Investors 411 Blog

by Barr Jozwicki
August 3, 2011

Awakening

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

Last Post for Week

Arab Awakening

Investors411 has covered many different points of views of the Arab Spring or Arab Awakening

Often the fear mongering Islamophobia of the Murdoch/American based media was contrasted with how much like us arabs are in just wanting freedom and better living standards.

Tom Friedman, in the NYT, has an especially relevant editorial, especially in light of Syria’s major attempted crack down against democracy. The money quote –

I still believe that the democratic impulse by all these Arab peoples to throw off their dictators is heroic and hugely positive.

YOUR Comments

4 of you have debated if corporations should be allowed periodic tax holidays to repatriate foreign earnings. The majority view seems to be that loop holds should be closed and/or taxes reuced rather than the “once evey 5 year holidays that cut 85% of the tax. “

Add YOUR view on this, stocks and other subjects in Investor’s411 comments section.

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KISS & Stocks

(Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Index Percentage Volume
Dow -2.19% up
NASDQ -2.75% up
S&P 500 -2.56% up
Russell 2000 -3.26% -

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Technicals, Fundamentals & Analysis

Shorter Term Outlook.

day/days/week

  • Massive meltdown in big time volume. Benchmark S&P down 8 days in a row and less than 0.50% away from breaking through major support level – this year’s low.
  • Mea CulpaI should have had a better insight into yesterday’s meltdown.  I’ve instituted a longer term Outlook call for the US economy as bearish, made the May 20th call, but my timing was poor.
  • What the bond market is saying – Economic Weakness, low bond rates, Debt deal stinks. – From Seeking Alpha’s Cullen Roache
  • Like always, after a major move on one day the next confirms or deies the move. All that has to happen for confirmation is holding onto most of the losses. Actually we, have had a series of high volume losses over the last 8 days get confirmed and that’s bearish.
  • Two of our most successful technical forecasting tools listed below -
  • The McClellan Oscillator (MO) chart fell to to -88.61(-30 somewhat oversold, -60 oversold, -90 OMG oversold). MO just 1 point away from OMG Oversold levels. Only 5 times in three years has the MO gone lower. (@-135+ was the lowest in May 2010 -after QE 1 ended and before QE 2 was introduced)  So it could get worse. However Current LevelBullish
  • $USD The Dollar rose again +0.34% yesterday (+/- 0.50 is a significant move and the dollar is usually a contrarian indicator) Technically we are sitting near bottom of a trading range. A minor two day move higher. Overall = Neutral
  • Reading The Tea Leaves - I’ve mentioned DeMark Indicators before. He has a nine day indicator that says US markets should at least take a break today (this would be the 9th down day in a row for S&P). Also the volume looks like its reaching climax sell off levels (when taken as a whole over 8 days) and the MO is almost at OMG levels.  All this shows a bottom approaching, but their is some downside wiggle room between a -89 MO & -135 MO (see explanation above)
  • Never Forget its is High Frequency Traders (This group is made up of high net worth individuals and entities) that now account for the vast majority of trading. You’re average investor has left a long time ago. Another $32.2 billion of less wealthy traders left mutual funds last week. (see yesterday’s update)

Longer Term Outlook

weeks, month, months

  • Repeat – Some serious damage has been done to the US political structure as a functioning body. Even though we didn’t default everyone now realizes that there are a sizable number  of US politicians who are willing to hold the US economy hostage to their ideological beliefs.
  • Repeat – For Main Street USA this means uncertainty. This will be devastating.  The debt crisis deal will cost jobs rather than create them. If you contract the money supply in the USA it means less jobs.  Investors411 mantra - How do you fix any deficit without jobs?
  • May 20th forecast still stands. The recent Washington debt crisis debacle has focused everyone on cutting the money supply.  Simple math – The less money that’s out there = less jobs = greater chance the “Great Recession” returns. European debt and emerging market’s inflation fears add to this. Quantitative Easing (QE #1 & 2 plus stimulus kept our economic heads (especially the stock market) above water.
  • JP Morgan seems to have recently overtaken Goldman Sachs as the #1 prognosticator out there and their chief economist says –

“FISCAL POLICY WILL CUT OUR 2.7% 2012 GDP FORECAST TO SUB 1%”

Until the Fed comes up with QE #3 or some other liquidity measure, stocks and especially the US economy are beginning to look like a double dip recession.

