Investors 411 Blog

by Barr Jozwicki
January 11, 2012

Arianna

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

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Arianna

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Arianna Huffington

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Arianna is the most powerful women blogger out there.


This summer her Huffington Post surpassed  the NYT in

number of hits.

Why?

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There are several reasons, but perhaps paramount is this woman knows what to write about and how to write.

Some gems from her latest on the 2012 Republican election campaign


The Disconnect Rises


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…some might expect that the seemingly endless debates and breathless saturation of media coverage of it all would converge into a real discussion of our major problems…. What we got instead was a deluge of attack ads, largely financed by the super PACs allowed by the Citizens United decision.

Former George Bush aide John Bridgeland, who helped found Opportunity Nation, professed himself “shocked” by America’s standing relative to Europe and Canada. “Republicans will not feel compelled to talk about income inequality,” he said. “But they will feel a need to talk about a lack of mobility – a lack of access to the American Dream.”

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Since Last Friday Investors411 has focused on the negative impact income inequality has on countries.

Those countries with greater income inequality like the USA have far more health and social problems.

Inequality vs health and social well-being

To Live the American Dream

You Don’t Have to Move To Denmark

You Can Fight For It Here


The Equality Trust is a group co Founded by Richard Wilkinson whose TED lecture has now been viewed by over 700,000.

YOU Can Make a Difference

Spread the Word

Join the Equality Trust


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STOCKS

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Wall Street Bull and OWS Symbol

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  • JPM  the before the bell earnings report Friday will set the tone. Big banks are leaders in the current rally and JPM is perhaps the most solvent of the group.
  • Our #1 technical forecasting tool, the McCellan Oscillator (MO) rose to +56.65 . 50DMA at +0,37 Getting close to overbought territory – about +60. Since early 2008 a reading near +90 has indicated a reversal is coming, (for more see  STRATEGY link at top of blog)= NEUTRAL/bearish
  • Starting to get worried about market being too overbought. One 200+ point Dow move would put us close to +90 or way overbought.
  • The benchmark S&P 500 held onto its gains yesterday. We took out the October high – but the move was relatively minor as was the volume increase. A timid breakout.
  • The tea leaves seem to say that the rally will fizzle out in the end of January. It will be a higher high and perhaps we can also establish a higher low.
  • USA is leading right now, but can be dragged down by Europe, China, Iran, no payroll tax cuts and/or an unforeseen event.

Overnight Data From Europe

Germany’s DAX

Italian 10 year bond

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Paul’s Corner

Home Builders?

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Last week in the comments section I mentioned the home builders are moving in the following post.

LINK

I also posted later in the day, a spread sheet with home building stocks that past first muster with me.

LINK

It looks like a home builder or two should be added to Your Stock List 2012. To do that we need member support to look at the stocks and make your suggestions. Perhaps I missed a great home builder one of you is familiar with?

I have already selected and purchased two builders for my own portfolio (which I won’t mention) and will probably add a related stock. (Which I did)

Kindly take a look at the home builder stocks and make your suggestions as to which stock(s) we should add!

Chart Observations Jan 10

AKRX – gave you a buy the dip opportunity yesterday

BKI – buyable any small dip

CATM – basing above the 50

CMG – in a buy the dip position

DLTR – basing on the 17

ENB – pulled back and safe to buy if it stays above the 17

FTK – Charge!

IBM – pulling back, below the 17 and the 50 wait!

KOG – in a buy the dip position

MA – Possible short term bottom of this pull back

MNST – basing above the 17

SIMO – getting extended, buyable any small dip

TSCO – crossed above the 50, buyable, positive Kahuna

Disclaimer – All discussion is made for education only. At any time any stock may turn into an instant dog, it’s your responsibility to monitor your portfolio. Please do not count on Investors411 to issue a sell order and save your grand kid’s inheritance. At the time of writing I personally have positions in stocks included in Your Stock List 2012.

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Event Driven

Combination Option Trades

Investors411, started last year to go over many different kinds of more conservative option trading.

Strategy – What we are looking for is to make a big score over the event. We may make smaller gains/losses +/-50% many times before a big hit. By holding options further out you have less gains, but also a chance to minimize losses.

MOS – We are well past the event (earnings report) There are some of you still hanging in with Jan 21st options.  It was close to break even yesterday if you sold both the call and put.

AA – This was considered and rejected. The correct decision

JPM – Under consideration. Reports Friday before the bell.

NFLX – Almost pulled the trigger on the January 13th option combination Call at $100 for  340 and put at $95 for 250 yesterday. However, it looked like we may be just too late into a volatile rally. Will probably focus on the Jan.25th earnings report.

See comments section for updates on any trades


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Longer Term Outlook

3 months+

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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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October 17, 2011

Going Global

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

Going Global


The Occupy Wall Street Movement has exploded globally to about 1405 locations worldwide. [OccupyTogether.net]

I did have the pleasure of spending time both Saturday and Sunday at Occupy Boston. From the street workshops I attended – a universal theme of jobs, fair taxes and financial oversight were the major themes.

Some major points.

  • Top 1% of Americans combined posses more wealth than the bottom 90%
  • 400 wealthiest Americans have a greater accumulated wealth than the bottom 150 million Americans
  • Between 2002 and 2007, 65% of all economic gains went to the richest 1%

None of the workshops or discussions I had preached hatred of the rich, only that we needed a more balanced approach. Since the weathies 1% are making almost all the gains, 73% of Americans (Time magazine poll) favor raising taxes on the rich to help balance the budget.

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The Candidate Of Wall Street

Last election cycle Obama was the candidate who raised the most $$$ for Wall Street. This election cycle the NYT (Sunday lead story) reveled Mitt Romney as the candidate of Wall Street.

