Investors 411 Blog

by Barr Jozwicki
January 31, 2012

We bring Bad Things to Life

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

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We Bring BAD

Things to Life

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General Electric

World’s 17th Largest Company


All we want is a level playing field


Trillions of dollars are flowing into an oligarchy of  giant corporate  and wealthy individuals. One group that is  being decimated by this oligarchy is American small businesses.

Mom and Pop want to start a small business in America. They hang up a sign that says OPEN for business.

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Small business are American job creators. In a large part because they have not yet reached the size where it is profitable to outsource major components of their business.

Example: Apple Computer has 43,000 US employees and creates 700,000 jobs in Asia.

The problem is they can’t compete against the giant corporations and their Army of Lobbyists and Lawyers

The corporate oligarchy has one huge advantage

TAXES

Most American businesses are taxed at 35%. That is unless your special like Romney’s Bain Capital and other venture capital firms and hedge funds. Their taxed at 15%

The real problem is giant corporations own the politicians in Washington

What does GE pay in Taxes?


  • GE Had $14.2 Billion in profits ($5.1 billion in the USA) in 2010
  • GE got $10 billion+ in Bailout money because GE Financial was way over leveraged.
  • GE has a huge tax division that is run by & employs ex Treasury and IRS officials.
  • GE was just fined $63 million for IRS violations.

Tax rate – Do they pay

35% – WRONG

15% -WRONG

5%- WRONG

0% –  WRONG

GE in 2010 had a tax benefit of $3.200,000,000

63% Tax Credit RIGHT ANSWER

of what they profited from in the USA

Not only is this an unfair competitive advantage, buy you the tax payer are missing out on billions in potential tax revenue.

In fact YOU (the government) owe GE $3,200,000,000

as write offs on future Taxes


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STOCKS

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Longer Term Outlook

3 months+

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Still

CAUTIOUSLY BULLISH

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AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMMAR  ERRORS.

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December 14, 2011

Jonas Salk’s Gift

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

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Jonas Salk’s Gift


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Yankee Bob (Conclusion from Monday’s Editorial)


It was easier in the 60′s. The End the war hippy dippy back to the earth  Counter culture became the dominant narrative.

The counterculture said to popular culture’ Hey, your institutions told me to love one another, how can you send me around the world to kill people I have no quarrel with? How can you send me to kill yellow or brown people in the name of freedom and liberty and then discriminate against people of color  at home ??? Counter culture simply held the mirror up to society’s face and cried

“Hypocrisy”.

We have to do that again! Society has to function for the greater good of many not just for the greed of a few. There is no doubt about the need for social change and social justice. There is no doubt that our political institutions are dominated by greedy corporate interests. Change will have to come from the ground up and not imposed from the top down.

We are many. The greedy are few. I hope. Can you imagine someone tomorrow announcing that they have a cure for HIV and AIDS and that they are making a gift of it to the world?? The  Talmud commands that we not shall stand idle our neighbors blood or suffering.

Our leaders like Obama are disappointing. Our Religious Institutions are too busy worrying about Gays and defending their pedophiles to be a force for social justice.

I think we have to organize from the ground up. Unions probably offer an effective vanguard for social justice. The Occupy Movement does too  in the sense that at least it is a demand for social justice.

Yankee Bob

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STOCKS

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Europe still has Significant Influence over US Stocks

Depressing Paul Krugman Editorial on Europe & Depression


Economic Overview


Economically we have a broken opaque worldwide shadow financial system.

No surprise conclusion for Investors411 readers.

When you look out over years this system is unsustainable. We face a very real rise in increased nationalism and trade wars. Any significant disintegration of  the European Union would be a disaster, as would a trade war with China. These are both very possible realities.

The world is running on etherial money – Credit Default Swaps/Derivatives (“Financial WMD’s” – Warren Buffett) Over leveraged, thinly regulated shadow banks proliferate.

