Investors 411 Blog

by Barr Jozwicki
October 6, 2009

Market Update – Jobs Jobs Jobs.

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

Jobs,Jobs, Jobs

Obama

To paraphrase James Carvill’s famous line “Its all about the jobs stupid.”  (he used the word economy) Obama’s mistakes-

  • Obama’s took on Larry Summers and the Wall Street crew who dominate his economic team.
  • Underestimating just how huge the economic meltdown was.
  • Realizing that because of globalization and superior growth in emerging markets major US companies are going to hire first abroad instead of here. (see past Investors411)

What can Obama do to solve this problem? The stimulus and tax cuts help, but two noted economic experts offer solutions.

  • Robert ReichLINK – 4 steps – Use funds to bail out average people through states, 1 year payroll tax holiday on first 20k, Job tax credit for small business, & directly loan to small business (bypass big banks)_
  • Bob KutnerLINK – Makes the case for increased deficit spending for job creation. Bob looks at the most recent poll that show 53% believe unemployment is the #1 concern of Americans vs 27% who fear the deficit.

Bottom Line – Deficits are bad even crippling. This year the deficit will be about 11% of GDP. In World War 2 deficits maxed out at 29% of GDP. If Democrats want to stop an  implosion in the next election they have to create more jobs NOW.

Unfortunately from Nobel Prize winners from Krugman to Stiglitz , Obama has ignored the progressive side of his party.

Your Comments

#1) Mama Jama brings ups Thursday’s Tom Friedman column again LINK – about how radical and anti Obama the right has become in America.  This is alien for lots of us who don’t even consider Obama a liberal, but are also worried about the fact that no one seems to be standing up against this divisive hatred.

One of the latest examples was members of the right carrying guns to a health care town hall meeting.  Can you imagine the outrage if blacks and Hispanics carried guns to a Sarah Palin speech.

#2) Don’t worry about a 700 point dip, unless someone bombs Iran . Both the Obama administration and the Fed are flooding the economy with money forcing the dollar down. This in turn makes American exports cheaper and imports less expensive. As long as this money flows Wall Street will do well. Add to this less transparency and no real regulations on shadow financial institutions.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow +1.18% down
NASDQ +0.98% down
S&P500 +1.32% down
Russell2000 +1.88% -

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 fell as markets rose. Therefore, our #1 confirmation factor is NOT giving us a bullish sign.

US markets reacted positively to news that the service sector (ISM number) was back above 50%.

Rumor of the AM is that group of countries (Gulf oil producers) have been meeting to replace dollar as standard currency according to CNBC – lead story. Denied by Saudi’s – Should push dollar lower and stocks higher this AM.

Earning season officially starts tomorrow with Alcoa (AA) reporting Wednesday.  Any company that is going to have top line growth (increased profits from sales instead of cost cuts) is what Wall St. is looking for.

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI is @ 47% off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI rose only +5 points yesterday and closed the day at 2362 . After a sharp turn higher it looks like we are headed back down.  Longer term (since the June high) the rate of decline has softened, but its still going in the wrong direction.

——-

$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 fell -0.46% yesterday.

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

S&P 500, SPX , our #1 position (20% of portfolio) is down 4 to 5% from highs – This is really a holding position instead of cash.

China, FXI, our #2 position (18% of portfolio) is bit less than 10% down from highs. (very long term investors should see this dip as a buying opportunity) So far this looks like China just moved too high to fast.

Brazil, EWZ , our #3 position  (12% of portfolio) has broken out to a new high. Like a huge group of investors now looking to buy the dip – so look at 3% pullback as a dip.

Gold, GLD, our #4 position (10% of portfolio) is close to a new all time high.

Financials XLF – (5% of portfolio) Selling remainder today -reason,  weak volume behind two day rally

S Korea EWY – (5% of portfolio) Up about 7% and @ 4% from highs.

Traders

– Instead of ETF’s – Investors411 does have a position in NVS Novartis (10% of portfolio) a swine flue play. Up 7 to 8% – We will exit this when flu season hits.

One of you recommended MVIS  Microvision- Missed a great buy the dip opportunity because of business trip Thursday & Friday – Looking to buy next dip.