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Paul’s Corner Extra

This past week we looked at evaluating the market using Bollinger Bands (BB). Briefly if a stock is above the middle of the band good, if below the middle of the band bad.

I use a product called EdgeRater each evening to count the number of stocks in the S&P 1500 that are above the middle of their Bollinger Band or below the middle of their band. Last evening the results were shocking. Only 7% of stocks closed with a %B above 0.5. (Above the middle of their BB) Even more impressive 50% of the stocks in the S&P 1500 closed below the lower BB.

This shows an extremely over sold market. Numbers comparable to the flash crash and the ripping 08 down turn.

Barr likes to use the MO for market evaluation. Yesterday the S&P 1500 had a MO of -133, All Securities Index -80, NYSE -88, and the Amex -60. The MO summation index is pointing straight down and needs to bottom and start pointing up before is really safe to play. If you wish to bottom fish, good luck.

Oh for those of you who really don’t believe in chart reading, indicators and spending the $60 a month that I do for HGSI, July 27 HGSI gave a strong exit signal for the market.

My friend Ron Brown from HGSI sums it up nicely this morning:

“the markets are extremely oversold, but on the other hand, we have not yet seen a washout day where there is heavy selling at the open and the market reverses intraday to form a hammer. If you step in front of this moving train, make sure you know where you’re getting out if the balance does not materialize.”

So what’s the market going to do today, is this a new morning in America? Let’s load up ThinkOrSwim………here we go folks another day of fun!

Remember, you are responsible for your investment decisions, and I am not. Please do your diligence, and please take ownership for your actions because I‘m sure not going to.

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Current Positions

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

NLYAnnaly Capital Mgt. Ultra high dividend stock – It’s been shaky, but so far NLY has held up reasonably well through current stock market slide.

In  my personal portfolio I still have a Put position to protect NLY. (strike price $17.00 for 3rd Friday in Sept)

GLD(Long Gold ETF) Bought at 157.1 last week. (see last weeks blogs and comments section) –  Getting way too over extended above its 50 day moving average.  Have put stop in at 157.15. Yesterday up 2.41%.

If you’re a short term trader, you probably should take your profits in a rally for GLD.  Longer term investors probably should wait for better dip to buy opportunity.

Disclaimer - Personally I own  a group of dividend stocks including NLY. I have placed puts on one ETF of a major index and a couple of dividend stocks. I buy everything in the hypothetical Investors411 portfolio. I own some TZA & SDS (ETF’s that double and triple short the market) as hedges.

Mea Culpa – Bad move yesterday to remove some short positions.

JS in the comment section has used the term ”insurance” to describe the way ”Puts” are used protect long term investments. – email me if you want to know more or post a question in the comments section.

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Long Term Outlook (for US Economy)

BEARISH

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

_________________

Long Term Outlook (for US stocks)

NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

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December 2, 2010

Home Run’s & Strike Outs

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

Thomas Friedman

Tom Friedman Pulitzer Prize winning NYT Editorialist

The Strike Out

The Date – June 29th 2005

The Editorial - The End of the Rainbow – Ireland

Ireland adopted an unbelievably lowest corporate tax rate of 12.5%, America’s shadow banking and casino capitalism (AKA free markets). Tom does an Irish jig for joy over what he sees as a bright  future. Tiny Ireland now needs a gigantic EU bailout and austerity to just survive

The Home Run

The Date – December 1st 2010

The EditorialFrom WickiChinaChina

What the Chinese officials on their way to world economic domination would be saying about our self destructive government and media if WikiLeaks. At first I laughed then it was just sad. A sample  -

