Investors 411 Blog

by Barr Jozwicki
June 8, 2011

Playing With Fire.

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

The Game of Chicken

Douglas Holtz-Eakin is about as powerful a conservative economist  as there is.

Here are his money quotes on the Republicans holding the debt ceiling hostage to the demands of their right wing/Tea Party ideologues.

  • Default Would Be An Economic Disaster…Little defaults, big defaults; default’s a bad idea period and there should be no one who believes otherwise.”
  • “We need to grow at this point more than anything else.”
  • “The idea that somehow it’s a pro-growth strategy to raise interest rates on a permanent basis in the United States is just crazy,”

Its one thing for Investors411 to beat the drum for these economic ideas again and again, but when arguably the chief Republican economist (Top economic advisor for Bush & McCain, and runs his own right wing think tank ) says the same thing- you have to realize just how “crazy” and ideologically based  the Republican’s in congress have become.

Those big Republican Wall Street investors should be on the phone right now screaming at the Tea Party they created about realities out here in on Main Street America. Because to manufacture this crisis over the debt now is going to sink not only Main Street, but Wall Street even further. Our focus today must be Jobs and growth.

As Republicans push for “brief” default China warns Republicans -

“They are playing with Fire.”

How blissfully ignorant Americn sheep are, as they are mesmorized by their media’s depictions of the tawdry affairs of a musle bound governor and congressman, to the fiscal realities that threaten to explode.

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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 -0.16% Down
NASDQ -0.04% Flat
S&P 500 -0.10% Up
Russell 2000 +0.28% -

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Technicals, Fundamentals & Analysis

  • RepeatIf the Fed waits weeks/months to offer more liquidity then CAUTIOUSLY BEARISH should be the outlook. (NB I added word weeks)
  • A significant gain evaporated yesterday after Fed Chair Ben Bernanke’s speech was revealed. Bottom Line no QE #3 (additional liquidity) = No rally in stocks.
  • THE MOTHER OF ALL FUNDAMENTAL FACTORS - It trumps everything – No more Fed liquidity = No stock rebound.
  • The McClellan Oscillator (MO) chart rose to -44.65.  US Stocks are moderately oversold. Oversold stocks are the single major technical factor preventing a major meltdown.
  • Markets from the introduction of Fed QE 2 moved higher on weak volume, now they are moving lower on weak volume.

  • Reading The Tea Leaves – Wall Street’s message to world – We are going down until the Fed introduces more liquidity. Technical aspects may be give hints at market directions but fundamentals rule. Investors411 has hammered and hammered on how important Fed liquidity is for many many months. Yesterday’s speech was the cherry on top of proof that Fed liquidity is the 800 lbs. bear in the room.
  • Reading The Tea Leaves – You put an  800 pound bear in a room and introduce fire (see above editorial on debt ceiling) Now guess what happens?

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Positions

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

SLV/AGQ (very roughly 2x silver) Sold 1/2 for +3% profit. Have a sell order in on balance for 3% loss. (see Friday’s comments section of blog.)

REMX(Rare Earth metals) Investors has a 1/2 position in this ETF

NLYAnnaly Capital Mgt. Ultra high dividend stock.

Yesterday – Bought 1/2 position in TZA at 38.65 Bought IMAX at 36.35

The US stock markets have stapled a message in the head of Fed Chair Ben Bernanke. We are not going to buy until you give us more liquidity/stimulus.

The question becomes how low can you go?

Therefore Strategy is clear -

  • Short any rally – Investors411 will use TZA (3X short small cap stocks) and SDS (2x short S&P 500 more conservative) Will add to TZA today.
  • Sell into any rally - Investors will sell both REMX and newly acquired IMAX – Longer term holders of IMAX still have possibility of making out till after premiere of blockbuster Transformer’s movie in July. SLV & NLY seem to be unaffected for now.

REMX & IMAX are NOT Inferior positions and if you have enough insurance/short positions to cover any losses then I’d hold them.

This is very much the same condition as the Silver trade in April, where there was a high probability that the trade you made would work. (both long and short) Shorting rallies is that trade. What will kill the trade is the belief that the Fed will take action and introduce more liquidity. Remember – There’s risk in everything

Disclosure - I own SLV, NLY, REMX, & IMAX (the later should have been in  Investors portfolio)

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Longer Term Outlook

NEUTRAL/CAUTIOUSLY BEARISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

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May 13, 2011

Meltdown

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

Fukushima Damage

Meltdown

Yet more stories of greater than expected damage. Reactor #1 at the troubled Japanese nuclear plant has melted fuel rods. Here’s the money quotes from the Reuter’s story.

  • “One of the reactors at Japan’s crippled Fukushima nuclear power plant has a hole in its main vessel following a meltdown of fuel rods, leading to a leakage of radioactive water”
  • U.S. nuclear experts said that the company may have to build a concrete wall around the unit because of the breach, and that this could now take years.”