Show me the Benjamins

  • Romney –  $1,500,000
  • Obama - $270,000

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Britain’s Misery

Timing is everything.

On Sept. 19th Investors411 showed what happened to Japan when they enacted budget cuts = Drop in GDP.

The lead editorial in Saturday’s NYT shows the self inflicted misery in Britian when you cut the budget during difficult economic times, instead of  letting growth return first.

  • “Britiain’s economy has barely grown since budget cuts were enacted last year.”
  • “Highest jobless rate in 15 years.”
  • “GDP growth last 1/4 = 0.01%”
  • “Cut of public sector jobs…has failed to revive business confidence.”

Britain is now instituting QE (quantitative easing) programs of its own to stimulate the economy.  A move fiercely opposed by right wing politicians in the USA.

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Stocks

Google’s earnings report (season now in full swing) led markets higher Friday.  AAPL, AMZN & IBM are the 4 horsemen breaking out to leading tech and equities higher.

From England – why global market’s will rally This is the global consensus  and an excellent explanation of why Bulls have control and we have “started the seasonal rally”

Major European Summit meeting on Sunday 23 rd.  Looks like officials have found a way to privatize the risk and socialize the debt. Just like they what’s happening in the USA.

  • Our #1 forecasting tool, the McCellan Oscillator rose to 80.23 or OMG overbought levels = BEARISH
  • Our #2 forecasting tool, the Put Call Ratiodropped  to 0.99NEUTRAL
  • For more on these two indexes click on STRATEGY section on top of page.

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Reading Tea Leaves

  • Over the last 3 years the MO at OMG levels has always meant at least a 5% decline over the next week to month.
  • The ONLY time this did NOT occur was in  2009 when the Obama stimulus, 0% interest rates, TARP, and QE #1 combined to rescue equities.
  • The pro’s that trade the PCR are NOT impressed with the MO. There PCR is bearish

Bottom Line – It certainly looks like most stock investors/manipulators/traders are signaling a bull market in the future. An event like the 2009 rally may be getting started. Today is the confirmation day of Friday’s breakout from the trading range. It’s hard to ignore how oversold we are.

There is no clear buy or sell signal.

Low volume rallies are acceptable because major institutions, Pro’s, hedge funds and HFT’s believe financial institutions that do almost all trading  think financials and central banks have won in Europe & the US. The people/governments/taxpayers will socialize their losses.

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Investors411 LONG Term Investments

Each day Paul (change setting from profile to activity) offers up to the minute commentary on the markets & YSL #5 in the Comment section of the blog. Catch his Paul’s Corner every Tuesday and Thursday.

Traders – You’d like a lower MO, but at least into the European summit on the 23rd it looks like bulls may rule.  Buy the rumor and after the 23rd it may be sell the news.   The high MO is going to make rallies hard. Kudos to those who bought the last risk on trade when the Dow was 1100 points lower

Because of the OMG MO – Short term traders may be successful in shorting rallies.

InvestorsTechnically, a confirmation of the breakout of this summer’s trading range is bullish and the long term outlook will change to CAUTIOUSLY BULLISH.

Bottom Line The economy is devastatingly poor for the vast majority of people in western democracies, but Wall Street is again winning.

Our Hedge Investment - Theory – Technology will do better than financial sector over time. Thus hedge is set to hopefully work well in both up and down markets.

  • Short Financials – Investors411 will use ultra short SKF (opened at 78.91 – now at 72.20).
  • Long technology - Investors411 will use ultra long QQQ (tech’s) QLD (opened at 81.13 – now at 89.15)
  • @ a 1+ % gain on this trade so far

The four horsemen – AAPL, AMZN, IBM and GOOG should outperform if we move higher. Also YSL #5

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Long Term Outlook

3 to 6+ months

NEUTRAL*

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

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMER ERRORS.

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October 11, 2011

900 Cities

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

900 Cities

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

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

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Bernanke’s

Trickle Down Economics

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

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

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

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

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

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

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Stocks

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Index Percentage Volume
Dow +2.97% down
NASDQ +3.50% down
S&P 500 +3.41% down
Russell 2000 +4.37%

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Market Analysis

Focus on TechnicalsFundamentals & HFT’s

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

Investors411 – Forecasting Tools

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

The McClellan Oscillator (#1 forecasting tool)

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

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Reading The Tea Leaves


Short Term Outlook

days, week+

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

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Paul’s Corner

HFT’s & Hamburgers

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

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

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

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

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

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

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

LINK

Now where are my car keys?

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Current Positions

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

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

Traders

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

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

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

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

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

Investors

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

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

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

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

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Long Term Outlook

3 to 6+ months

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

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

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

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

NEUTRAL*

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

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

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July 5, 2011

Fancy Pants Debt

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

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Fancy Pants Debt

If YOUR eyes gloss over when they explain economics (and even if they don’t)

This 3:49 seconds video is for you.

YOUR investments dollars, from the stock market to your houses value, depend on the quality of debt. So does world economics. Good debt, Bad debt and Fancy Pants debt.

The video is FUN, Entertaining, and educational.

John  Green does more than explain the Greek Crisis “which has pushed the Greek government close to defaulting on its loans, the reasons why the Euro zone and the IMF are desperately trying to bail Greece out, and what the rising cost of sovereign debt means for the massive budget deficits throughout the developed world.”