There is a willful self-destructiveness in the air here as if America has all the time and money in the world for petty politics. They fight over things like — we are not making this up — how and where an airport security officer can touch them. They are fighting — we are happy to report — over the latest nuclear arms reduction treaty with Russia. It seems as if the Republicans are so interested in weakening President Obama that they are going to scuttle a treaty that would have fostered closer U.S.-Russian cooperation on issues like Iran. And since anything that brings Russia and America closer could end up isolating us, we are grateful…

Well worth reading and passing on to your friends,

START

Strategic Arms Reduction Treaty (Part 2)

YOUR CommentsYankee Bob is back and you can read his full comments by linking to yesterday’s blog. Here’s how he starts

There was nothing heroic about Ronald Reagan. He declared war on the government and did much to land us in this deregulated un-unionized social welfare state for the rich and corporations. Beyond the petty politics he was a murderer. He gave funding ,training, aid and comfort and the green light to Death Squads all over Latin America. He condoned torture and murder without due process to further his political agenda…

Jim J concludes

I understand that the joint Chief of Staffs all support the new START treaty. What happened to Republican patriotism?

Paul R on START

I don’t recall who recently said it, but when asked about rep support for START his comments were “sure, but we need to modernize the military first”. “Military” Republican stimulus plan

START – Part 3 (tomorrow)

Stocks

Investors411 tries to keep it basic.

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 +2.27% up
NASDQ +2.05% down
S&P +2.16% down
Russell 2000 +2.22% -

-

Technicals, Fundamentals & Analysis

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

World Stocks - December has historically been the best or outstanding month for stocks.

USA – Today is confirmation day for yesterday’s rally. If stocks can come close to holding onto their gains or improve on them the rally gets confirmed. This more often than not means our newly born bull will continue to grow. The big news is still Friday’s jobs report. Built in are expectations of improvement.

Europe - Early in the day there was hyped news that the US Treasury was going to help Europe with its problems – later it was denied.

Emerging marketsEEM the ETF for emerging markets was up +2.87% yesterday. Good news especially for long term investors is that emerging markets outperformed the major US indexes. USO – (oil ETF) another rally leader +3.22% UCO (leveraged ETF 2x oil +6.20%) When energy prices move up it often not only reflects economic expansion in USA, but increasingly emerging markets.

Significant Shorter Term Forecasting Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar fell significantly again -0.61% yesterday. Dollar was over extended to up side and one day rebound is not yet a trend = Bearish/Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets,&  exporting countries]Rate fell slightly -0.14% yesterday. Trend down but its leveled off = Bearish/Neutral
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] rose to -15.90 Plenty of room for action up or down. = Neutral

Reading The Tea Leaves -

The “Good News” from yesterday was - Trend exhaustion  -49 on the MO shows we are technically reaching a point where there are fewer and fewer sellers out there.

Congratulations to several of you who recognized how over sold markets were getting and took the risk by buying the dip on Tuesday.

Ideally you’d like the MO over -60 but The Critic (see comments section of yesterday’s blog) is right – generally – the lower the MO goes the better your chances are for catching an oversold bounce and a more successful longer term trade. Her statement from comments section -

“So I buy when the MO is at -50. There’s much more room from -50 to +100 than -50 to -100. The odds may not be perfect, but they are in my favor.”

Also -The McClellan Oscillator (MO) and other forecasting tools are far more related to broader Indexes or ETF’s than individual stocks. Example - Paul R points out how over extended both DECK & IMAX are right now in the comments section.

How you play the MO and other  forecasting tools depends on your level of risk. The Critic uses leveraged ETF’s (EWM, SSO, UCO & TYH) as part of her portfolio and although she has NOT announced it in the comments section she has done quite well. TYH was up +6.53% yesterday. If she bought near the previous day’s low the total gain was +10% She also has a diversified portfolio of long term assets and uses YOUR Stock List.

Direxion and ProShares are the two companies that offer leveraged ETF’s. See POSITIONS section for blog for links. Obviously something that’s leveraged 2x is less risky than most 3x leveraged funds.