“Years” to contain the radiation. Already if you live 10 miles from the plant you are allowed two hours only to retrieve your belongings and have to wear a protective suit to enter the area for those two hours. Anyone who has seen the moving graphic (scroll down) of the radiation plume has seen that plume mostly go over the ocean but also its blown back across central and northern Japan.

The damage has been constantly underestimated by officials, but not by this blog. Year’s of significant amounts of leaking radiation is a clear possibility or probability.

“Crackpot” Senator

” When the devoted follower of crackpot cult leader Ayn Rand gets elected to the Senate, you wind up having Congressional hearings filled up with feverish reasoning like this:Link to video and editorial on Senator Rand Paul (Republican TN) The problem here is much of Wall Street worship’s Ayn Rand who wrote “The Virtues of Selfishness” The video is less than 2 minutes. Check it out.

Paul says if you think you have a right to health care “it means you believe in slavery.” So everyone who believes in medicare believes in slavery. There are some concepts Libertarians/Ayn Rand worshipers (and a Tea Party darling) have right. (example – end empire building) but when you peal away the outer shell its the core beliefs of leaders like Paul that are something rational, reasoned individuals must be aware of.

FYI – Republican congressman Ron Paul (Rand’s father) has officially launched his bid for president.

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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 +0.52% flat
NASDQ +0.63% down
S&P 500 +0.49% down
Russell 2000 +0.82% -

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Technicals, Fundamentals & Analysis

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

  • Weekly jobs numbers came in worse than expected, but not as bad as last week. Two week trend is negative.
  • Economic data for yesterday was poor and tech giant CSCO was down 5%.
  • All this bad news is not negative for the markets, because it means a greater likelihood of some king of managed/manipulate/liquidity driven Fed program will be reintroduced after June 30th.
  • The Fed money supply finds its way into stocks each day.
  • MantraManaged/manipulated markets distort traditional technical & fundamental analysis because of the continued introduction of new market capital. Bad news is good for stock markets again and again and again. – Yesterday is just latest example.
  • What’s happening in Europe very important. Shorter term -The Euro is falling, so the dollar is getting stronger. Longer term – obviously economic hardship in Europe impacts the world.
  • Euro is rising abroad today. Domino’s –  Euro rises = dollar falls = stocks rally

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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 flattened +0.11%yesterday. Third major move higher in 6 day has created a short term bullish trend. Long term trend is still bearish for the dollar. For stocks shorter term trend = Bearish
  • McClellan Index(MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] Mo rose  to +11.41. Still in the middle of its range. Almost equal room to rally or fall = Neutral

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Dividend Stocks

More in this continuing series early next week. See part’s 1 & 2 by using calender at top of blog. Click on May 9th & 11th.

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Positions

Reading The Tea Leaves – Long term outlook below is still CAUTIOUSLY BULLISH and has been that was almost every day since QE #2 started in November. Shorter term forecasting tools

  • The dollar – Stocks have held up quite well despite the short term rally in the dollar. This may continue as long as Fed POMO liquidity keeps managing/manipulating stocks higher. Without quantitative easing (POMO) the dollar would probably rise a whole lot faster
  • MO has been in neutral the past couple days and given no strong overbought or oversold signal. So this shorter term forecasting tool is parked in Neutral

Analysis – Overall long term, remains the same CAUTIOUSLY BULLISH, probably will till the Fed QE2/POMO ends on June 30th. All the printed money has to have somewhere to go and stocks have higher yields than the near 0% interest rates of banks and better but still meager yields of bonds. If US stocks falter after 6/30, there will be strong pressure to continue to have some sort of liquidity program by the Fed.

UUP - The tracking ETF for the dollar still the index to watch. Dollar up significantly = stocks down

Disclosure - I have personal ETF positions in REMX and manage a fund that has a 5+ year position in GLD. I also own NLY and AGNC mentioned above

“I have a position” = Either I own it personally or a member of my family does.  I also manage an account for a non profit organization.

The Investors411 Portfolios – See POSITIONs Section of blog. – Click on word POSITIONS at top of page.

  • REMX – Still trading above 50 day moving average which would be a buying point if your interested in owning rare earth mining companies.
  • NLY and AGNC (two recommended high dividend stocks) still too far above 50 DMA to buy. Have buy order for NLY at 17.70
  • YSL stocks according to longer term market outlook CAUTIOUSLY BULLISH are  in a position to buy. Shorter term Investors411 feels a lower MO is a superior buying position. Also each stock individual performance obviously matters. See Paul’s remark’s on right side of blog.

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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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March 30, 2011

Is the Sky Falling

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

Chicken Little getting ready – From the Disney Movie

Is the Economic Sky Falling?

