  could hold onto those gains today. However MO is now near Zero and therefore = Neutral

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Paul’s Corner

What an interesting week so far, at the start of the day I don’t know whether I should open a new bottle of Tums or put on the party hat.  Wednesday was a good day and most of Your Stock List looks ok with many stocks in a good buy the dip position.

So how do we “buy the dip” without “losing the house’?

Buying when a stock drops and touches the 17 or 50 DMA or if below when it crosses up through the average is usually a good method. In many instances a stock isn’t at a moving average or is even slightly below the average so we need to place a buy order above the previous days high to get a safe trade.

LYB took a serious hit this week along with the sell off of the commodities and now is in a buy the dip position. I have prepared a PDF  file  explaining  how to safely trade LYB in a  “buy the dip” position .

LINK

Take a look at the stocks in Your Stock List [click on word POSITIONS at top of blog and scroll down for list] and you’ll see most are in the “Buy The Dip” position.  SPRD and JNPR would not have been bought yesterday may 18  using this method since they didn’t raise above their close on May 17.

Remember, you are responsible for your investment decisions, and I am not.  Please do your diligence, and please take ownership for your actions.

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Check out the advice, recommendations, analysis by bloggers on stocks,politics and trends in the comments section of the blog  Many of the best concepts regarding YOUR Financial Future are discussed their. Watch for Paul’s Corner every Tuesday and Thursday

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Longer Term Outlook

CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

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April 15, 2011

Relax

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

RelaxInvestors411 is taking a break

Will be back on 4/25 Some links and comments below

  • No change in general market outlookStill bubblicious and CAUTIOUSLY BULLISH If we close below last weeks low outlook changes to NEUTRAL
  • Short term bearish tend, still in place as of closing on Friday even though we’ve had three days of slight gains.
  • For the top 3 investments for the 2nd quarter LINK HERE (scroll down)
  • For YOUR Stock List - LINK HERE (scroll down)
  • For information on all suggested portfolios LINK HERE (scroll down)
  • For why we are Investors in Wonderland LINK HERE (scroll down)
  • For a message to my fellow cows LINK HERE (scroll down)
  • Our proven indicator of an oversold or overbought market has been the McClellan Oscillator (+/- 60 a rough guide)

Be sure to check out the comments section for Paul’s enlightened comments on the markets.

Reading The Tea Leaves

June 30th is the date that the Fed’s quantitative easing is “supposed” to end. The zero% interest rates and QE has forced anyone seeking higher returns into stocks or junk bonds.

Markets will have a growing supply of $ till then and even if it does completely shut down that supply of money will still be in the economy. So as both the stimulus (Obama compromise) winds down and “supposedly” QE 2 ends we loose the money supply that has driven stocks higher.

Two major questions arise.

  • Will frightened investors front run June 30th and yank their money out? - This would be shown by a big  INCREASE in volume on down days for the stock market – This has not happened yet.
  • Once QE 2 ends, who will buy our treasury bonds? We’ve already seen Pimco (largest private US bond company) get out of treasuries. I agree with the group that thinks that if a storm comes after June 30th the Fed will be forced into some other kind QE.

On another matter

Friday night Goldman Sach’s Jan Hatzius again dropped GDP outlook for USA from 3.5% at start of year to 2.5% a few weeks ago and 1.75% Friday night. Aside – yes GS is a Vampire Squid (link is yet another example) but most of the time someone from GS or their protegee has run treasury and many key financial  post in the White House for over a decade. They have the inside info. While this downgrade hurts the USA economically, emerging market growth is far more critical to globalized US stocks.


AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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November 3, 2010

Elections & Economics & You

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

Newspaper Front Pages Election

Photo from Huffington Post

Elections, Economics & YOUR Stocks

Elections

What polls predicted happened, with a few surprises. Harry Reid won.  Dems did better than expected in Senate and Reps. did better than expected in House.

Personally, great sadness over heroic Russ Feingold’s loss – He was the NOT in any way owned by the PUKE Green Party. (see yesterday’s Investors411.) The PUKE Green/Shadow Institutions won hands down. I’d trade Feingold for Reid or just about every other senator out there.

  • Gridlock – The House will come up with proposals for cutting. Each cut has a specific constituency. That’s a negative for a congress person that has to be specific about cuts. The Tea Party now has to get specific.
  • Obama does have a bipartisan commission on cuts and taxes that’s going public in Jan (I think). This could make a difference and something Obama would/might follow.

Economics

The US economy is in shambles – if you consider negative GDP growth shambles and it doesn’t look like a recovery any time soon. Economists are going to be all over the map on this so I’m using a relative moderate Mark Zandi from Moodey’s Analytic (see yesterday’s Investors411, Zandi – $500 billion in QE = 250,000 jobs and o.3% of GDP).