Politicians are like magicians who divert you from the reality of what’s happening. Our too big to fail financial system is broken. Our formerly democratic government has become a tool for major corporations to privatize the profits for themselves and socialize the risk to the vanishing  individual middle class taxpayers. (see yesterday’s George Norboe editorial for more)


Company Profits vs Taxes Paid vs Lobbyists Paid

[See latest chart below]


Short term major companies are sitting on a mountain of cash to prop up their stock prices. The Fed is manipulating behind the curtain using its printing press to keep world economies afloat. It works for now, especially for the larger companies and stock prices.

The BUT is sooner or later you run out of fingers to put in the leaking dike.


SOURCE


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Strong correlation between Europe and US stock opening price

Germany’s DAX down 0.72% at 6:15 AM EST

DAX down 0.90% at 8:50    AM EST

Even better indicator is the Italian 10 year bond Price. Italy is the biggest European country in trouble and a yield of 7.0% has forced other European countries into “controlled bankruptcies.”

Italian 10 year bond up slightly at 6.69% at 6:20 AM EST

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Reading The Tea Leaves

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Our #1 technical forecasting tool, the McCellan Oscillator fell  to -36.02 . 50DMA at +11.59 = NEUTRAL/bullish

The S&P 500′s 200 DMA is proving to be a strong resistance level for US equities.

Technically, the resistance level of the S&P has held and the bulls are in retreat. Fundamentally, the Fed announcement yesterday offered no new public help. Both signs are BEARISH

Shorter term Outlook (week)

  • The Santa Clause/end of year selling pressure will have a positive impact. – Maybe NOT positive enough to turn stocks.
  • Key technical guide, and it has been very accurate throughout this cycle, is the MO
  • We have just started to enter moderately oversold territory (-30) We hit @-140 in early Aug & @-105 in late Nov.
  • Therefore,  there is a ways to go ( -36 to -105 = 69 points) before  we get any kind of solid reversal area.

So not expecting any technical help in the short term. Any reversal is going to have to come from some major change in fundamentals.

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Paul’s Corner

3.24% YSL 7 vs. 2.56% S&P 500

Wow a nasty sell off into the close yesterday. As Ron Brown suggested in his morning report this is a very risky market. Most of the YSL 7 stocks are performing well, even in the daily market yo-yo actions. The following chart shows current group performance.

Chart Link:

SIMO was recently added to the Nasdaq 400 and 500.

LINK

Ron Brown HGSI had a great Weekend Report this past Saturday where he discussed Wolf Packs of stocks, i.e. stocks tend to run in groups and how to find them.

LINK

FTK has done well these past few weeks and it has approximately 6 days of short interest. Will you enjoy the short squeeze?

Jeffrey Scott, an HGSI user, had a great webinar last Wednesday evening. He gave a cooks tour of using HGSI and the ferreted out some great stocks.  The webinar is available for download. If you have ever wondered what HGSI can do, this video will show you.

LINK

The file is a zip file and includes the video and the power points. It’s a big file and you need high speed access.

Quite a few buy the dip opportunities these past few days giving a chance to ease into positions. Please review our Buy the Dip guidelines:

LINK

This is still a risky market to trade, please keep it in mind.

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Current Positions

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Strategy – Buy the Dip of trending sector/stock

Paul’s tutorial on Buying the Dip

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

SSO - (ETF that is @ 2X long the S&P 500) Bought, on dip at 46.20. A 5% stop loss order on this stock. Sadly our -5% stop/loss order was hit yesterday at 44.90. Sold for -5% loss

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

All of Your Stock List #7 with links to charts may now be found  in the Positions Section of blog. (Scroll down)

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Longer Term Outlook

3 months

Fundamentals behind the LTO -

The Fed has seemingly committed to do whatever it takes to hold things together, from US equities to the European Union. Over the last few years our Fed has been a successful major manipulator of US equities -higher. Working with allies it is attempting to do the same on a global scale.

The Fed’s manipulations do NOT fix the root cause of our over leveraged opaque financial system. They, at best, offer a temporary solution to keep stocks afloat.

Basic fundamental is still Don’t Fight the Fed. However, the Fed’s actions/manipulations are often not transparent. So when the the public announcement after the Fed meeting shows no change markets get spooked. Therefore downgrade to

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NEUTRAL

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

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMMAR  ERRORS.

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October 27, 2011

Springtime Then Reality?