Sold our AAPL position for a +7% gain. Would buy another 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 8, 2009

Market Updates – Just Stocks

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

JUST STOCKS

Bear Face Photo

Economics – What’s happening — We have moved away from the edge of the economic cliff and now folks are realizing that the world’s economy is in trouble. Its possible that Brazil, China and India will lead us out of the mess created mostly by the USA. Time magazine’s Justin Fox has an interesting article on what has been the mantra of Investors411  here

The Baltic Dry Sea Index is a critical gauge of the world’s economy (trade) and is has broken support levels. This is NOT good news. (see below) Can’t over emphasize this chart enough!

I’ve mentioned before, the problems with Larry Summers and Obama’s economic plan .  One major problem is that the stimulus plan is back end loaded and we need the help now. We’ve only spent 10% of the stimulus so far. A lot of states would have gone under and employment would have rocketed if there was no stimulus, but the new jobs were NOT shovel ready.

Until we rebuild our financial system its hard to see any long term recovery.  So far all we’ve done is talk about it.

However, the major problem is in underestimating just how huge  the economic mess really is. See Overview & Strategy Section of blog and lots of past daily updates.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index Percentage % Volume
Dow -1.94% flat
NASDQ -2.31 % up
S&P500 -1.97% flat
Russell2000 -1.98% -

Investors411 record – 4 1/2 years of beating benchmark S&P 500 (see results click  6/25 & scroll down)

Technicals and Fundamentals

Another major meltdown in below average volume. The S&P has now fallen back down through two major support levels – its 50 & 200 day moving average. As stated before the line in the sand is 875 support level (see past updates and look at chart on side of blog) SPX at 881.

As predicted at the beginning of the week we are already challenging the major support level.

Earning season starts as Alcoa (AA) reports at the close of US markets today.

The lack of volume still troubling factor. – One things for sure-money on the sidelines is staying here. Its hard to make a long term forecast with volume as a confirming factor .

Significant forecasting tools/Indexes for stock markets

Note - Repeated statements in brown.

These are important forecasting tolls, but secondary to volume .

BDI The Baltic Dry Index measures the flow of goods (world trade) . BDI fell sharply again on Monday & Tuesday. Trade has broken through its support level and that decline was confirmed by another drop Tuesday. WARNING The breakdown in trade is very significant to any worldwide recovery. BEARS RULE

$USD - The Dollar rose +0.34 % yesterday The strong inverse correlation between the dollar and stocks has existed for many moons. Dollar up = markets down. Dollar closed at $80.72 and has been trading for  a month between @$81+yesterday= and $79+. So the dollar nearing the top of its consolidation range. Long term Bearish pattern for Dollar ( bullish for stocks ) that is consolidating pattern now ( neutral but turning bearish )

WTIC Oil dropped another -1.75% yesterday. and 11% over last week. (see chart) The 5 day fall has been significant and has NOT been accompanied by a significant rise in the dollar. (dollar works inversely to oil prices) What oil markets seem to be saying is demand is weak out there and the world’s economic picture is less bright than traders thought. = More Bearish news for stocks

—–

Back to CAUTIOUSLY BEARISH outlook. This is in anticipation of a further breakdown of the BDI and S&P 500 .   Both of these have happened.

Our Positions (For more see Positions section of Investors 411-scroll down)

Monday/Tuesday’s  Recommendation -  take some $ (1/3) off the table in China (FXI ).

The Hedge – So far the QLD has lost -10.39% and the SDS has gained +10.88% Check out Positions section on top of blog = total gain +0.49%

I plan to buy back all recommended foreign ETF’s – just hopefully at a lower level. Perhaps when  S&P dips to support level @875. Perhaps lower

Bottom Line – The BDI has rolled over. This is important.  Investors 411 has closed a lot of long positions over the last month or two. The last being 1/3 of China investment. The short term may not look good, but it should also son be another buy the dip opportunity.  We will use the BDI turning back higher as a reentry point.

More tomorrow

Long Term Outlook = CAUTIOUSLY BEARISH

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

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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July 6, 2009

Market Updates – Positions, Predictions, & Problems

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

140+ Dead in Demonstrations in China

China Riots

You’ll here a lot more about Iran, but the Muslim minority has demonstrated or rioted (depends on which side your on as to which term is correct) in a far western Chinese Provence. The BBC headline story here

China owns a huge part of our debt and we need her cheaper goods. Will condemnation here be as great as Iran or hypocritically silent?