Bottom Line – As I stated in the comments section – This big a move off a retest of a major support level. It usually indicates that the rally will continue. (This Retest = Price moves down to support level,  remains above the support level for a period of days (9 days), then falls back down and retests strength of the support level. It held. Then, in one day stocks moved higher than the higher of the previous 9 days – A breakout. = Bullish

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).

Current ETF Positions. These are, hopefully,  longer term positions

  • EEM - (Emerging Markets ETF)
  • UWM - (2x small cap stocks ETF) This is now up over +7% since it was bought @ 10 days ago. Once a leveraged ETF goes up 5+ % I usually sell 1/2 or put a tight trailing stop on that 1/2 of @2% on it each day. I’ll do this today.

From YesterdayThis means at least a short term oversold bounce. And what a bounce it was.

Long Term Investors - Mea Culpa – I like the odds to be more in our favor before making major long term investment. So I did NOT put out a clear BUY signal. However realize if you can tolerate the risk -60 on the MO is NOT a line in the sand and like The Critic you don’t have to wait.

THE PURPOSE OF INVESTORS411 IS TO EDUCATE YOU ON HOW TO USE SOME BASIC FORECASTING TOOL AND ACT ACCORDINGLY. Stock Markets are moving faster than ever before and by the time I get the information out it sometimes has gone stale. Also I’m NOT watching stocks move all day and sometimes ignore markets entirely. THEREFORE, USE INVESTORS411 AS AN EDUCATIONAL TOOL - If you have a problem I will answer your email ASAP.

Investors – A -15 on the MO still gives us some wiggle room. Considering UCO and more UWM on a dip today. This is a higher risk trade/investment.

Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including “YOUR Stock List.” -

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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November 19, 2010

Overdrive Goes Over Top

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

Welcome to the Resistance - Investors411

A blog that promotes transparency in democracy & capitalism, and beating the results of the S&P 500

Overdrive Interactive Wins

Overdrive won TWO awards last night at the Massachusetts. Innovation & Technology Exchange. The People’s Choice Award that lots of you voted on. Thanks!

Many members of the company get this blog and they are the ones who provide the tech support to keep Investors411 blog alive.   This year’s award might be posted here by the time Investors411 is published. Overdrive is a smaller company (50+) going up against giant competitors.

Both my wife and I deeply appreciate your vote, support, or work you do for our son’s company.

California Wakes Up

Congratulations to the state of California. A major win for Democracy. Instead of having a committee of politicians drawing up politically gerrymandered  districts the state will have ordinary citizens do it.

Why Obama’s Message is Blocked

Tom Friedman has an excellent editorial on what’s wrong with American media -Too Good To Check

Fox news started an unsubstantiated false rumor that Obama’s trip to India would cost us taxpayer’s $200 million a day and he was to be accompanied by 34 naval ships. This story was spread by members of congress, networks, and every right wing outlet. One Journalist alone, Anderson Cooper, checked out the facts.

A few outlets admitted their mistake but that was at least 1/100 of the time they spent bashing Obama. We even got chain emails bashing Obama on this.

This is probably why more people believe in the lie that the India, Indonesia & G20 trip cost the American tax payers billions than know Obama cut your taxes in the Stimulus bill.

Democracy dies when we vote on misinformed lies.

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 +1.57% up
NASDQ +1.55% up
S&P +1.54% up
Russell 2000 +1.85% -

Technicals, Fundamentals & Analysis

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

US Stock Markets -

Yesterday Investors411 used the Wall Street term Dead Cat Bounce with a “?” It sure looks like the cats were wearing helmets yesterday. Question is – Can they get through today?

funny-cat

Stocks rallied in the first hour and held onto their gains all day = Bullish

Big news of yesterday is the GM IPO= +3.61% Historically after the first few days IPO’s fall. Then they establish a base and move with the bulls or bears.