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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 +1.36 Down
NASDQ +1.53 Down
S&P 500 +1.44 Down
Russell 2000 +1.52 -

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Technicals, Fundamentals & Analysis

Shorter Term Outlook.

day/days/week

  • Fifth straight rally day. Biggest 5 day gains in many many moons is bullish. Overall volume was almost pathetically light. Repeat -  Trading was, of course,  dominated by the High Frequency Traders (HFT’s) and professional trading desks . Most of this trading goes on in dark pools Here’s the video from Bloomberg
  • Technically, the huge 5 day move off a double bottom (prices make a low and test it – see charts on far right) is very bullish
  • Fundamentally last week -we kicked the Greek debt problem down the road. But Greek debt - benchmark 2 year bond is selling at 26%. Is virtually impossible to adopt a massive austerity program and pay a huge 26% interest on the Greek two year bond at same time. Also China said has the inflation problem is under control - Premier Wen. This fueled the rally. However problems in China this AM
  • The McClellan Oscillator (MO) chart rose to +89.65 (above +30 somewhat overbought , above +60 overbought, above +90 OMG overbought) This is just a fraction from OMG overbought levels. 2009 was the last time the MO reached over +100 (twice) This began a long term bull run. Short term  overbought = Bearish
  • $USD The Dollar stabilized after falling for a week. -0.06% yesterday. (+/- 0.50 is a significant move and the dollar is usually a contrarian indicator) Short term tend for stocks now. Will stability hold? = Bullish/Neutral
  • Reading The Tea Leaves - Shorter term  -OMG oversold levels will be reached in any stock rally. This put big pressure on rally to let off some steam. Repeat – Outside the HTF and Trading desks there are a bunch of normal day/swing traders who have missed the rally and are waiting to buy the first dip.

The 5 Day Bull Stampede

Long Term

weeks/months/years

  • Still the risk of bad European debt and our own debt crisis confronting bulls. However, the silver lining investors see is low interest rates for a long time, a Fed managed US market and inflation fears diminishing in China and more time for banks in Europe cushion debt crisis. If there is a mediocre or poor jobs number (this Friday) this could even add oil to a burning hot fire that’s driving the bulls. Poor jobs = More Potential for Fed intervention and lower interest rates for a longer time.

  • Bulls are back and they see a light at the end of a tunnel. If fundamentals in earnings season are decent (starts next week and earnings should do OK) we could go on a run. We are due for a overbought mini dip, but a move of this size off a double bottom in a very strong longer term bullish sign. As we switch from a temporary timeout in European debt to our own manufactured (July 22 deadline) debt crisis fundamentals matter. Still too early to raise NEUTRAL rating.

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Your Stock List

Paul has published to a spreadsheet of YSL #4 in the comments section of the blog.

Sorry many of you had problems with the old link

Like the past 3 YSL’s is beat the S&P 500 our benchmark S&P 500 again

A new YSL is under construction. If You are on the email List send in your choices to me this week.

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Current Positions

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

NLYAnnaly Capital Mgt. Ultra high dividend stock - Up  over 6% in six weeks and was held through the date that allows you to collect dividend. so add another 3% to 4% profit. = +10%

IMAX - Mea CulpaAs expected IMAX and 3D hit a major home run with the new Transformer’s movie over the weekend and I did NOT buy stock for Investors411 portfolio last Weekend. I would have sold IMAX into the Harry Potter movie July 15th.

Paul has published in the comments section (last week) some potential high growth buys

Short term strategy is to short overbought stocks. Bought 1/2 position in TZA near close Friday at 33.00.  MO closed at 89, just one point away from OMG oversold. Will sell quickly for a small gain.

Longer Term Strategy The 5 bulls is a major signal and there are many who missed the rally waiting to pile on.  We’re in NEUTRAL, but a possible positive senerio has appeared (see above)

Disclosure - I own NLY &  a group of dividend stocks which I have used some short ETF’s to protect. (I’ve cut back on short ETF’s) – I buy all stocks mentioned in the hypothetical Investors411 portfolio.

I very much like the position of going long High Growth Stocks (week to months and on dips) and/or longer term dividend plays – yet holding some sort of protection (preferably a Puts over a short term ETF that shorts) in case of sudden meltdowns.

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Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative comments section every day.

Paul is on break for a couple weeks, check Comments Section for a few weekly updates.

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Longer Term Outlook

NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE


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October 18, 2010

Danger Will Robinson Danger Danger.

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

cutaway house

Home Sweet Home – Crisis

Systemic Crisis in Foreclosures/Mortgages?

A major crisis may be emerging from the opaque shadows of the unregulated American financial system.

Can the Obama administration, Bernanke, Shadow Banks and Wall Street push this problem back in the shadows before it dawns on an ignorant public of just how bad their getting ripped off?

Focus is on mortgage and foreclosures systems from the 2008 shadow bank/housing meltdown.

Remember, because of our over leveraged under regulated financial system your mortgage was turned into a note/bond, chopped up and sold many times (credit default swaps etc) and finally even insurance companies like AIG ended up with a big piece of the action.  Well, who exactly owns your mortgage and there were a lot of crooks (fly by night operators – many are no longer in existence) along the road to chopping up your mortgage and owning part of the action.

Throughout the legal systems people were being foreclosed on by entities that did NOT hold the legal right to do so because the mortgages had been chopped up so many times. This problem reached critical mass in the legal system and now AG’s from 50 states are investigating. (see Thursday & Friday’s Investors411)

Major shadow banks were using unqualified “robo signers” to sweep this problem away ASAP to maximize profits. But now its exploded onto a slow moving US legal system because those who were foreclosed on were being unfairly ripped off by ghost entities who claimed ownership to their house. Major question is who holds the foreclosed mortgage???? Who really holds YOUR mortgage????

