Investors 411 Blog

by Barr Jozwicki
July 15, 2012

Recession/Deficit Solutions

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

.

The Greatest Economists of the 20th Century

Agreed that you Stimulate Your way Out of a

Recession

.

.


Solutions to The Deficit

Stimulus or Austerity

(Part 1)

.

The  Outstanding Success of

The Obama Stimulus

.

.

Why Stimulus Works

&

Austerity Doesn’t

.

The Obama Stimulus cost $787 billion.

Our national debt is @ $15 trillion.

A 5.2% one time addition to our debt.

.

.

Under Obama & his Stimulus

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

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

.

Millions of jobs

created millions of taxpayers

& the GDP expanded.

Taxes paid by those with jobs

REDUCE the deficit

year after year after year…

.

Everything was working until

*The Stimulus ran out

*The Austerity/Banksta Republicans

won the House of Representatives

&

*Obama, himself, put more focus on

austerity instead of stimulus

.

.

Republican blocked virtually every

stimulus/jobs growth plan.

&

Had to be dragged kicking and screaming

for even a payroll tax cut

.

********************

.

Let’s see what happens to

the deficit

when Banksta/austerity

gain even more control.

.

.

Examples – Austerity as a Solution

The European countries in economic trouble.

Portugal, Ireland, Italy, Greece, & Spain

.’

.

Ireland’s “free market” economy was

the goal of every Banksta in America.

The Baking Industry had “captured government”

Regulators were no where to be found.

Then Something Hit the Fan

.

.

Ireland was the first country to impose

The Austerity Solution

.

The Deficit

Exploded Higher

.

Ireland Government Debt To GDP

.

Ireland’s unemployment rate exploded

from 4.6% in 2008 to 14.3% today

..

IRELAND with Austerity

A 311% INCREASE in Unemployment

A 433% INCREASE in Debt to GDP

.

In Hard Economic Times

Austerity = More Debt

..

.

More Examples

The Other 4 Troubled European Countries

who have adopted the austerity solution.

All have

Debt to GDP ratios that are still exploding higher

All  have unemployment still exploding higher

For data on these countries see this LINK

.

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

FINIS


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June 21, 2012

YOUR Stock List wins again

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

.

“The Great Latvia

Success Story”

.

.

LINK

to 1 minute 27 sec.

comedy video

.

AUSTERITY

WORKING?

.

Latvia, unlike other countries

[scroll down at link for this chart]

may have found a solution

.

Finally a country

where Tea Party styled

mandated austerity

has NOT lead to

has led to  a massive growth

in unemployment

.

Latvia’s unique solution

.

********************

.

YOUR Stock List

.

.

Paul

.

.

has published the results

of the latest

YOUR Stock List

in the comments section of the blog.

.

The YSL’s started in April & May are

both outperforming the S&P 500

.

LINK

.

Kudos

to all of you who helped

create the list and share investment

ideas in the comment section

of the blog

.

*****************


JPM & Kleptocracy

Fat Cat Bankers

.

.

An excellent and informative

debate on JPM in comment section

LINK [scroll down]

who may have taken over the spot

as head vampire squid from GS

.

.

More on this in the next

411

.

*******************

.

STOCKS.

.

.

Stimulus Works

.

FED announcement of continuing “Operation Twist” till end of year,

ECB’s $125 billion to Spain,

and rumors of more stimulus from Central Banks

is forcing

HOT MONEY

[NB -If you invest or trade the markets you must

know what "HOT MONEY" means and learn to

follow its flow]

to find a place to go

where the interest rate

isn’t near zero.

.

That place is the

Stock Market

Our Spanish 10 year bond, after several months as an accurate forecasting tool, stumbled last week.

Still  the bond rate is falling significantly this AM ( Down 3.22% to 6.53% at 8:00 EDT) = Short term Bullish

.

Spanish 10 year bond yield link

.

Longer Term Outlook

3 months+

.

NEUTRAL

.

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK & POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMMAR  ERRORS.

as head .

..



.



.



.



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June 10, 2012

Privatize Gains/Socialize losses

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

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Yogi Berra

.