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

Springtime For Europe Then Reality?


We have another major solution to the Eurozone Crisis. German stock market up 4.84% at 8:20 EST and climbing.  So favorable reviews from Germany should transfer across other stock markets . Globalization at work. NYT’s #1 story today. Two biggest points.

  • Greek’s default grows from 21% to 50% on bonds
  • A $1.4 trillion bailout package to protect banks from  bad debt of all the debtor countries in Europe.

Zero Hedge (libertarian view) negatively dissects some of the details. - A Farce, & Springtime For Europe then Reality - Citigroup’s conclusion, does a good job at outlining what happened and next steps.


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The Lobbyists Dream Candidate


The lobbyists in Washington have chosen their Dream candidate - Mitt Romney

  • He’s raised more lobbyist money than all the other Republican candidates put together
  • 6 times the amount Obama raised from Wall Street

Mitt just had another Washington lobbyist fund raiser in DC and the invite list included the “Dozen” Biggest of K Street  lobbyists who run our government. Link and Link and LINK

Obama was the last presidential candidate that K Street showered  a just bit more $ on than the challenger  and the negative results are evident. This time around its not even close.



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STOCKS





From Yesterday - Europe … If gains are allowed to be privatized by financial companies  and the risk socialized by the people the financial stocks involved will push stocks higher in the shorter term. It will be more poverty for the middle classes who will pay the bill… My read of the Tea Leaves is stock will keep erratically moving higher.

Today’s move higher should be Dramatic
Not Erratic
  • Over three weeks ago Investors411 stated for those that could handle the risk a RISK ON Trade off the market low was probable.
  • Monday The Long Term Outlook was changed to CAUTIOUSLY BULLISH
  • The major fundamental reasoning behind the rally was discussed this week and is summarized in brown above.

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Reading Tea Leaves


  • Our secondary indicator, the Put Call Ratio is at 1.01 = Neutral.

  • The PCR is telling us that the professionals who use the Puts and Calls are Neutral. However, since the 50DMA of the PCP is not at 1.00, but much higher at 1.17 Sentiment = Moderately Bullish

As stated before the events in Europe trump this like they did after the 2008 meltdown.

Then, the MO fluctuated between +110 to +20 for two months. At that time there was the start of a set of solutions led by our Fed and Treasury that lite a fire under stocks for two years.

The MO should reach OMG overbought levels today (over +80). This may slow down the stampede and create some dips to buy.

  • Now, it seems like the perception of investors is that  the proposed solution in Europe will do something similar tot he stimulus of 2009
  • Stocks, especially financials should do better, but just like 2008 people/taxpayers will suffer in Western Democracies.
  • The 25% of global growth this year that comes from China(Time magazine) is critical to bullish trend developing.

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Paul’s Corner

3 Days of Ian Woodward

This past weekend I had the great pleasure of attending the fall HGSI Workshop in Palos Verdes Ca. The workshop featured lecture by Ian Woodward and Ron Brown from HGSI. Let me give you a few of the details.

Ok ok, I can hear the moaning, “Oh no here comes more Ian Woodward and HGSI talk”. Please folks humor me, read on!

Ian and Ron’s discussion lasted for three days. Interspersed throughout the weekend there were several guest speakers who added to the value of the workshop.

Ian showed us his research behind HGSI investing and Ron gave live market demonstrations how to maximize using HGSI.  This meeting really helped us understand the undercurrent of the market. Ron and Ian showed us how to get insight using HGSI and related tools in a predictive manner.

Fred Richards – an HGSI contributor, Harvard Economics Professor and longtime expert investor gave us a great overview of the world economic stage and what to expect going forward.  Fred is a great CANSLIM type investor with decades of experience and great stories. A friend of his when growing up was William O’Neil of Investor’s Business Daily.   It was wonderful hearing Fred and by good fortune I sat next to Fred at dinner Saturday evening. Ian bought dinner for all at a wonderful Mexican restaurant

LINK

Chris White demonstrated his new software EdgeRater 5.0.   Chris demonstrated how using HGSI, one can do an end of day update across the market of index, ETFs and Stocks in just a few key strokes.  Perhaps the greatest benefit of using EdgeRater with HGSI is EdgeRater takes many of the tools developed by Ian and Ron and automates them in EdgeRater giving us a predictive look into the markets.