Biden – We “Misread”  Problems

Biden

Photos – Huffington post

Since last fall Investors411 has continuously repeated “The problem in the financial sector is far far far far far bigger than fist imagined. Impact of this mess is going to take years to resolve.” See positions section of blog.

Investors411 continually cited a significant group of economic thinkers who clearly demonstrated just how bad the economic problem was. Investors411 also criticized Larry Summers and the economic crew of the Obama administration.

The only good news is they finally woke up and smelled the coffee . Tax cuts good, Stimulus plan good but way too back ended (only 10% spent so far) The same problems that led to the financial meltdown are still out there. Yes, we’ve moved back from the edge of the cliff and everyone starting with Paulson, Bernanke and Geithner do deserve some credit by throwing the car they were driving into reverse as we approached the cliff.

However Greenspan, expanding deficits, wars, housing and unregulated capitalism have created a massive economic black hole. Short term stimulus usually worked as a solution in the past. The problem here, besides the holes massive depth, is the accumulated debt was already humongous. Biden’s admonition of misreading economic crisis here

For in depth previous prediction and solutions see Overview section of blog.

Iran (Week 4)

Huffington Post’s Nico Pitney’s daily blogging on events here

There has been one group of cleric’s come out in support of demonstrators and he wonders what’s happened to the head religious leader in Iraq – Sistani. He supported democracy for Iraq, but has remained silent on Iran

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index Percentage % Volume
Dow -2.63% down
NASDQ -2.67 % down
S&P500 -2.91% flat
Russell2000 -3.91% -

Investors411 record – 4 1/2 years of beating benchmark S&P 500 (see results at 6/25-scrolldown)

Technicals and Fundamentals

A huge price decline, but again in weak declining volume Friday. How markets react to news is just behind Volume as a prediction tool. In this case it was the Unemployment figures that sparked the fall are lagging indicators.  Therefore, the huge downside reaction is way more than expected = Bearish.

The lack of volume still troubling factor. – One things for sure-money on the sidelines is staying here. Its hard to make a long term forecast with volume as a confirming factor. Weakly forecast below.

Earnings season begins next week. Historically, this week companies that are not going to do well warn – this is bearish

Oil futures are way down this AM trading at $63.88 at 7:15 EST. = Bearish

Significant forecasting tools/Indexes for stock markets

Note - Repeated statements in brown.

These are important forecasting tolls, but secondary to volume .

BDI The Baltic Dry Index measures the flow of goods (world trade) . BDI fell sharply Friday.  This index is winding up like a spring, within a consolidation pattern and is close to a downside breakout (3452 is breakdown point and index closed at 3529)  See chart  Watch out! Long term Bullish rise from bottom, but coiling right now for next move . Potential bearish breakdown possible this week

$USD - The Dollar rose 0.74 % . The strong inverse correlation between the dollar and stocks has existed for many moons. Market. Dollar up = markets down. That’s just what happened Friday Long term Bearish pattern for Dollar that is consolidating pattern now (neutral) = Bullish for stocks

Fearless Weekly Forecast – Last week Broke Investors411 winning streak of forecasts for the week  as US markets fell on some bad consumers confidence and unemployment data. Momentum is with the Bears as we enter earning season. Check out all the red bearish signs above.

The S&P resistance level (@875 & SPX now at 896 )  should at least get challenged, especially in the beginning of the week. Watch BDI. Forecast – Bears Rule

Back to CAUTIOUSLY BEARISH outlook. This is in anticipation of a further breakdown of the BDI and S&P 500.

NB – Volume has confirmed nothing. So confidence in above predictions is a bit shaky.

Our Positions . -  China, Brazil, & India (FXI, IFN & EWZ )(Partial list)

Unlike the USA that has seen two economic bubbles burst housing and financials these growing countries have been relatively less impacted. The decline in trade with US is going to impact all 3.  China and India have positive GDP’s predicted for the year and resource rich Brazil’s GDP is predicted to be close to zero. The World Bank predictes a -2.9% loss of GDP for the rest of the world..predicts a-2.9% loss of GDP for the rest of the world.. For more see Positions section of Investors 411.