Major story of day will hurt stocks. China raising interest rates again to keep economy from growing too fast. The rate hike was expected (big part of reason stocks moved late last and early this week), but the amount - 50 basis points and the timing today are probably not expected by investors = BEARISH

Significant Shorter Term Forecasting Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar reverse direction and fell significantly yesterday. Fell back to what was its resistance and is now called a support level. For stocks = Neutral/Bullish
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets,&  exporting countries]Fell  another  -1.10% yesterday. Major support recently broken, but rate of decline keeps decreasing = Bearish/Neutral
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] fell dramatically out of oversold territory to -30.60 = Neutral
  • 10 Year Treasury Bond (TNX) [Bonds compete with stocks for Investors. Rising TNX also signals inflation. Rising yields bad for stocks] Fell throughout the day but moved =1.33% higher For stocks = Neutral/Bearish

Reading The Tea Leaves -

The Forecasting indexes have changed to mostly Neutral & its the confirmation day after  big rally. China news is going to hurt.

From yesterday in brownThree paths in descending order of preference.

  • Yes the bottom -TJX (Target) had a great earnings report and outlook. Oversold markets & 50DMA support levels hold. GM IPO energizes markets
  • We’re in for an acceptable 5 to 10% consolidation after a nine week bull run with a S&P support level of 1130. (SPX now at 1179)
  • A double dip recession is out there and Investors will soon realize the horror as foreclosures rise, Europe falls apart

The problem here is – if you combine choices the more bearish choices #s 2 & 3, are larger than #1.

The GM deal with a potential strong Christmas season and QE2′s print & dump could swing an oversold market. – It did. Today is a confirmation day for yesterday’s big rally but the China news is going to hurt.

  • Stocks remain flat or go higher = confirmation & good
  • Stocks loose up to 1/2 their previous days gains = fair
  • Stocks loose more than 1/2 the gain = bad
  • Stocks loose all gains or more = duck and cover

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).

  • EEM – (Emerging Markets ETF)

Short term Traders. – See no clear advantage to a trade today, although momentum is with the bulls.

Investors. [From yesterday in brown] The MO goes below -60 buying becomes a much better option. Twice in the last 3 years the MO has reached -130. So you could loose out especially if there is a double dip recession. So I started small and nibbled on a little EEM (emerging market ETF) A  position at 45.28 Willing to accept a 7 or 8% loss on this. If we keep going lower I’m going to add some more EEM and country specific ETF’s on dips. (See POSITIONS Section of blog.)

Investors411 main strategy is to “buy the dip” in a positively trending market. When panic is in the street we buy.

I think the chances of a double dip recession are remote, but a flatline US economy coupled with (right now over heated) growing emerging markets is more possible.

Long Term Outlook has been changed back to CAUTIOUSLY BULLISH from NEUTRAL. It will remain there unless the major US indexes fall back below their 50 day moving averages of pice (see charts on top right of blog) CAUTION – We are on the cusp of change so Long Term Outlook might flip flop for a while.

Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including “YOUR Stock List.” -

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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October 26, 2010

Deja Vu All Over Again

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

Elections

Part 2

Let’s start today with a fun video from Babelgum entitled Elect Willfully Ignorant (Thanks to HG for the heads up on this video)

“Deja Vu All over Again”Yogi Berra

“There’s a sucker born every minute” -PT Barnum

  • Remember the right wing fear mongered us the Iraq war was aslam dunk Saddam had WMD’s, it was going to be a cake walk, the war would pay for is itself and you were NOT a patriot if you believed otherwise.
  • Remember the shadow banks said no worrieswe are the best and brightest, we are not over leveraged, we don’t cheat, capitalism can regulate itself.
  • Remember when in 2000 the right wing cut taxes and went to war no problems” cutting taxes (especially for the rich) and war would lead to jobs growth. The wealthy would not invest abroad or in derivatves, big companies wouldn’t eat smaller ones cutting jobs, and outsourcing of good jobs would never happen.

All proved to be fabrications, We are now stuck with an endless war, too big to fail (they got that way by over leveraging) shadow banks dominating, huge deficits growing, almost a world wide economic collapse and American jobs that have disappeared.