Deja Vu

All Over Again

.

.

$126 Billion Spanish

Bailout

.

The US economy’s GDP

is over 10X

Larger than Spain’s.

Therefore, relatively, this is an

.

OMG massive

$1.26 Trillion Bailout

.

Ours was mere $700 billion.

.

____________

.

Banksters

..

Privatizing Gains

Socializing Risk

in Spain

.

.

When Eurozone was Introduced the regulators

allowed banks to buy unlimited amounts

of government bonds

without setting aside any equity capital”

.

Sound Familiar?

In 2004 our SEC allowed US Banks

to become massively over leveraged too.

.

Banksters didn’t care. They could

extract money from bundled loans

and profit by selling them on the

opaque derivatives market

.

_____________

.


411′s Most used image of

Banksters

The Vampire Squid

.

.

The Truth

Whose Really Getting

Bailed Out

.



Banksters & Plutocrats

across the world

get Bailed out

.

But since the derivatives

market is opaque,

who knows?

.

____________

.

Spain’s

Housing/Financial Bubble

began to pop in 2007/2008

just like the USA.

.

AUSTERITY

[Cut spending, No bailout for middle class, Raise taxes]

was introduced as the solution

the result -

Job loss, recession and

worse yet to come

.

.

Small consolation -

At least, now, the ECB

is demanding NO new

AUSTERITY

measures with this bailout

.

Spain, has already been

driven onto poverty.

Unemployment has

already gone from

8% to 24+%

.

.

Postscript

.

Obama is NOT a

Teddy Roosevelt -

A President that stood

up to Plutocrats/Banksters

.

.

However, Obama did stimulate,

cut taxes and again forced an

additional payroll tax cut.

.

Imagine if

we followed Austerity

instead of Stimulus

.

Our unemployment has NOT

exploded from 8% to 24%

.

For a Real SOLUTION

see Robert H’s

editorial/comment

.

Obviously, we should see

major worldwide stock

rallies

Monday


Finis



.


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June 8, 2012

1% get 93%

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , , ,
.
Income Inequality
.
.
“2009-2010, the top 1%
.
of US income earners captured
.
93% of the income growth”
.

.
.
.
“America has become a country
.
not “with justice for all,”
.
but rather with favoritism for the rich
,
and justice for those who can afford it
,
– so evident in the foreclosure crisis,
,
in which the big banks believed
.
that they were too big not only to fail,
.
but also to be held accountable.”
.
.
Nobel Prize Winner
.
.
.
******************
.
.
Yankee Bob’s
.

.
The Rifleman, the Virginian, Bonanza, The Big Valley or a number of other Westerns, where a small town where a small town newspaper editor, by himself would take on and defeat Big Vested interests…
.
.
.
********************
.
.
.
Please, Just do what

Ronald Reagan did & his top

economist Milton Friedman

recommends – Stimulate
.
.
LINK to Krugman editorial
.
(See Monday’s 411 for Friedman recommendation)
.
.
The Money Quote
.
.
“As many economists have pointed out,
.
America is currently suffering from
.
a classic case of
.
debt deflation:
all across the economy people are
.
trying to pay down debt by
.
slashing spending,
.
but, in so doing,
.
they are causing a depression
.
that makes their debt problems
.
even worse.”
.
.
******************
.
China’s Growth
.
.

.
.
6 Charts all showing

a slowdown

in China’s Growth

(See Link above for more)

.
Across the world

when Economic times get tough

You do NOT impose

AUSTERITY

You STIMULATE the Economy
.
Exception -

USA’s Right wing austerity dogma
.

  • Major news from China is surprise [STIMULUS] interest rate cut. Short term juice for stocks but Long term = Chinese economic slowdownBearish
  • Repeat – “411 currently uses the yield of the 10 year Spanish bond as a leading indicator of market direction – Our canary in a Coal mine. - Bond yield up= stocks down”

Past quote on

Long Term Outlook

.

“No changes in LTO considered

till Spanish bonds at least close

below at 6.25%.

.

  • Let’s have  at least a 3 to 5 days of yields remaining below 6.25% before we upgrade to NEUTRAL.
  • The ugly Fundamental reality in Europe can overwhelm Central Bank intervention/manipulation.