Bottom Line – Shadow Banks have used inaccurate (illegal) documents to foreclose on homes. Trust issues abound in an under regulated opaque financial system. Investors could loose confidence.

Sources – In descending order of preference on this, because its really beyond my pay scale to understandhere, here, & here

Major Deficit Creator of Our Time

Obviously the 2008 meltdown. It now supersedes, on a yearly basis, the debt created by the go to war, voting for pork and cutting taxes to create a deficit that started in 2000. This made things horrible and is still in effect.

When unregulated casino capitalism exploded in 2008, we were faced with a choice of another depression or an opaque TARP, Stimulus, and most importantly an opaque Fed Reserve Bank printing who knows how many trillions of dollars.

MIT’s Simon JohnsonThere Are No Fiscal Conservatives Out There” – money quote

“If you want to fix the US budget – keeping the deficit under control and bringing down the size of our government’s debt – you have to address the risk-seeking behavior of big banks.  No fiscal strategy can be credible without addressing the major problem that brought us to this point.”

The latest foreclosure crisis is another 2 by 4 over the head reminder of this.

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 -0.29% up
NASDQ +1.37% up
S&P +0.20% up
Russell 2000 -0.22% -

Technicals, Fundamentals & Analysis

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

US Stock Markets -

Volume is returning to US markets for the last few trading days and spiked somewhat yesterday. Much of this was due to the foreclosure problem in Shadow mortgage banks, (See below and above) The Dow spiked significantly higher probably due to huge volume in Shadow Banks BAC & JPM.

Apple reports today, and as The Critic points out in the comments section it is very overbought into earnings. It would probably  take a knock your socks off spectacular earnings report to move Apple tomorrow.

Shadow Banks – There are 6 major mortgage shadow banks and they all took another big hair cut again yesterday. Two big volume down days in a row for major banks (BAC down @ 5% each day) is an enormous plunge.

The earnings report and week ahead for US markets

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar rose +o.52% yesterday. The inverse correlation is not always perfect. However Friday’s rally bearish for stocks.  Overall trend of falling dollar trend for US stocks is = Bullish
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Fell a minor -0.25% Friday An 8 week bull run, then a two week fall. A very slight stutter and now moving up. Trend  = Bullish
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Fell to -1.86. Lot of room to move both higher and lower. Momentum is with the stock bulls but location= NEUTRAL

Reading Tea Leaves.

Helter Skelter – Major forecasting tools and market coherence moved dramatically in different directions.

  • The Mother of all tech stocks AAPL clearly overbought in front of earnings report
  • MO neither overbought or oversold and parked in neutral
  • Two dramatic down days for big mortgage banks and possible mortgage/foreclosure meltdown
  • Dollar took unexpected significant move higher Friday
  • Major US indexes moving in different direction in big volume
  • Emerging markets consolidating.

Again above my pay grade to explain why all this Helter Skelter in a detailed fashion, but I know chaos when I see it.  There’s big money to be made for the traders who guess the right direction of the market. Best read of tea leaves is down.

So many folks have been long and getting more complacent each month. Something we’ve talked about before – the VIX – shows this. So the highest risk for a big move is DOWN.

Bottom LineThere is a possibility of another foreclosure/ mortgage systemic meltdown.

We have NOT fixed the #1 cause of our growing deficitsregulating the over leveraged giant shadow banksHow can any political group can claim to be concerned about deficits and not address hidden, crony, casino capitalism in our wildly over leveraged shadow banking system ?


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)
  • USO (price of oil/commodity).
  • SSO (2x what S&P does) – Tightened stop and may sell/take profit today.
  • TYH (3x tech stocks) Sold the rest of TYH at 38.8 for @ +13% gain. Sure looks like a climax run Friday afternoon. TYH is a trade not an investment. Could re enter this trade at different time. Sorry I made a post on this Friday afternoon and it looks like it did not get posted. See comments by “The Critic” entered under Friday’s blog. It may be still up on the right side. I discussed what’s happening with several of you over weekend.

Both US & EWS will be impacted if things go South.

Time for caution for both Investors and Traders. – Time to bring out the old Lost in Space robot, with all his bells and whistles and warn Danger Will Robinson Danger Danger. 95% of this call is based on the current foreclosure crisis and understanding it is beyond my pay scale.

Look for Paul R’s always enlightening comments on stocks and sectors in the comments section.

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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July 28, 2010

The 2nd Great Depression

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

-

No Repeat Depression

Two highly respected Economist have completed  a major study saying, “A Second Great Depression was averted” for the following reasons. Quote -

  • the Wall Street bailout,
  • the bank stress tests,
  • the emergency lending and asset purchases by the Federal Reserve
  • the Obama administration’s fiscal stimulus program

Without this GDP would be 6.5% lower this year and there would be 8,500,00o fewer jobs.

Most economists usual use cautious approaches in quantitative models. They forget – the panic of  banks collapsing, fed by an over hyping media would have cause a far more serious problem.

Investors411 and many of you have been beating the drums on this for 2 years, and its good finally to see a major study come out. Especially one that supports our thesis. Now besides Greenspan, Paulson, Bernanke, Geithner , etc., telling us we would have gone over the cliff, we have some academic support.

Alan Binder Princeton Prof. & former Vice Chair of Fed

Mark Zandi – Chief economist Moody’s Analytic

Smoking Hot Debate

If you’ve missed the comments section of Investors411 you’ve missed the some of the best thing this blog offers – Information and debate on stocks & politics. Right now Jsovjani & Popeye are going toe to toe. Hard to tell if they agree or agree to disagree.