The +2%GDP growth last quarter has to factor in a lot of stimulus that the far right hates.

  • If you add the $1.7 trillion from QE 1 it equals about +1% of GDP (using Zandi’s math – see above)
  • The non partisan CBO says the Obama stimulus added about +1.7 to +4.5 real GDP growth in the second quarter. Let’s divide the total in 1/2 = 3.1% GDP growth was due to Obama stimulus.
  • 1% from QE1 + 3.1 from Obama Stimulus = +4.1% of USA GDP was enhanced by Obama & the Fed. That’s also a whole lot of jobs.
  • I’m not gong to add another factor – The UNaudited Fed makes other 0% loans to who knows how many shadow banks. But this also juices GDP.
  • Therefore, real GDP 2% total – 4.1% enhanced from Fed & Obama= -2.1% GDP for the USA last quarter without the FED & Obama (Remember, I’m playing with ballpark numbers, but if you add in the unaudited Fed loans I’ll bet our situation is  far worse.)

The Vampire Squids at Goldman Sachs think we need $4 trillion more in quantitative easing. That’s how bad GS thinks the economy is.

Elections plus Economics.

Rodney Dangerfield/BarakObama gets no respect for keeping us afloat but its the future thats more important. Here’s the problem. Without stimulus we have at least a -2% probably -3% GDP growth. This kind of negative growth would hemorrhage jobs.

The Republicans who are taking over, especially the more radical Tea Party radicals hate every form of stimulus from QE 1 to the Obama Stimulus. They are going to scream bloody murder and want to cut.

  • The Obama stimulus is almost all over so all we have now to foster growth is QE 2.
  • QE2 may start out small,but it is going to have to be massive to fix the US economically.
  • Obama & congress did pass a small business jobs bill a month ago that will help.

Stocks

Unstimulated GDP growth is negative, Obama stimulus about over, The US consumer is saving more, the foreclosure mess is far from over and globalization is sending jobs overseas (Big thanks to Robert H who discovered INTC has just opened a billion dollar factory in Vietnam – see comments section of blog)

For the economy - We’re in a hole that should get deeper and deeper. Now only quantitative easing (QE2) is there to help.

Prediction – GDP growth depends on how large QE 2 turns out to be. Think +0.6% GDP  for every trillion of QE.  Getting to a 4/5% GDP growth to bring down unemploynent seem mighty hard.

For stocks - We’re going to need a lot of quantitative easing to keep the USA’s economic  head above water. That means a lower dollar and stocks moving higher despite a rotten economic picture nationally = bullish for stocks



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 +0.58% flat
NASDQ +1.14% down
S&P +0.78% up
Russell 2000 +2.05% -

Technicals, Fundamentals & Analysis

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

US Stock Markets -

Dollar took a significant hit, so stocks rallied yesterday. The dollar is dangerously close to its support level. If that falls, and the chances of that happening are growing, the stock rally should have legs.

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar fell a significant -0.74% yesterday. Dollar currently moving within a range (see below). Now close to breaking down through support levels of consolidation range. Another fall like yesterday’s and support breaks. Trend for stocks = Neutral/Bullish
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries]Fell a -1.81% yesterday. BDI now consolidating after bull run that began in June. The BDI has been overshadowed by the dollar moves. @another 4% drop to support level and change to bearish. Longer term Pattern now= Neutral
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Basically flat closed at +6.37% yesterday. Six week trend (see chart) is starting looking bearish but location still = NEUTRAL

Reading Tea Leaves.

Again Mantra for last two weeks -Any move in UUP (tracking ETF for dollar) above 22.7 resistance is trouble for stocks. Any move below 22.18 support level is good for stocks. A breakout of either the support or resistance level will tell you who wins the dollar war.” UUP closed at 22.25 and fell -0.17% Another fall like this a strong support level for the dollar breaks.

Bottom Line = From yesterday -”gives bulls slight advantage”  That advantage for dollar bears and therefore stock bulls became a whole lot stronger with falling dollar nearing support. Looks like the betting before of Fed’s QE2 announcement today is for a falling dollar.

All eyes on Fed and how big QE2 is going to be. What the Fed says and does about QE 2 Today will probably set the course for stocks and settle the dollar war.

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).

Again the Mantra for the last week - “Not making any specific move until dollar breaks out of its range. I would look at a breakout higher for the dollar, and a corresponding fall in stocks and the MO to oversold as a buying opportunity for long term investors. “Looks like next Wednesday Fed meeting is the big event.”

I’m back to buy the dip even though the MO is near zero –

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.”

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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October 30, 2009

Market Updates – Jobs & GDP

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

GDP = + 3.5%

Obama

This better than expected number is obviously a positive . Its due to the Obama & Bernanke stimulus – Cash for clunkers, tax cuts, first time home buyers credit, low interest rates etc.