.

Longer Term Outlook

3 months+

.

CAUTIOUSLY BEARISH/

NEUTRAL

.

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK & POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMMAR  ERRORS.

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June 1, 2012

Jobs Report

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

..

STOCKS

.

.

Jobs, Jobs, Jobs

.

.

You can look at lots more

jobs growth charts

by using this LINK

.

The Obama stimulus

dramatically & positively altered

the jobs picture

from -800,000 to

21 months of +100,000/+200,000

.

What happened?

.

.

  • The Stimulus ran out &
  • Jobs growth flattened.
  • Republicans preaching Austerity won the 2010 elections
  • European Meltdown Grows

.

To recover from other post WW2

Recession we created MORE government jobs

The Obama Stimulus ran out

The Small Businiss/American Jobs Act

was crushed and here’s what happened

.

We Lost Government Jobs

.

.

There’s a time for cutting deficits/austerity

But NOW

The Clear and Present Danger is

Worldwide Recession/Depression

.

We pay for our Debt by selling Treasury Bonds

Our 10 year T Bond is at 1.58%

CPI(measures Inflation) is at @2.3%

In real inflation adjusted terms we are

paying down debt at @0.72%

.

Spain 6.55% Debt is a huge problem

But, thanks to our Fed, and

others across the world buying

our bonds

.

Today’s Monthly Jobs Report

.

  • Employment rate from 8.1% to 8.2%
  • Jobs numbers +69,000 – +150,000 expected
  • Horrible numbers - Much worse than expected.
  • Very bad for Obama fans because he will be blamed


________________

.

Our Canary In a Coal Mine

Stock Market(s) Barometer

.

.

The Canary may not be Dead Yet

But the yield on the 10 year Spanish bond

is rising close to the 7.00% Danger Zone.

.

Yesterday huge drop to 6.44 at open

but the yield rallied throughout day

.

Today  rates are flat – LINK

6.55% at 8:20 EDT


.

****************

.

No changes in LTO till Spanish bonds close below at least 6.25%.

.

Longer Term Outlook

3 months+

.

CAUTIOUSLY BEARISH

.

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK & POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMMAR  ERRORS.

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April 4, 2012

Eurogeddon?

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

.

Europe’s Coming Recession

.

.

Eurogeddon?

.

What worked – You saw Bernanke /Obama stimulate the USA Economy and lead the world  out of the feared “economic armageddon” of the Great Recession.

What’s not - Now we are watching European governments act, just like Republicans, introducing austerity measures way too soon and drive their economies into recession.

.

England & the EU are the

World’s Largest economic Entity

.

Therefore, It’s Recession or Possible

Eurogedden

Will Impact The World

.

___________

.

The Warning

.

.

Paul Krugman

.

Nobel Prize Winner – Paul Krugman – Has warned has warned of Europe’s impending doom in a series of editorials. The latest on 1/30, 1/31, 2/6, 2/18, 3/7 - Link Here if you’d like to read warnings

.

The Problem is European Leaders have

committed their people to

Sever Fiscal Austerity

.

Europe’s got the monetary (Introduce more liquidity) part right, but they are dramatically slashing budgets way too early.  Here’s some early GDP results.

.

Observe what’s happened in the last Year to GDP

Compare with the USA

.

United Kingdom GDP Growth Rate

Italy GDP Growth Rate

France GDP Growth Rate

United States GDP Growth Rate

You can use ANY European Country

and compare last years results with the USA.

We go up.

They at best go down slightly

At worst dramatically down

___________

.

DANGER WILL ROBINSON

DANGER DANGER

.

.

It’s Time to Bring out the old “Lost in Space Robot” with all his flashing lights, and flapping arms and warn of impending long term doom.

.

The Downward GDP Trend in Europe is CLEAR

The Upward GDP Trend in the USA is CLEAR.

Europe can drag the rest of the world down with it.

or

The US can drag Europe up with it.

.

The Solution has always been clear

to Investors411 readers

.

Before you turn the deficit hawks loose you stimulate, create jobs, and make sure the recession is behind you.