What happened was a case of rebranding, hidden money, and astute marketing. Right wingers or the rich oligarchy realized that since they had caused this catastrophe of debt, wars, job loss & crony capitalism they needed a new brand. Hence the Tea Party or as Tom Friedman branded them the Tea Kettlers.

The Kettlers blew off steam. They yelled, screamed, and fear mongered. They had a huge TV network as backing.  Literally everything was shouted down in a web of fear and accusations.

They pumped up the fear just like before the Iraq invasion and the PT Barnum “suckers” fell for it again and again and again. Just like  Yogi Berra says – “deja vu all over again.”

Tomorrow Part 3 –  just the facts.


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 +0.20% up
NASDQ +0.46% up
S&P +0.21% up
Russell 2000 +0.63% -

Technicals, Fundamentals & Analysis

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

US Stock Markets -

The dollar went down – so it should be no surprise to Investors411 readers -US stocks went up.

All eyes are on the dollar 24/7 and which way the dollar moves out of its consolidating range (see past updates) will determine the fate of stocks.

One very important piece of news – Treasuries had a TIPS  auction (Treasury Inflation Protected Securities) and for the first time securities had a NEGATIVE yield. What’s all this mean? Investors who bought this 5 year bond think HYPER INFLATION is on the way

The Critic mentioned the “Golden Cross” (The 50 DMA crosses the 200DMA on chart) for two of the major US indexes. This is indeed a long term bullish sign and stocks are usually higher 6 months from now.  The Critic quoted a figure of 63% of the time.

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar fell an almost insignificant -0.45% yesterday. Dollar currently moving sideways within a range (see below) Trend for stocks = Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Rose a minor +0.77% yesterday. BDI now consolidating after bull run that began in June. Longer term Pattern= Bullish/Neutral
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Rose slightly to +4.48% yesterday. Lot of room to move both higher and lower. Location= NEUTRAL

Reading Tea Leaves.

The Dollar War continues. Dollar bears moved prices lower, and the tracking ETF for the dollar UUP ended the day at 22.37

From past Investors411 -“Any move in UUP above 22.7 resistance is trouble for stocks. Any move below 22.18 support level is good for stocks. A breakout of either the support or resistance level will tell you who wins the dollar war. UUP at 22.47″

For three days in a row the dollar has started lower and rallied. Clearly there is a strong support level building.

The fact that our Fed is about to embark on QE2 (see past updates) has already been called indirect currency manipulation or pushing the dollar lower by the Germans.

In the long term its easy to be a dollar bear and therefore a stock bull. You can also understand why folks are worried about hyper inflation.

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)
  • SSO (2x what S&P does)

From yesterday – “Not making any specific move until dollar breaks out of its range. I would look at a breakout higher for the dollar, and a corresponding fall in stocks and the MO to oversold as a buying opportunity for long term investors.”

Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including “YOUR Stock List.”

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!


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October 13, 2010

Innovation & Solutions

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

Tom Friedman

Energy Innovation/Solutions

“Welcome to Tea Party America. Think small and carry a big ego.”

Tom Friedman in his latest NYT editorial is endorsing an Obama idea of “a plan to set up eight innovation hubs to solve the eight biggest energy problems in the world.” Obama is asking  for $25 million (“NOT billion) to set up each Energy Innovation Hubs.”

Nobel Prize winning Energy Secretary Steven Chu - “get Nobel Prize winners in physics working side by side with engineers” — not to produce an academic paper but “to solve a problem in a way that will actually be deployed” and do it much faster than the traditional academic model of everyone working in their own silo.

But in Tea Party America you scream, intimidate, cut taxes for the wealthy, promote wars and believe that this snake oil will somehow eliminate future deficits. So “Energy Innovation Hubs” are out of the question.

There’s NO “5 year funding for the 8 Innovation hubs.” totaling $1 billion. Ironically tiny Singapore invested a billion alone in biomedical research. (One reason why EWS is such a good investment)  All the funding our  ”Tea Party” bullied congress could mannage is $22 million for 3 hubs for 1 year.