It’s the first positive growth in over a year . Since only 40% of the Obama stimulus has been allocated and interest rates should remain low -  the next few quarters should also be positive.

The question becomes when you take the stimulus away what will happen?

Globally the canary in the coal mine is Israel, Norway and Australia. We are a globalized world and these 3 countries have already started to raise interest rates. If their economies continue to grow with raised rates others will follow.

The US does have a specific unemployment problem that will anchor it down longer than other countries. (see below). However, we’re getting some real growth abroad, especially emerging markets. Hopefully, this growth will be strong enough to drag the US along with it.

Jobs, Jobs, Jobs

So far the recovery act has saved or created enough jobs to “shave @2% ” off the unemployment figures. You can get a breakdown state by state at Recovery.com LINK

You can debate their figures, but a jobs recovery is going to be harder than most predict because

  • The financial shadow bank crisis created a much bigger hole than most people realize
  • Globalization will send most new jobs abroad.
  • Education of American workers/students has not kept pace with technology.
  • Our huge deficit will limit stimulus needed to create jobs.
  • Our manufacturing base has been seriously diminished.


STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow +2.05% down
NASDQ +1.84% down
S&P500 +2.25% down
Russell2000 +2.45%
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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, Fundamentals & Analysis


The Lon Term Long Term Outlook is back to CAUTIOUSLY BULLISH As mentioned yesterday – When the Long Term Outlook is changed we often go back and forth for a while as stocks move above or below key support levels

The discouraging part of yesterday’s rally is THE LACK OF VOLUME . Once again upside moves have little volume and downside moves greater volume. Volume has historically been the #1 confirmation factor of market direction. So this is a very bearish sign

However – The Dollar Rules. Yesterday the dollar moved above the previous days high and closed lower than its low (See chart below). Technical analysts get very excited about a reversal that “engulfs” the previous days move. It fell  over 0.50% which is a significant drop. Investors411  predicted this because it was approaching its  strong resistance level – its 50 day moving average.  As long as the dollar remains below this resistance level - Bearish for the Dollar & Bullish for stocks.

Monitors Question/statement (see comments section of blog)  Sorry I’m not being clear. Yes, I did recommend adding (nibbling) to Brazil and China yesterday (I did) & yes I did lower long term outlook. These ETF’s (FXI & EWZ) had dipped more than 5% & were “buy the dip opportunities.”

NEUTRAL -  Even though it is a downgrade it is still an overall environment that some ETF’s should do well. When  CAUTIOUSLY BEARISH becomes the Outlook t hat its time to sell. Secondly, as mentioned we are on the cusp of change. Lastly, This market is very difficult to call because the old rules about volume have been cast aside and the dollar now rules.

The Dow is outperforming other major US indexes – This is probably due to the fact that these 30 giant stocks benefit most from the falling dollar (relative to other US companies most of more of their profits come from abroad)

Bottom Line – There are no universal rules in market analysis. Right now the Dollar is trumping volume and all other factors in predicting the direction of stocks and this is quite unusual.

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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 @ 30% 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 rose a modest +27 points yesterday and closed at 3013. Exactly what it lost yesterday. A higher high price on its chart pattern has been confirmed The BDI has rallied almost 900 points since late September. =  Bullish for stocks & world trade right now

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The Dollar is currently the #1 forecasting tool . It would be a wild guess to predict he daily moves of the dollar, but longer term fundamentals are clearly negative – the trend of a falling dollar should continue.

$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

US dollar fell a SIGNIFICANT -0.67% yesterday. The dollar closed at $75.96 .  This is almost exactly on its support/resistance level of $76.00

From yesterday – The next important resistance level for the dollar is the falling 50 day moving average (blue line on chart). This is at 76.78 this AM. It’s the line in the sand – Best read of the tea leaves is that it will hold. In fact, Investors411 will add to some positions  as we get close to this resistance level.

Past statements -Last year’s low was around $71,(March 08 ) so there is a long way to go before the major and very crucial support level is reached . The dollar does have a support level around $74.00( a high from about a year ago – see long term chart)


Positions

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

Outside the USA in Emerging Markets (especially China, & Brazil) are much better in the long run - Our problem is one of timing. We can’t get a 5 to 10% dip to invest. Looks like we will get at least our 5 to 10% dip now.  Investors 411 should have much larger positions in emerging markets .

Current positions

EWZ (Brazil) – Bought at 69.5 (4% of portfolio)  Now = 20% of portfolio

FXI (China) – Bought at 42.75 (4% of portfolio) Now = 24% of portfolio

GDL = 11% of portfolio

SPX = 20% of portfolio

For traders also have positions in NVS & CSCO

  • Going to sell some SPX -reasons – Free cash for other investments & take profits
  • Need more diversity in emerging markets than just China and Brazil

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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