.

______________

.

Bottom Line

.

Its impossible to call the tipping point in Europe, a day, a month a year?

But its coming.



********************

.

STOCKS

.

.

Wall Street Bull and OWS Symbol

..

Insight into how Investors411 evaluates stocks, markets and trends can be found in the STRATEGY Section of the blog.

.

Headline

Eurogeddon

Caution – Figures in Below Graphic are dated.

Therefore, NOT Accurate

.

.

The First Warning signs

.

First – a graph from Zero Hedge on what’s moving stocks now

A Second Chart showing  globalized liquidity. The amount of $ Central Banks are flooding the markets with - LINK

.

  • Any meltdown (possible Eurogedden) won’t happen all at once
  • But this morning Germany – The leading Country in Europe – broke down through its support level.

.

Therefore, Our Long Long Term Bullish Bias

Becomes a bit shaky because of Europe

.

Bottom Line - The Central Banks still Rule, but the question of a deeper European recession will now get factored into stock prices. Unfortunately it looks worse than most predict.

Increased budget cuts are plunging Europe into a deeper recession.

______________

.

.

Old Faithful

The McCellan Oscillator

.

  • Our #1 technical forecasting tool, the McClellan Oscillator (MO) fell to -19.45. (for more see  STRATEGY link at top of blog and scroll down) MO is  = NEUTRAL

.

______________

.

.

Canary in a Coal Mine

.

Investors411 uses two gauges to determine how well Central Banks are doing at manipulating stocks.

  • Italian 10 year bond yield rose to the highest in a month 5.29% (8:15 AM EST) Well below the 7.00% Danger Zone but…

the Canary just Chirped.

.

**********************

.

It’s NOT the time to panic, because the Central banks will produce more liquidity if the problem gets worse.

However, China slowing down, Japan’s problems, a coming European recession are all drags on a remarkable US recovery.

Things  are NOT as long term bullish as they used to be last quarter.

.

Longer Term Outlook

3 months+

.

Still

CAUTIOUSLY BULLISH

.

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMMAR  ERRORS.


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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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December 7, 2009

One Shocked Panda BEAR

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

Shock & Awe for Bears

openingimage

The unemployment report Friday both shocked and awed Wall Street Bears and almost all economists . Even more than the startled jumping Panda. (Thanks David Fry for photo)

The dramatic drop in job losses coupled with a positive +2.8% GDP growth for the last quarter is certainly good news for every bull on Wall Street and Main St. Economic momentum is flowing in a positive direction both in the USA & especially emerging markets.

Why?

There’s good, bad, and ugly behind the positive economic news . Since, Obama’s Afghanistan policy is such a disaster (at least to those of you who have commented and Investors411 – See additional Clinton, Gates LINK [we're nation building & there for as long as it takes] and Friedman [against surge LINK ] on Talk shows over weekend) lets start out today with the good and give Obama some credit.

There are 4 major reasons why we have seemingly turned a corner. - TARP, emerging markets, printing money, and stimulus.

TARP – Bailing out Shadow Banks was started by Paulson/ Bush and continued under Geithner /Obama.  TARP is working better than almost everyone expected. Last week Bank of America announce plans to pay back $45 billion (plus interest)and losses far less than expected. See NYT. See LINK

Emerging Markets They kept emerging, especially China. (see past Investors411) They’re the locomotive and we are the caboose.

Printing Money – The Fed just kept printing trillions of dollars faster than a super market buys toilet paper. The unusual part is investors from around the world bought truck loads of that toilet paper in the form of US treasury bonds with insignificant interest rates. If/when rates go up, boy will those  investors have a huge supply of TP to whip their ____.

Stimulus - Around the world governments stimulated their economies with programs. You can make a case for Germany & China’s program being better than ours, but Obama’s stimulus (he was limited by Republican opposition) was relatively good.

Remember the old story of you can give a poor man a fish or you can teach him to fish. Well, economists have ways of measuring just how stimulative throwing money at a problem is. Does your dollar buy  even one fish or lots of fishes?