Recommendations – Investors has a very big position FXI a very small position in IFN , and a closed position in EWZ .  Again see Positions section of blog. Short term traders might want to take some profits in FIX and both traders and investors  should look at possible “buy the dips” opportunities that should emerge this week or next in IFN & EWZ .

More tomorrow


Long Term Outlook = CAUTIOUSLY BEARISH

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

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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April 23, 2009

Market Update – Results from Smack Down

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

What’s Up? – Your Smack Down List- 20, count them, 20 smack downs – you guys are angry – The HULK is on his way; The New Your Times – a phenomenal resource – Charts, graphs and data. Consumer Rights Legislation; Barney Battles Banks; David Brooks on Obamanomics; Tomorrow - Torture


     Your  SMACK DOWN LIST

Investor’s411 is sending THE HULK (Movie version above) to Smack Down the following people, institutions, & concepts that you selected. Instead of 10 Smack Downs YOU came up with 20. To see full list of comments & reasoning scroll down on this link.

  1. Alan Greenspan
  2. Hit & run Drivers
  3. Hezbollah
  4. Hamas
  5. Inflating intelligence
  6. Larry Summers
  7. Ahmadinejad
  8. Bush
  9. Cheney
  10. Rumsfeld
  11. Tortures
  12. Junk mail
  13. trashing the environment
  14. Former Senator Coleman
  15. Minnesota going without representation
  16. MN Governor Pawlenty
  17. those who cut education
  18. those who cut health care
  19. N. Dakota sate legislature
  20. those who discriminate

For those of you who missed out on Smack Down comments or thought we missed something - tomorrow’s #1 topic is TORTURE. There will be another Smack Down List next month.

AP photo Scott Appelwhite 

Consumer Rights Legislation

Barney Frank is leading the major consumer rights bill through congress . You can imagine how hard the Shadow Banks & Credit Card Companies are fighting this bill to aid consumers. Obama meeting with big banks today. NYT story

Say what you want about, Barney Frank, but he like Elizabeth Warren is one of the heroes fighting the big money Shadow Banks. No bank(s) owns Barney Frank The Republicans and many Democrats owned by the big banks killed his efforts for consumers last year. Check out his long but enlightening “Great Economic Hole” Speech of 2/4/09

Why the NYT’s is a Phenomenal Resource

* NYT has a graph and interactive chart telling Where Your $ Bailout Money Has Gone 

* NYT has another chart/outline on Our Government’s Total Bailout Tab

* NYT has another interactive chart on Pay at the Top (CEO’s)

Obamanomics

Obama’s landmark economic speech is reviewed by conservative NYT columnist David Brooks Also see April 15th blog post on Obama’s speech.

Tomorrow TORTURE

This is the #1 topic among the blogs. Want to lead the discussion? Send in your comments below.


STOCKS


Index Percentage % Volume
Dow -1.04% down
NASDQ +0.i4% down
S&P500 -0.77% down
Russell2000 +0.14% -

 

Technicals & Fundamentals

Repeat from yesterday -Forget all about the major indexes - What happens to the shadow banks (financials) absolutely dominates stock  trading.

Earning season continues – Markets have already factored in most of the bad news into this earnings reports. Apple and Ebay did hit earnings home runs. UPS struck out

XLF - The ETF that tracks financials (mostly shadow banks) rose +0.91% in decreased volume.  Financials have lead this rally and if they  collapse so will almost all other sectors (see Positions section of blog on XLF) This leading index is the one to watch.

Short Term Outlook -(again a repeat) Second technical chink in the bulls armor appeared Monday – another big volume sell off.  Volume, the #1 confirmation factor of stock price moves. But Tuesday’s bigger volume (for FLX) means we are one again going up on the roller coaster and gives hopes to bulls.

Too early to make a call on which way this may break, but short term traders should pay attention. The Danger signs to watch for - more big price/volume decline  and/or stocks moving lower on no news or good news. Especially in the XLF

Reading the Tea Leaves - Look for a pull back this week or before the governments “Stress Test” becomes public May 4th. 

Long Term Outlook = CAUTIOUSLY BEARISH

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

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING! 