There’s some pretty positive results from economic measures taken so far. Employment figures have turned, stocks have rocketed higher and we avoided a second depression. But there are those that see things getting a whole lot worse rapidly.

Here’s a relative credible analyst Chris Martenson who believes the economic meltdown is upon us and how to prepare for it. He has lots of valid points, but I don’t share his degree of severity

Yankee Bob Is Back

In the comments section there’s a well thought out debate on Libya.  But just before baseball season,  Yankee Bob launches another editorial.

You can read Bob’s editorial and others in yesterday’s comment section (scroll down) An excerpt and a suggested link below.

“Libya is important but not nearly as much as the the Rights Jihad against worker rights and what is unfolding at Fukeshima.”
Yankee Bob
http://www.nytimes.com/2011/03…

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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 +0.67% up
NASDQ +0.96% down
S&P 500 +0.71% up
Russell 2000 +0.94% -

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Technicals, Fundamentals & Analysis

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

BUBBLE-ICIOUSInvestors411 term for the stock market – We are all riding on the outside of an ever expanding &  Central Bank manipulated liquidity stock bubble. See Investors411 STRATEGY section for more

  • Chart above from the St. Louis fed itself shows the amount of liquidity (BASE ) that has been injected into the US economy. That’s over +2.4 Trillion
  • With a growing supply of money like this, and zero % interest rates its almost inevitable that US stocks grow in value. (reasons for this listed in past Investors411 for many moons)
  • Almost every credible technical analyst has called for a major correction weeks and months ago.  This increase in money supply has trumped their predictions and trumped some major black swan events. Yes, everything is bubblicious and the longer it stays that way the bigger the pop at the end.
  • Take Advantage of This While it Last. Fed POMO is over June 30th and who knows if we will have another. It’s possible at some stage that investors/hedge funds/brokerage houses will front run this number and sell.
  • The major sign for a bubble bursting would be the dollar collapsing or your typical high volume climax run.
  • Here’s a relative credible analyst (above) Chris Martenson who believes the economic meltdown is upon us and how to prepare for it. He has lots of valid points, but I don’t share his degree of severity.
  • Oh yea, another low volume rally market manipulated rally yesterday.  Bad news – Poor consumer sentiment was the spark for a rally.

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Shorter Term Forecasting Indexes

  • The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks]   The dollar rose a wee bit +0.16. Bearish longer term pattern still in place, but it started  a four day bull run that’s stalled out over the last two days.  For stocks = Bullish/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 back to +25.34. Over past three months The MO has had problems getting over +30. = Neutral/ Bearish

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Reading The Tea Leaves

MO is telling us that we are getting close to an  overbought resistance area (+30). However the dollar is the perhaps the key metric to watch. Falling dollar =rising US stocks.

What to watch todayMarket movers

  • USO - ETF for oil - Oil up = stocks down - Now back above $100. - Headlines from Libya.
  • UUP - (Tracking ETF for dollar) Remember - The dollar is a contrarian indicator. Bad dollar = good stocks
  • AAPL – Trading below 50 day MA is bearish.
  • Japan Rector Developments

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Positions

The POSITIONS Section at top of the blog is a link to 4 different portfolios. It’s full of investment idea. Below is the actively managed portfolio #3 – Aggressive ETF Trading – To follow this and Portfolio #4 Your Stock List keep an eye on the daily blog and the comment section.

(I do manage 6 accounts that have other positions).

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

  • UWM. (2x long small cap stocks) Sold 1/2 for +5% gain. Remainder up +10% now. Sell order  for original UWM position is a 5% trailing stop
  • A Hedge – Day two = UWM +1.88% & EWV + 0.22% day #2. – Even though day two has put this trade 2% in the black I’m considering ending it. Japan’s central bank is manipulating the currency, with the help of other central banks and this mitigates the impact. Plus I’m feeling guilty over making money over a what I think is going to be a worse disaster.

ETF’s currently Under Consideration.

UCO -(2x oil prices) Why not, its also a hedge against higher gas prices. -

REMX (Rare Earth ETF) - Really believe this a good long term holding. Up 3% yesterday on verge of breakout. A risk, but, this area because of limited supply and big demand is going to outperform almost all other sectors. A buy.

DGP – (ETF is 2X gold) also SLV (silver). Breakout on worries of future inflation – Gold is moving inversely to the dollar - Dipping has my interest today, but still too far above its 50 day moving average to buy.

DBC - (Commodities ETF) For a more complete list of commodity ETF’s see POSITIONS listed at top of blog  DBC is tilted to energy.  A good alternative would be DJP that is more agriculture and metals -

RJA (Agriculture commodities Index)An ETN, not an ETF.

UWM (2x small cap stocks) TNA (3X small cap stocks)

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Look for Paul R’s (Paul is at an investment seminar this week) always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION“ section of blog (at top of page) 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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