  • The Republican mantra is always cut taxes – Mark Zandi , economist from Moody’s and a McCain’s economic adviser “making all the Bush tax cuts permanent and cutting the corporate tax rate–would raise GDP by at most 37 cents for each $1 of revenue loss. ”
  • Obama’s stimulus “By contrast, increased outlays for infrastructure, aid to state and local governments and extended unemployment benefits increase GDP by between $1.41 and $1.57 for every $1 spent.”

The bipartisan Congressional Budget Office measured the whole thing and you can find more on why/what stimulus worked at LINK

Common Sense – Yes there are time tax cuts work especially targeted and in a recession.

But, when you cut taxes to a company you never know where that money is going to go – Fat bonuses for executives, a new home in Dubai (the global sex slave capital of the world), buying financials WMD’s (Warren Buffett’s term for Credit Default Swaps) or sometimes even good stuff like into research & development.

What you want to have happen is DEMAND increase for your product. The more money flows, the more demand. The reason you see sources like CNBC, right wing polls and think tanks always call for tax cuts is they control the companies or the companies are their big advertisers/sponsors.  Greed is good for me is their mantra.

KISS & STOCKS

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage percentage Volume
Dow +0.22% up
NASDQ +0.98% up
S&P500 +0.55% up
Russell2000-+2.38% -

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

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

Technicals, Fundamentals & Analysis

Economic Bears were shocked and awed at the fall in unemployment. Great news for Main Street USA, but we have a deep deep hole to climb out of.  This is mixed news for US Stocks.

The news is mixed for Wall Street, because good economic news in employment means the government/Fed will probably stimulate less. Therefore,  financial companies will no longer be able to borrow for nothing,  and their interest rates will rise sooner rather than later.  The dollar also gets stronger and those companies making more because the cheaper goods sold faster overseas will cost more – looss demand & profits.

Technically we had HUGE volume accompany a price rise. Unfortunately, for most major indexes the rally was less than a significant 1%. Stocks first went way up, then down and settled for moderate gains.

Small cap stocks, are more dependent on a recovery on Main Street did gain a significant +2.38% Bigger companies have more contracts abroad.

Fearless Forecast – Last weeks unexpected positive jobs number helped create a positive week. Investors predicted a flat to down week. Oops. This week we should be all over the place, but some solid economic fundamentals are coming into the light. This should help stocks in the long run. Once the dollar calms down (expect it to rise and gold to fall) we should improve. Flat to up week .

Now going to get a bit more technical

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 small rose +45 points yesterday and closed at 4107. Technically  the BDI broke out through its major resistance level 4291 (this year’s high) over a week ago.  The BDI has rallied about 1800 points since late September. After 16 up days in a row, 9 down days in a row & now up 3 days in a row. Multi day moves in one direction are common and the decline in rate of change usually signals a reversal.

What it means – Long term we created a higher high on the chart = Bullish. The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets. After, what looks like a technical correction we are agin moving higher.

——-

The Dollar is currently the #1 forecasting tool .

$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 rose an ENORMOUS +1.44% Friday . Anything close to or over +/- 0.50 is significant  The dollar closed at $75.59 .

The dollar’s rise did temper the rally, but the whole dynamic or fundamentals have changed. See Positions below.

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

The index closed at +23,51 This is a Slightly Overbought Position . This chart is showing we seemed to have reached a plateau. 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

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.

Today is a confirmation day for Friday’s move.  More than anything else – looking for dollar to hold or add to gains.  Will buy some ETF’s and stocks until McClellan says we are overbought (@+60)


Recommended ETF’s and Trades

SELLING

GLD – Investors411 sold all of DGP several trading days ago and 1/2 of GLD on Friday. Last entry into this position was at $92.7 .  Traders should sell the rest and longer term investors could hold onto last 1/2 position (5% of portfolio).

Gold will rise again, but for now there is just too much downside momentum. Will be back into GLD & GDP late.

NVS -The flu scare is over. Thenumber of states that have serious flu has dropped from 43 to 25. Time to take profits on last 1/2 this position. Let’s take our profits 21+%

AMZN Taking profits. Markets rallied yesterday and AMZN dropped 2.54%. Never a good sign to see NASQ rally 1% and your tech stock drop. Again, this in part, was a flu play. Why be greedy we have about a 16+% profit.