Jsovjani has produced a set of statistics that show the concentration of wealth before Ronald Reagan took office of the richest 1% of Americans was @ 20% and when he left office it was @ 36%. Popeye believes that he has finally found some common ground with Jsovjani our resident “deficit hawk.” The rich getting richer coupled with the fact that President Reagan raised the deficit by over 400% makes “Ronald Reagan, economically one of the worst presidents we ever had.”

What will Jsovjani reply?

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 +0.12% up
NASDQ -0.36% down
S&P 500 -0.10% up
Russell 2000 -0.46% -

Technicals, Fundamentals & Analysis

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

Mantra for week -The Black Box/High Frequency Traders BB/HFT control the vast majority of trades.

Another typical light volume day which saw rotation (a bullish thing) out of high beta stocks into more mundane stocks. Overall things were flat.

There was one big bearish sign out there - crude oil – took a big hit right at its resistance level.

Earning continue.

Significant Indexes-

  • McClellan Oscillator (MO) fell  to +75.69 [+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. Yesterday’s close = 75.69BEARISH But, the MO fell 21+ points and major indexes were flat. Plus its 50 DMA is crossing its 200DMA, and the chart shows a series of higher lows and higher highs. Best read of tea leaves is we are now looking like the MO will drop more on flat days and get us out of overbought territory. Then rally as stocks go higher.
  • US Dollar –  The dollar  rose slightly  +0.12% yesterday [Anything over +/- @0.50 is significant.] The dollar/stocks relationship is strong – Dollar up = stocks down and visa versa. Dollar just broke a major downside support level two days ago = Bullish
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also, good proxy of China.) BDI was in free fall from a high of @4200 to 1700 . This was a huge -60% drop in 8 weeks is very bearish Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI has staged a 7 day+10% rally and is at 1869 = Bullish

Reading Tea Leaves-

The highly overbought position of US equities eased yesterday. We are just overbought now. See MO above. Another day/two of easing will give the bulls another chance to charge. There is so much bullish momentum behind the move higher, its hard to see it all stop now. At least retail investors should buy the dip. If we continue to fall out of overbought positions with stocks remaining flat – This would be a signal to go long.

However, Black Box/High Frequency Traders rule, and they may think its time to take profits from this rally. If you’re a trader what to look for (probably on the SPX daily chart) is that every time the SPX rises to a certain level it gets sold into by BB/HFT’s

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Updated over weekends Investors411 holds ONE small position in SDS at this time

Sticking with overall strategy on short ETF’s. However, Probably selling 1/2 of SDS today. Reasons stated above under MO.

EWZ (Brazil – chart on side of blog)) an ETF Investors411 owned for years is again outperforming and is a buy the dip opportunity.

GLD – (Gold) has come down off its high. But a big dip in big/above average volume is a signal to wait.

Going to try to put together YOUR Stock List with Paul R (if he has the time) before I leave for trip.

S&P 500 at 1113. Breakout point to turn Long Term Outlook to CAUTIOUSLY BULLISH is 1131

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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July 23, 2010

3:45 AM

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

Crew Team Assign

3:45 AM

This morning at 3:45 AM I dropped my wife off for the 3 day 60 mile Susan G Komen the Cancer  Cure. Thousands will be joining her. At least once a year Investors411 encourages its friends to donate to a worth cause.  Ours has been Cancer research.

So far Joyce as raised  $1,699 & her goal is $2,300. Outside of having children she feels this is this most important thing she has ever done. Some of you have already donated and if you’d like to donate see JOYCE’s Page On the right you’ll find the box to click on to donate.

“The Stupid Cancer Show”

My daughter Katie, a breast cancer survivor, has been raising funds and crusading for cancer survivors for years. Listen to her speak on the The Stupid Cancer Show this Monday 7/26 LIVE 9PM ET/6 PM PT to share her story and talk about cancer!http://bit.ly/99fJRu

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 +1.99% up
NASDQ +2.68% down
S&P 500 +2.25% down
Russell 2000 +3.73% -

Technicals, Fundamentals & Analysis

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

The Black Box/High Frequency Traders took US equities significantly higher in average volume. Typical rally day for stocks dominated by BB/HFT.

Yesterday UPS (+5.23%) announced results and many analysts saw the giant package delivery company as a catalyst for the rally. The CEO was bubbling over about growth in emerging markets and hiring lots of new employees – you guess where – in CHINA.

MSFT was up 2.87% yesterday & 0.23%

Big news – European stress test (“whitewash”) on banks is due out today.

Proosta (see comments section) has come up with 20 of the top 100 high demand stocks yesterday.

Significant Indexes-

  • McClellan Oscillator (MO) rose dramatically to +58.08 [+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. = Almost Overbought or bearish
  • US Dollar –  The dollar  fell a significant -0.94% [Anything over +/- @0.50 is significant.] The dollar/stocks relationship is strong – Dollar up = stocks down and visa versa. The Black Box traders, have used the inverse relationship of the dollar as a key part of their trading system. Despite big fall yesterday still within trading range = Neutral
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also, good proxy of China.) BDI was in free fall from a high of @4200 to 1700 . This is a huge-60% drop in 8 weeks is very bearish Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI has staged a 5 day rally and is at 1801 = bullish

Reading Tea Leaves-

All it took was a day and we are back on the cusp of the MO being overbought. Since the BDI has turned positive I’d be just a little more cautious about using short ETF’s too early. But, its clearly time to think about using those ETF’s that short major indexes. Click on POSITION at top of blog for more info.