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April 12, 2009

Market Updates – Two Face

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

Two faced/Batman – “Par-tay” – Mad money, big money, fast money vs. the long term economic viability of USA and world. Special weekend Update on short term traders vs. long term investors & taxpayers. Danger Will Robinson Danger, Danger.

 

1990 DC comic (Neil Adams – pencil)

Two Face 

Two Face is often thought of one of Batman’s most infamous villains (see clip) A man of two faces – one a former crusading District Attorney, the other a wacko super villain.

One major mantra of this blog for weeks has been the infamous Shadow Banks/Institutions and their future for both our country and the stock markets.

As predicted (see Updates of last few weeks) the Shadow Institutions exploded higher  (XLF +15.45%) and Wall Street (@+ 3,5%) soared on Friday. Why not, taxpayers not bond or share holders are picking up the bill for shadow institutions trillion dollar robbery and our government is allowing them to crawl back into the shadows of less transparency/accounting. 

One face to this rally is that if you want to be a short term trader - there is “Fast Money, Big Money, Mad Money” to be made  NOW!  Par-tay! So, the two faced writer of this Investment blog would tell any trader ride the wave – make the money

But as a long term investor or a tax payer – if you are spending trillions to bail out big banks, allowing them to run in the shadows &  keeping their too big to fail status - there is going to another even more catastrophic bubble bursting in the future. Danger Will Robinson Danger Danger

“Even at the cratered Citigroup, a technical analyst was moved to write a report last month urging his peers to stop living in “denial” and recognize that we are witnessing the end of “25 to 30 years worth of excess.”  writes Frank Rich in today’s NYT

Rich has his own two faced dilemma – No one is better faced to make this change to a new economy than Barack Obama and  Obama has paradoxically chosen a Dr. Strangelove “the last person to serve as an inspiring role model for alternative values would have been Summers.”  to lead us out the economic meltdown we face. 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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April 7, 2009

Market Updates – How Bad is the Economy?

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

How bad is the economy? One photo says it all. IMF -toxic debt = @$4 trillionThe Good – Hopes are up since the Inauguration, The Bad – Unemployment numbers/comparison chart. The Ugly – Larry Summers the Clinton’s cheerleader for deregulating banks and a huge conflict of interest

How Bad is the Economy?

bad-times

 

Thanks to one of you who sent this in with caption

CATS ARE SO DRAMATIC

photo credit – somebody called terrance who sent it to lennel.t- lennel.moi-nonpl.us/?p=807

 

The Good

A NYT/CBS Poll finds more optimism about the country since the inauguration. Folks approve of the way Obama is handling the economy. Headline NYT story here

The Bad

Friday’s Four Bad Bears chart got 20 million Google hits  according to a Monday editorial. You got the chart on Investors411 Friday AM.

Behavior economics is important. If so many folks (potential investors) are looking at the long term bear charts –  you  should be concerned. (Click on 4/3 on calender at top of blog to see chart again).

Here’s another chart you are not going to like. From Justin Fox at Time magazine. Titled: Job Losses Are Now a LOT Worse Than the 81 82 Recession

jobloss32009

The brown line is the current recession job loss.

The Ugly

Larry Summers who along with Republicans was a huge cheerleader (Treasury Secretary under Clinton) for the deregulation of banks.  He is the economic  mover and shaker for the Obama administration.  Summers received hundreds of thousands in speaking fees 2008 from TARP recipients (shadow banks.)

If you count previous years Summers has made millions from shadow banks/institutions.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

STOCKS

Index Percentage % Volume
Dow -0.52% down
NASDQ -0.93% down
S&P500 -0.837% down
Russell2000 -1.88% -

-

Technicals & Fundamentals

 Markets basically consolidated and loss a little ground as volume fell. = technically short term bullish 

Baltic Dry (Sea) Index - (see chart link on side of blog)  Measures flow of goods/trade and is a leading economic indicator.

Since 3/10 the BDI has fallen each day and yesterday was again  no exception. Another @1.3%  Total loss from high more than 30%.  (sorry I’ve messed up a few points on the exact percentage of fall in previous blogs) How many days in a row can an index fall?  The rate of change (fall) has slowed a little. Perhaps a positive.