BUYING

FXI – Adding more to this positions. If Main Street is recovering faster than expected, so will China. Their currency & exports is tied to the dollar. So in one major sense, their recovery is tied, in part, to the USA. They have under performed major USA indexes recently.

IWM or UWM (an ultra fund that does basically 2x IWM) These ETF’s both track small cap stocks (Russell 2000) IF, Main Street is recovering faster than expected they should outperform the other indexes. They have under performed so far and should,like China, make up soe lost ground relative to other major US indexes.

BAC – Bank of America. They’re paying back TARP shows solid fundamental strength. (I know they are a shadow bank bad guys) Bought BAC Friday.

Start small & Build your position – Buy the dip.

Again any stock investment or ETF that doubles or triples what a normal ETF does is a short term play for traders and short term investors – NOT long term Investors .

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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September 30, 2009

Market Update – Jobs

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

Note  - Last Update for the week.

Where are the New Jobs?

Dorothy Lange’s famous photo –  Migrant Mother from Wikipedia

Right now – job cuts are declining in the USA - down @700k in January to @200+k last month. Major reasons why -

  • China India and other emerging markets keep growing and stimulus packages around the world stimulate their growth. Therefore US global companies  don’t need to lay off more workers.
  • The US government stimulus package creates jobs and cuts taxes. In a year or two the Obama or US stimulus package will run it course.
  • The Fed has injected massive amounts of capital into the system propping up the shadow financial system and keeping it from failing-thus saving jobs.
  • The automotive sector has been bailed out preventing a total collapse of jobs in the sector.

What happens when the stimulus, and cash infusions run their course. Where will the new jobs come from?

Wall Street companies are playing cut throat with each other trying to get into Emerging Markets (China #1 on the list). Labor costs are cheaper there and they have growing GDP’s. (some of this is phony accounting, but overall they far outstrip the USA in growth) So Wall Street companies will as they have in the past hire lower cost and now better educated workers from abroad. Now there is even more incentive to hire abroad because of their growing markets. It’s even cheaper for US companies to hire European workers because they don’t have to worry about health care costs.

Bottom Line –  Jobs has historically been a lagging indicator after a recession because of globalization. It sure looks like job creation is going to be worse this time than after other recessions. What’s going to happen in the long term after all the stimulus, tax cuts, money printing etc. becomes no longer sustainable?

One major  Obama/Tom Friedman’s solution is to turn alternative energy into the next tech explosion (like the internet). But, the investment, so far is way too limited and others from Germany to China are already leading the charge in this area.

Your Comments

Check out “Doggies Mom” who has a LINK to an editorial on health care by Rose Ann DeMoro and Michael Moore .

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow -0.48% up
NASDQ -0.31% up
S&P500 -0.22% up
Russell2000 -0.45% -

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

Volume rose a bit as stocks retreated. Volume was below average. No real confirmation or follow through of Monday’s rally.  Probably means all eyes are on the Jobless claims at the end of the week.

There is some clear change in overall feeling. The BDI has fallen for 4 months – although the rate of decline has slowed. This indicates China, who was buying all kinds of raw materials because they were cheap has stopped.  China was a major growth factor in leading us out of the recession. This also indicates that the US did not buy as many holiday items from abroad. Potential for a slow holiday season.

The up side fundamental is the stock market. Because it has had a phenomenal run from the lows investors may feel like spending some of those gains.

Bottom Line – Although we could move higher and Dow 10,000 is drawing investors like a magnet, there is reason for CAUTION. If we get a reasonable jobs number – under 200,000 lost jobs in September you may see a short rally.  Its starting to feel like traders will sell the rally.  Still holding on to the Long term CAUTIOUSLY BULLISH outlook

Big news for week is the jobs number for the month of Sept. coming out Friday.


——–

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) .

2388 is support now resistance level/number to watch After a short two day rally of +29 points the BDI fell yesterday -7 and closed at 2185. These are very small moves, but in the right direction.