The MO has not been above 80 since the big spring rally in April of 2009 – then it reached @ 105. In early Jan. of 2009 it did reach 120.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Updated over weekends Investors411 holds ONE position in SH at this time

Strategy – From yesterday - The same as before - If/as US major indexes become more overbought the more ETF’s that sort the market will be purchased. Starting out with SH. Then the higher above 60 the MO goes, the more SDS (200% short the S&P 500) and other even 300% short ETF’s will be used the higher the MO goes.  See POSITIONS section at top of blog for more.

Usually about a 100 point rally on the Dow translates into @ a 15+ points higher in the MO.  That would get us to about +73 on the MO today. A good place to do a little stock fishing.

Personally, this time will probably start with SDS (200% short the S&P 500)  Will add even more short ETF’s if/when MO goes above 75/80

When you buy any position its important you know when you are going to sell. In the case of SDS there will be a 5% stop/loss. If I make $ – 50% of SDS will be sold for a 5% gain and the stop loss will be moved lower as gains progress.

N.B - The following will seem contrarian to the investment strategy, but if the benchmark S&P 500 breaks out and closes above resistance level of 1100 & 1106 (109.44 high of early last week & 1105.67 an earlier high) the Long Term Outlook will change to NEUTRAL There are two more resistance levels above that, so bulls are going to have to make quite a charge to break out.

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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December 28, 2009

Market Updates – Christmas Carol

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

A Christmas Carol

Charles Dickens-A Christmas Carol-Cloth-First Edition 1843.jpg
Cover of the first edition (1843) by Charles Dickens

In the spirit of the season let me remind any of you who are opposed to the Senate version of health care about a young boy called Tiny Tim from Charles Dickens A Christmas Carol
In the not too distant future millions of Tiny Tim’s (31 million more covered)  will now be able to get health care even though they have pre existing conditions.

Progressive, like me, are fuming over Obama and the fact that this bill should be much better – but Obama’s right it is better than nothing.

Perhaps the Ebenezer Scrooge’s of the USA will prevent this, perhaps not. The Bah Humbug crowd usually tries to use the deficit as an excuse to prevent the Cratchit family and Tiny Tim from getting health care. Baloney. The nonpartisan Congressional Budget Office see this bill as revenue neutral or slightly better. Their two great fears are that someone somewhere else is getting social insurance, & it will hurt the defense budget.

It’s the second reason that should send off every alarm bell in your head .

The Pentagon budget that has exploded over 100% since 2001 (from  $296 billion in 2001 to a projected $630 billion in 2110) This does NOT include new military bases, nuclear weapons or the Iraq/Afghan war – (one to three trillion) – depending on if you use DOD or Noble Prize winner Joe Stigletz as a source). So the real figure is closer to 200+ % more of your tax money has gone to weapons over the last decade ..We are close to averaging a 20% increase in military spending annually since 2001.

We are 3% of the world’s population and already spend over 50% of the worlds weapons budget . "And perhaps most disturbing of all, the Pentagon budget increased for every year of the first decade of the 21st century, an unprecedented run that didn’t even happen in the World War II era, [the cold war} much less during Korea or Vietnam."

Perhaps Tiny Tim and the Cratchit Family will get some crumbs of health insurance.

But the real problem is the Bah Humbug military Industrial industry who like the plant Seymour in Little Shop of Horrors screams FEED ME . We shovel blood and money at Bah Humbugs and the situation keeps getting worse.

"Build it and they will come" -  The only way stop the Ebanezer’s, Seymour’s, Neocon’s or whatever you want to call those who beg for continual 20% annual increases  in the military since 2001, is to cut their budget.

A very hard thing to do. The right wing screamers that dominate the media have fear mongered hatred toward Arabs, gays, Europeans (socialists), Canadians (socialists) Mexicans, Russians, Chinese, Liberals etc. Their fear mongering fuels the military budget. Obama has also just certified nation building in Afghanistan.

You obviously can’t keep justifying the exploding military budget without new wars .  Whose next? – Iran, Pakistan, China, Yemen, Russia, Mexican or Mexican immigrants. After that those nasty socialists in Europe whose economic Union is now economically (total GDP) larger than ours.

Far fetched? I think not. 
For more on Tiny Tim/Health Care see Paul Krugman LINK

For more on Defense budget costs William Hartung LINK

Your Stocks Picks

Perhaps you want to put some of these in your holiday portfolio stockings. I do NOT recommend any but can give you a little fundamental and technical analysis . That said, some many look like pretty good buys. Remember this analysis barely skims the surface and professional investors have a big advantage because they have banks of computers and armies of people going over each investment they make. You can see the Chart by clicking on the ticker symbol. The following are stocks that got more than 1 recommendation. I’ve changed charts to 1 year charts to get a long term outlook

  • GOOG – Google – You all know the Google story – What’s not to like. Look at the chart – a steady upward trend above its 50 day moving average (blue line on chart)  It’s a bit overextended right now (too far from blue line) but when a decent buy the dip back to the "blue" occurs a buy.
  • PCLN – Priceline – My wife books our reservation on Priceline.  This chart is just what you want to see. Even back in February when everything was falling apart PCLN was moving higher. Look at the trend on the chart. A tempting buy now even though it like GOOG is overbought or too far above the "blue" line. A clear buy the dip stock
  • GS Goldman Sachs – Super connected mega shadow bank. Do these guys really own the Bush and Obama administrations? Who knows, but they certainly are smart and outperform everyone else in their sector # 2 is MS It looks like they have peaked and are starting to pull back. Congress has made some noise about "too big to fail" banks and systemic risk involved in the 2008 financial meltdown. But we all know they will yell a lot and do little.  They are falling in lighter volume – a good sign.