LINK

Chris Wilson an HGSI user demonstrated his techniques for Pairs trading.  Using HGSI and a non-proprietary set of tools using HGSI, Chris broke new ground with a technique based upon the changes in RS over time between an equity and a comparative index or ETF.

Dr. Jeffrey Scott, an HGSI user, presented stocks for consideration of our next JIRM index, our early warning indicator of a failing market.  For background, check out Ian’s blog, posted on the HGSI website: Stock Market: Doom and Gloom or Plain Sailing? September 25th, 2011.This exercise gave us early insight we are clearly seeing rotation into unusual leaders such as SBUX, KMB and MCD. This rotation reflects the current fear in the marketplace.  This was an excellent lesson in chart reading and fundamental analysis. We ended up selecting 19 high quality leaders in this exercise. Only attendees have this list and if you wish to see it you have to attend a work shop.

LINK

For me the highlight of the workshop was a brief lecture by Gil Morales (author of Trade Like an O’Neill Disciple) to review his tidea on current market conditions and update us on pocket pivots.  Gil was supposed to give an hour discussion but it soon turned into 2 ½ hour lesson of correctly shorting a stock. Gil also painted a concerned picture on the market and gave us some names to consider shorting.  Gil was an analyst for Investors Business Daily. He uses HGSI to scan for pocket pivots. A pocket pivot signal gives a very early signal that a stock is getting ready to break out. I have studied the signals for months now and they do appear to be a very good early indicator.

LINK

My wife joined me on this trip and we took some time touring Pasadena, Hollywood, Beverly Hills and Bellaire. She really enjoyed buying clothes! I was a great weekend.

We all like to talk about our best stock trade. The investment I made this past weekend with respect to time, air fare, hotel, Seminar cost has to be the best stock investment I have ever made. It was an outstanding weekend.

If any of you are serious about developing your trading skills, Ian’s next workshop is scheduled for March 24-26. I encourage you to join us.


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Positions


SPY – (ETF tracks S&P 500 or SPX) bought at 122.5 (See Monday’s blog for details)

Your Stock List#5 - Mea CulpaHolding stocks through earnings season is always dangerous. 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. Their positions will be closed at end of day. LINK to entire list (scroll down)

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

Bottom Line - It looks like a trend is starting. This is a significant bailout in Europe. There will probably be more. Little discussed China is the key to global growth and this trend developing.  The greatest risk is at the start of a trend, but also the biggest reward. Obviously the trend is NOT solidly in place.


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Long Term Outlook

3 to 6+ months


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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April 26, 2011

When did Democracy die?

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

DSC00109

Photo from Common Dreams

Chris Hedges is a graduate of Harvard Divinity School and a 2 decade long correspondent for the NYT – also CSM, DMN, & NPR. The Acadamy Award Winning Film – The Hurt Locker opened with a quote from a Hedges’ book.

One can defend may things about capitalism. However, Hedges writes a potent editorial that starts -

When did our democracy die?”

You may think this introduction is over the top, because the fact that I’m bringing you his words shows that the flame of democracy still burns. However,  Hedges does make many substantive points that are thought provoking.

  • When did the press, labor, universities, the Democratic part.. wither and atrophy”
  • Is “corporate power” … “inverted totalitarianism?”
  • Over decades – “a massive redistribution of wealth.”
  • “These [corporate] elites do not have a vision [of democracy] . They know only one word—more.”
  • The money quote -

although the heads of state or elected officials in Congress have become largely irrelevant. Lobbyists write the bills. Lobbyists get them passed. Lobbyists make sure you get the money to be elected. And lobbyists employ you when you get out of office. Those who hold actual power are the tiny elite who manage the corporations

What do YOU think?

Is Democracy Dead?