The BDI is almost 50% off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 ) A 50% retracement from highs is a major support level. Therefore some stabilization is understandable.

What this means World trade is in trouble – lots of ships are sitting in ports empty.  To some degree, China has stopped buying raw materials and/or the US consumer is not buying as rapidly as earlier in the year. Braking a support level is significant, but 2192 (current level) is still a long way from the Dec. 2008 663 low. = Storm clouds gathering

——-

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

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

The dollar rose +0.17% yesterday to $77.12 . Its chart shows it has clearly formed a short term higher high over the last two weeks. Higher dollar usually leads to lower stock prices.

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

Positions

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

revised to reflect recent trades last weekend

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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September 11, 2009

Market Updates – Making $from the Stimulus

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

Cautious Optimism on Stimulus

Christina Romer

We’ve come back from the edge of the financial cliff, Stocks have rallied significantly, & Job loss has decreased from @700,00 a month to 216,000 last month.

“We have absolutely seen a change in trajectory,” said Christina Romer, top White House economic adviser. White House said that translated to about “one million jobs that would have been lost without government efforts

There have certainly been many different government programs along with the Fed that have change the financial picture – In its first report to Congress on the stimulus, the White House Council on Economic Advisers said the economy was improving and would have been far worse without the stimulus . LINK

Also Treasury Secretary Tim Geithner both in front of congress and on the CNBC echoed some of those achievements and future problems – LINK

One interesting point is besides these economic gains $80 billion have come back in from the loans.

Making $ off the Stimulus

Instead of editorializing on the stimulus, let’s take a look at how to trade/invest on this huge amount of cash stimulating the US and the world’s economy and make your portfolio grow. Some significant points.

  • The Chinese stimulus is over twice as large as the US relative to the GDP of each country. Their stimulus is more focused (one political party) and faster acting. We’ve already seen a far bigger move in their market than ours. This should continue. Invest in China
  • US has guaranteed the solvency of the giant “too big to fail” shadow financials. Smaller banks are not covered and getting toasted. From the best Goldman Sachs t o the worst AIG & Citi , if the government is going to guarantee your survival you have a huge advantage. Invest in too big to fail shadow financials
  • All the printing of money,taxpayer stimulus, & government loans is forcing the dollar lower. The US is a deficit nation. This forces commodities (traded in dollars) higher. Invest in commodities – Copper, Gold, energy & and energy rich countries – Brazil

Health Care

One of you sent in the a link to different views on health care from the NYT. Will post this on the comments section of the blog. This echoes a comment made by Doggie’s Mom.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow +0.84% up
NASDQ +1.15% down
S&P500 +1.04% up
Russell2000 +1.45% -

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

NASDQ continued its breakout move. Both the Dow & the S&P, joined the NASDQ  broke out to new yearly price highs yesterday. Small cap stocks (Russell 2000) broke out two days ago. – Bullish sign

Up five trading days in a row for major indexes – we’re getting a bit oversold.

This rally is very much related to the dollar dropping. According the talking heads over 1/2 of the profits of the S&P 500 come from foreign countries – so when the dollar drops their profits grow.

——–

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) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . The BDI has leveled off and started to rise over the last two weeks. Flat yesterday +01 yesterday.

Each day this looks more like a base has been formed above a key support level Longer flat bottoms and slowly moving higher is usually indication of, at least, a short term bottom-Bullish short term outlook for BDI and we have certainly recovered from the devastating lows of Dec./Jan.

The BDI is 41% off its high (early June) Before that it gained almost +170% from early April to Jun e

——-

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

The dollar dropped of the table and through its major support level three days ago and has continued to fall.  It fell -0,30% yesterday. This added drop is confirmation of the technical breakdown the day before. Dollar closed at $76.81. Its  major support level is @$77.5 . After 11 days of consecutively being up one day and down the next, the dollar has fallen 4 days in a row. Short term Bullish for most stocks

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

Bottom Line – Both the BDI & the Dollar are forecasting at least a short term rally.

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


Positions

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

Instead of waiting for that illusive 5 to 10% dip to invest nibble a little bit now. This is a dollar dropping rally. Don’t get a sugar high from it.


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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