Tomorrow – YOUR top 3 choices

KISS & Stocks

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow +0.51% down
NASDQ +0.71% down
S&P500 +0.52% down
Russell2000- +0.49% -

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

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

Technicals, Fundamentals & Analysis

Fundamentally lots of investors/traders are changing their views to a V shaped recovery. Perhaps the most significant fundamental in this will be January’s employment report. If this turns positive (at start of the year it was -700,000 ) we will be in a sweet spot.

Another low volume rally .  Volume for decades has been the #1 confirmation factor for stocks. Since September volume has dropped and stocks have rallied. Translation less and less people/money (volume) are investing in stocks – yet they are rising.  Perhaps the best explanation is that there has been no fundamental rules changes for our financial sector. These longer term investors (I think accurately) realize we are just building another unregulated free market bubble and are seeking more secure investments.

McClellan Oscillator at +59.57 (overbought – see below) We are entering overbought territory. (See below)

A Santa Clause Rally strictly defined is the period after Christmas till 2 days into New Year, Historically S&P 500 is up 1.5% in this period since 1960

Last week’s – FEARLESS FORECAST "Up to flat weekMore up than flat. As predicted, heath care stocks led rally because congressional reforms are meager.

FEARLESS FORECAST – same as before "Up to flat week" – Historically this is an up period (Santa Clause rally) Even though we are entering overbought territory – hope of a positive employment report for Dec. & historical bullish factors should keep stocks on the up.

CAUTION – Check out how overbought we are, The higher we push over +60 the worse the situation becomes.

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

——–

Significant forecasting tools/Indexes for stock markets

The Dollar & the BDI have been temporarily eliminated. Right now how overbought we become is taking on more significance.

——-

$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at +59.57 This is an Overbought Position. = Time to start lighten up on positions. This does not mean the markets won’t move higher. I’ve set up a yearly chart of the $NYMO LINK You’ll notice that the $NYMO went all the way up to +100 in the big March rally.

It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 for a month+There has been no clear buy or sell signal for over a month.

Oversold conditions (@-60) = buy, Overbought positions (@+60) = sell The closer we get to +/- 60 the better our chances of making money with a shorter term buy/sell signal

Positions

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

These are positions I actually own

ETF’s and Trades

SELLING & BUYING

The hard part here is to be selling with the knowledge that stocks will probably move higher into the monthly employment announcement in early January.  Right now Investors 411 is a bit over 55% invested. (FXI, EWZ, MOO & UWM ) If stocks continue their move higher hope to basically cut this in 1/2 by January employment announcement.

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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December 15, 2009

Market Update – The Scream

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

The Scream

“The Scream” – by Edvard Munch

Understandably, many of you are frustrated with the direction our country is heading in . You’ve watched again as another economic bubble of unregulated capitalism burst. Last year – two bubbles – housing & finance. The collapse of Lehmann Brothers and the financial meltdown showed the world we needed some rules to govern unregulated markets.

It’s obvious that relative to the world and especially Asia (China) that the US star is falling and theirs is rising. You thought finally your fellow American’s would get it.

The health care/public option failure is especially frustrating because some good ideas came close to passing. (See Bob’s comments onside of blog – Why was there no mass organized demonstrations for a public health care plan? and earlier comments) You realize that a 5 to 10% increase in health care each year is going accelerate the already growing gap between the rich and poor in the USA.

Is Bob right? – Perhaps in America the class struggle between the rich and those that have less is over.  The rich (symbolically – shadow bankers) have won a round or two this year. It can get depressing and make you want to scream.

Certainly in China it is hopeful that you see one generation move from slave labor in rice paddies to becoming a computer programmer.  But, admittedly here the flow seems in the opposite direction.

Sometimes you win and sometimes you loose. The bottom line is three other old adages “what doesn’t kill you makes you stronger.” You learn your lesson, adapt and move ahead.  The second adage is “it could be worse Yea it could have been a lot worse -  think President Palin. Lastly “think globally and act locally” The key word here is to act on what you believe in. Sometimes that seed you plant takes time to grow

So  scream or don’t, but keep fighting for what you believe in &

Happy Hanukah

Post script – I’m sure Bob will keep on trucking.

KISS & STOCKS

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow +0.28% down
NASDQ +0.29% up
S&P500 +0.70% up
Russell2000- +1.57% -

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

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

Technicals, Fundamentals & Analysis

Running out of Oxygen – US & most world markets have been moving higher in weak, below average volume .  We’ve move up again over the last 4 days and inched out new closing highs for major US markets (all but the Russell 2000 index).

We are in moderately overbought territory (see below). Translation – we are staring to run out of buyers.

The inverse relationship between the dollar and stocks has broken down somewhat over the last two weeks. But its still there.

FEARLESS WEEKLY FORECAST Up to flat week . But be careful we are entering overbought territory (see below) and if rally continues I’ll be taking profits rather than adding to stocks.

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

——–

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 a fell a  -49 points Friday and closed at 3530. Over the last week the BDI dropped rapidly and the decline eased on Friday.  Since Mid November highs the BDI (see chart) has established a clear downward trend =   bearish signal

What it means-Since the low of Oct 2008 technically the long term chart is = Bullish. However we are now in a month long correction. Mid term trend = Bearish The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets.

——-

The Dollar is currently the #1 forecasting tool (now weakening)

$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 was fell yesterday -0.23% . Anything close to or over +/- 0.50 is significant  The dollar closed at $76.35 . Technically have broken up through the 50 day moving average resistance level and then failed to break out through the Oct/Nov high around $76,82 resistance level.  In technical terms we have created a “double top.”  The $76.82 level is now a very important line in the sand.