Reading the Tea Leaves -  As long as  Shadow Banks/Institutions are going to get bailed out by taxpayers instead of bond/stock holders then the rally is on. That seems to be the direction Geithner Summers & Bernanke are headed. Trillions in wealth is changing hands.  

Forget all the other chatter, this massive transfer of wealth to shadow banks, and allowing them to be less transparent is what is holding up US stock markets. 

If your just a dumb taxpayer you have plenty to worry about because it sure looks like your getting robbed.

IMF Report Banks toxic debt could hit 4 trillion dollars. News like this is not bullish


Long Term Outlook CAUTIOUSLY BEARISH

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

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING! 

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March 24, 2009

Market Update – Masters of the Universe

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

Below is your very own collection of photos of the men who have privatized the profits and socialized the risk.  The Masters of the Universe who have rescued the dishonest and  greedy banks, kept the financial system afloat,  and created an explosive rally on Wall Street by moving in the shadows and stripping away financial transparency. Of course that’s just how they helped create the financial meltdown in the first place.

The Masters of the Universe

 

Timothy Geithner Lawrence Summers  

Henry Paulson

(above photos – Tim Geithner, Larry Summers, Hank Paulson)

“To the Moon Alice”

was Ralph Kramdon’s (John Herbert “Jackie” Gleason Jr.) famous line.  That’s just where the stock market is now going. See technicals and fundamentals below.

Masters of the Universe

was , of course, was the term author Tom Wolfe used in to describe all  the greed, arrogance, and shadow deals that personified Wall Street in the 1980′s. Since Obama’s took office his boys (Summer’s & Geithner), like Paulson before them, have become the personification of Wolf’s term.

Nobel Prize winner Paul Krugman  in an editorial entitled “Zombie Financial Ideas” states “ Every plan we’ve heard from Treasury amounts to the same thing — an attempt to socialize the losses while privatizing the gains.”

Arianna Huffington In her editorial pleads with Obama to take the “steering wheel out  of Geithner’s hands.”  She chronicles the war within the Obama administration between Axelrod and Geithner/Summers over AIG, Wall Street bonuses and just who is going to pay to fix the worldwide financial problem. Right now the fixer sure looks like YOU (the taxpayer) your children and your chldren’s children. 

John Bogel (legendary founder of Vanguard) - This AM on CNBC – The solution gets the government back in the shadow banking business

The solution, brings the world’s financial system back from the brink and ignites a Wall Street rally lead by the financials that scammed the world.  Probably later rather than sooner ordinary folks are going to realize how big the bill will be. 

A whole lot more on this later and since we’re all in this together you can lead the conversation by  submitting YOUR editorial/comments at the bottom of the blog.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

 

Stocks

-

Index Percentage % Volume
Dow +6.84% flat
NASDQ +6.76% down
S&P500 +7.08% down
Russell2000 +8.40% -

-

Technicals & Fundamentals

XLF (ETF) the beaten up financial sector (institutions full of toxic,over leveraged debt) continues to lead this rally – up an enormous +16.4% yesterday. 

Big rally, again with little volume. Volume was above average. Volume, the #1 confirmation factor did not confirm the rally.  This signals that the market is full for traders and the long term investors are sitting on the sidelines.

Still Critical to all this in that major major 741 support level on the S&P 500. The SPX (see chart at side of blog) ended the day at 822.  Technically the SPX broke through two significant resistance levels (the 50 day moving average & the 804 Jan. low).

Reading the Tea Leaves - Exactly the same as early last week - Allowing for less transparent accounting is fundamentally going to help those corrupt banks and ripple positively through out  the markets. As mentioned before we’ve recently had +20 and +28% rallies and the current bear market rally has reached over 21% on the benchmark S&P 500  

Bottom Line - Again the same as last week. Ride the wave   Psychologically, the most likely senerio is a dip after a large gain that greedy traders (caution there is a big difference between traders and long term investors) will buy into. Volume did NOT confirmed yesterday rally. 

Fundamentally three factors have acted like dropping nukes on the bear’s forest. Spring has sprung and the bombed out bears seem to be moving back to their cage and hibernation. 

  1. The Fed flooding the markets with cash
  2. The growing political will to remove mark to market accounting
  3. The Masters of the Universe running Obama’s economic policy

Long Term Outlook = CAUTIOUSLY BEARISH

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

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

 

 



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