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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 -0.21% down
NASDQ +0.20% down
S&P 500 -0.16% down
Russell 2000 -0.17% -

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Technicals, Fundamentals & Analysis

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

  • All eyes on silver trade yesterday and today as climax buying (LINK to definition) reached a peak yesterday and a meltdown in foreign markets this AM.
  • Stocks continued to have abysmal volume, despite the fact that we are in the middle of earnings season.
  • Low volume gives Fed’s quantitative easing more influence to move markets up.
  • US dollar in clear long and short term bear run. – Good for stocks in short term.
  • Good contrarian article on the possibility of a dollar rally. This would hurt stocks. Do see possibility of short term rally.
  • News of the week  - Bernanke speaking after the Fed Meeting Wednesday (Thanks to EW for mentioning this in comment section of blog)
  • What investors want to hear from Bernanke is more quantitative easing or QE 3.
  • The big longer term news is the ramification if the dollar continues to fall (See editorial above)

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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]   -0.17 yesterday. Clear longer and shorter term bearish trend. For US stocks = Bullish
  • McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] Fell to +10.47. = Neutral

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Reading The Tea Leaves

For Silver and Gold investors - Obviously  these commodities went elliptical or had a climax run. or a blowoff top yesterday. Translation – So many investors bought silver that it ran out of buyers. See SLV chart below and look at the big volume SLV on last Thursday & Friday and the record massive volume yesterday. Look at how far above its 50 day moving average (blue line on chart) SLV is.

Silver is the leader and gold went along for the ride. So it too is taking a hit in sympathy with silver.

Since its peak Sunday night SLV is down almost 10% as I write.

The fundamentals, as described yesterday, have not changed. However, we have to wait for the bears to take a bite out of gold and silver before getting back in. Simply too many folks pilled in too quickly. Perhaps the dust will settle today/a week/ a month/ longer. This is much harder to predict than a climax run. Because the fundamentals are so strong, I look for a shorter rather than longer meltdown.

For Stock Investors – It’s the middle of earnings season and volume was abysmal. That means the Fed’s quantitative easing rules and the bulls have the momentum. One very significant point is the dollar did not rally as silver fell from yesterday’s high. Perhaps it will today and this will negatively impact stocks. Sometimes there is a delayed reaction.

Bottom line is that the dollar down/stocks up trends are still in place, but may be in correction for the next day or two. Bernake’s, first time Fed chair speaks after a FOMC meeting, on Wednesday is a market mover.

For long term traders and everyone –  Arnold, the Terminator’s, famous words for gold/silver – “ I’ll be back” invested in silver/gold. We had a year’s run compressed into a month.

The learning part of all of this is sell into a climax run. Judging from the comments section lots of you did just that.

CONGRATULATIONS

NB – Check out chart of REMX. (Rare Earth Metals) It too had a climax run around New Years day. It reached a high of  @27, then and is now over 28. Consolidating gains after breaking out to a new high.

What to watch today - For shorter term traders – Market movers.

  • USO - ETF for oil - Oil up = stocks down.
  • UUP(Tracking ETF for dollar) Remember - Usually the dollar is a contrarian indicator for stocks. Any major fall may give temporary help to US stocks, but a major breakdown also signal major structural problems with the USA.
  • SLVWent elliptical and in meltdown

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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. The actively managed portfolios #3 &4 - Aggressive ETF Trading & Your Stock List.

Check out YOUR Stock List. - 6 or 7 of the 15 stocks are at highs

Disclosure – I have personal  positions in REMX,  SLV (small covered call position@ $40) RJA and manage a fund that has a 5 year position in GLD

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Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. SeePOSITION 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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June 23, 2010

Killing America’s Soul

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

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

Wall Street Killing America’s Soul

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

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

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

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

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

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

The General & The President

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

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -1.43% flat
NASDQ -1.19% flat
S&P 500 -1.61% up
Russell 2000 -2.14% -

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

Technicals, Fundamentals & Analysis

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

Fed makes interest rates announcement today.