The whole dynamic  here seems to have changed – We now, at least for the short term, have a rising dollar

——-

$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

There’s been a dramatic change in the last 4 trading sessions. We broke out of the range (see below) and are close to  overbought/sell positions . The index closed at +40.17 This is an  Overbought Position and we are getting close to a +60 dramatically overbought  or sell signal.

From past updates – It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 There has been no clear buy or sell signal for over a month.

Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell The closer we get to +/- 60 the better our chances of making money with a shorter term buy/sell signal

Bottom Line Time to start thinking about taking profits, especially into any continued rally.

Positions

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

(again a little behind on latest moves)

We’ve had, and volume has confirmed, a quantum shift in markets. This may be temporary and it may be long term, but it necessitates major changes in positions. – looking for dollar to hold or add to gains . – This happened or was confirmed yesterday . Will wait to buy some ETF’s and stocks when McClellan Index says we are approaching overbought (@+60)


Recommended ETF’s and Trades

SELLING & BUYING

Your Comments - (See “Monitor’s” comments on side of blog – About a week  ago Investors411 sold its positions in GLD. DGP, AMZN & NVS ) – Not interested in opening any new positions right now Waiting for a clear signal from MCellan Index to commit additional capital or sell existing positions.

Right now, it sure looks like we are reaching overbought positions.  If we rally into the end of this week I’d take some more profits

Start small & Build your position – Buy the dip.

Long Term Outlook = CAUTIOUSLY BULLISH

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

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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July 22, 2009

Market Updates – The Great Tax Con Job.

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

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

Note: Last Investors411 for the week.

Health Care, Obama and Leadership

Obama

Huffington Post Photo

Does anyone really know what Obama’s heath care plan is? NO. Unlike Hillary over a decade ago he has set broad goals – he wants to save Money. Congress has come up with a slew of different plans. Perhaps this attempt at consensus building is the best way to achieve results. After all Hillary Clinton failed.

However, the best way to show leadership is simply to lead.  Congress is fighting like chickens in a hen house over health care, each individual and side protecting her/his specific interests. The powerful interest groups who want NO change are spending huge amounts of $ to shoot down reforms health care. It’s a waste of time to go on TV to defend a non existent plan that has no concrete structure.

Obama set a charismatic vision and followed though in his campaign for president. American’s back someone who leads and right now all Obama is doing in health care is following.

Stats on Tax Rates

10% on income between $0 and $8,025

15% on the income between $8,025 and $32,550;

25% on the income between $32,550 and $78,850;

28% on the income between $78,850 and $164,550;

33% on the income between $164,550 and $357,700;

35% on the income over $357,700.

15% on investment income

For single individuals – From the Fed tax tables

An interesting editorial by Tohm Hartman called The Great Tax Con Job is worth reading. One interesting point he makes is that both times we had massive tax cuts for the wealthy they ultimately lead to a period of growing over speculation and collapse.

  • Massive tax cut in 1920 from 73% to 25% led to the roaring 20′s and the Great Depression
  • A 70% to 90% tax rate from 1930 to 1980 on the uber wealthy lead to America becoming the strongest economic power on the planet.
  • A Reagan tax cut from 74% to 38%, later followed by cuts on investment income, and another 3% cut led to the biggest meltdown since the Great Depression.

There are some mitigating factors, but the bottom line is clear a culture that focuses on  giving massive breaks to the wealth does NOT prosper


STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow +0.77% down
NASDQ +0.36 % up
S&P500 +0.36% up
Russell2000 -0.33% -

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

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

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

Technicals and Fundamentals

All the major US indexes are screaming OVERBOUGHT conditions. You can only go up so many days in a row. Only the NASDQ has shown  some moderate volume behind the move higher. This increased volume acts as confirmation of the trend.

The major US indexes have all reached new closing highs, except for small caps (the Russell 2000 is almost there) This does set up a longer or mid term bullish trend for stocks.

Check out on the bottom of the charts for the major indexes ( see list on side of blog) the CMF (Chalkin MONEY FLOW) We are over 3 standard deviations away from the mean. ( the green color is above 0.3) This is about as overbought as markets gets without some kind of reversal.

Fundamentals (earnings reports) have driven this rally.  At first company’s like Intel surprised. Others followed, but now that surprise is built into stock prices. Last night AAPL (Apple Computer) hit another grand slam home run earnings report. More here


Significant forecasting tools/Indexes for stock markets

BDI The Baltic Dry Index measures the flow of goods (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . The rate of decline increased on the BDI yesterday.  We have had a series of lower lows and lower highs since early June. We have a way to do before we establish a new low (see yesterday’s update), but we definitely have a momentum change. Bears are gaining momentum

In a nut shell the BDI is

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

Here’s an ominous forecast on global trade from the Director General of the World Bank. – Pascal Lamy.

$USD - The Dollar went down and tested its major support level yesterday.  It held. Dollar ended up flat +0.04% . The last remaining support level is the June lows at @78.4. The dollar index closed at 78.90 . Breaking this support would be very bearish for the dollar and bullish for stocks.

Conclusions

The “Fearless Forecast” predicted a down week because we are overbought.  Now we are way overbought , the BDI has turned negative and the dollar stopped dropping at its support level. Technically everything is turning negative. Bears are growling

Both the dollar and the BDI are the indexes to watch. If the rate of fall in the BDI increases – take more $ off the table. No one ever went broke taking profits.

Positions

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

IFN - (India)  Sold entire position yesterday. Gain @ + 3.5% See Positions section of blog.

FAS – Perhaps the third time is the charm. Last two times (see Positions) Investors411 took defensive position we got burned. Opening a small position (2.5%) in FAS (3X short the financial sector) Overbought markets & BDI falling call for some caution.


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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