YOUR Questions

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

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

Significant Indexes

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

Reading the Tea Leaves-

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

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

Positions

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

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

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

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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June 10, 2010

Secrets, Clffs, & Dancing

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

The Center for Public Integrity

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Center For Public Integrity

The two top groups of journalists out there doing investigative journalism in the public interest are the Center for Public Integrity. and

OpenSecrets.org - Center for Responsive Politics

OpenSecrets.org

Both groups aren’t afraid to go after the polls and power brokers/lobbyists whoever they are. Stories like-

The main focus of YOUR comments over the last few days has been on BP. These two sources above will help. The Huffington Post today echos what YOU said yesterday British Petroleum’s is Worth More Dead than Alive. Yesterday’s -15% drop in BP stock price, if continued, means that YOU – the Tax payer could end up paying for this disaster because BP may soon become bankrupt.

Rolling Stone, sorry Obama fans, front page story is The Spill,the Scandal & the President The Spill is clearly BP’s fault, and Cheney/Bush put the lobbyist and former business executives in place in far more than the energy industry. But, Obama has failed to clean house. Not the change we can believe in

Big Political Shift?

The lead NYT story today focuses on what Investors411 mentioned yesterday – California’s overwhelming passage of Prop 14 -

“traditional party primaries will be replaced in 2011 with wide-open elections. The top two vote-getters — whatever their party, or if they have no party at all — will face off in the general election.”

There are positives and negatives in this legislation. But overall it seems to give more power to moderate voters or have candidates appeal to a broader base in order to win. There are lots of variables, but its certainly a change.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -0.41% down
NASDQ -0.54% down
S&P 500 -0.59% down
Russell 2000 +0.10% -

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

Technicals, Fundamentals & Analysis

Stocks are dancing on the cliff’s edge. Last few Investors411 have focused on how close the major indexes, especially the benchmark S&P 500 are from breaking their last major support level. The S&P (SPX) yesterday closed at 1055 and that edge is at @ 1040.

Major indexes are down @-13 % from their highs. Two different talking heads on the financial channels have mentioned -15% down is a significant figure. Because if its reached over 80% of the time it means -20% or an official bear market will follow.

When you combine this with the fact that we are close to this years low/support level its like dancing on the edge of the cliff.

Good news is stocks fell in decreased, below average volume = Bullish

Bad news volume increased as stocks fell & we ended the days near the low= Bearish

Bernanke spoke to the markets and created a bright picture in the AM. He emphasized “Don’t Cut Spending.” and our recovery while slowly progressing was still “fragile.”

Besides the dollars decline from highs what Yankee Bob brought up – BP - was behind the late day selling. Of course its impossible to exactly know since perhaps 80% of the trading is done by the huge sophisticated computers of mega institutions and their proprietary algorithms.

Futures are up dramatically this AM = Bullish

Significant Indexes

  • McClellan Oscillator rose a bit yesterday to -21.25 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. We are a smidge overbought, but basically = NEUTRAL
  • US Dollar –  The dollar fell about the same amount for second day in a row -0.35% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. The dollar had fallen @ 1.00% but rallied in mid afternoon, sending stocks lower. NB – The currency markets dwarf the stock markets in size.

Reading the Tea Leaves – The dollar will probably dominate stocks till earning season. That’s along time for a lot to go wrong or other shoes to drop in Europe. If you want to get really depressed here’s The Black Swan author Nassim Taleb on Debt, Spreading Like a Cancer

Hopefully you don’t share his gloom and doom, I’m more optimistic. But he makes some relevant points.

Traders – Rally day that gets sold into because few want to hold longs over weekend. Watch for news out of Europe.

Positions

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

Investors -It’s simply NOT a time to be in stocks. The long Term Outlook is negative – CAUTIOUSLY BEARISH. Why invest when it looks like stock will be lower over the next 6 months.  The single largest positive we have is stocks become so oversold they stage a counter rally and over the period of perhaps a week to a month you can make profits going long.

The second way to score (make money) is to use the ETF’s that are short the market like SDS (2X short S&P 500), UUP – that is an investment in a rising dollar and/or GLD. The strategy remains the same – buy the dip.

One reason to invest so that you make $ if the markets fall is a hedge. Your income may suffer, so at least on the other end you’ll make money.

Investors411 opened a 2% position in UUP (ETF tracks the dollar)at @25.60 (Have to double check this figure) Will buy more on dips.

Still holding very minor positions in VCI, ESRX & SDS

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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