In Tea Party America science tied to innovating business technology comes in behind screaming, promoting creationism, showing anger, tax cuts for the rich, fear mongering and intimidation. (see – I do read all your comments on the blog)

Solutions & Google

  • Kudos to Google for investing 37.5% of the initial costs in a S5 billion in a wind farm off the Jersey coast.
  • The world’s largest wind farm opened off the English coast last month and on Tuesday Denmark opened another giant wind farm. Denmark gets 20% of its power from wind.
  • Cape Cod billion dollar off shore wind project a big step closer.
  • “Wind could drive 20% of world’s power needs by 2030 with China in the lead.”


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 +0.09% up
NASDQ +o.65% up
S&P +0.38% up
Russell 2000 +0.37% -

Technicals, Fundamentals & Analysis

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

US Stock Markets -

Let’s see what happens today with tech giant INTC that reported earnings last night. Stock futures are climbing on INTC & CSX earnings

Yesterday was all about the QE 2. (see yesterday’s investors411) In the AM a Fed governor said maybe not so much quantitative easing money – stocks dropped. But later the publishing of Fed minutes of their meeting said full steam ahead.  So stocks rallied

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar fell -o.10% yesterday.  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] Rose slightly +0.89% yesterday 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 slightly to +17.71. Still lots of room to move higher or lower. Location= NEUTRAL

Reading Tea Leaves.

There are many indicators that technicians use to measure if a market is overbought. A good number of these say stocks are reaching those levels.

One specifically that concerns me a bit is how far many of the leading emerging markets are above their 50 day moving averages. TUR (Turkey) & EZA(South Africa) are overextended and others that have been started to dip or flatten – EWA (Australia) EIOD (Indonesia) EWY (S. Korea) EWS (Singapore) For a full list see POSITIONS section of blog.  (Check POSITION section for more accurate data.

These secondary emerging markets are leading the world out of recession or at least trying to.

Over extended is over extended. But, a pullback is also a buy the dip opportunity is possibility. It’s not ideal buy because you’d like a lower MO & even though you’ve had a dip – you’d really like a bigger one.

Overall – the same bullish pattern dominates.

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)
  • TYH (3x tech stocks) Bought on the dip at 34.22. (A trade not a long term investment and therefore will sell 1/2 at 5% profit.)

Investors – Both USO & EWS are in consolidation patterns after a big move higher. Like ETF’s listed above, for those that can tolerate risk, possibly a change to nibble on a dip.

Check out Paul R’s always enlightening updates on individual stocks and sectors in the comments sections.

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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September 29, 2010

No Respect

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

Getting No respect – Rodney Dangerfield

No Respect

Yesterday 53 Democrats voted to end the filibuster on a bill that would give tax breaks to companies that brought outsourced jobs back to the USA. It failed to get the required 60 votes to break the filibuster.

It’s remarkable that almost NO media outlet is giving this important jobs bill coverage “aimed at small manufacturers, including a payroll tax exemption for companies that move jobs to the U.S. Ill. Senator Dick Durbin was the bill’s chief sponsor. What’s more important than Jobs, Jobs Jobs for the American economy and workers?

The TEA Kettle Movement

What is getting all the news instead of substance is the “Tea Kettle Movement”  (Tea Party) That’s just “letting off steam.” The above & following quote is from NYT’s Pulitzer prize winning Tom Friedman

“The Tea Kettle movement can’t have a positive impact on the country because it has both misdiagnosed America’s main problem and hasn’t even offered a credible solution for the problem it has identified.”

Bottom LineScreams and anger gets the attention in our corporate controlled media instead of substance and jobs. Is Friedman right in his assessment?

Investors411 is going an break for a few days, the comments section will be open. Also next week Investors will be shutting down Thursday and Friday. Happy trading.

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 +0.43% up
NASDQ +0.41% up
S&P +0.65% up
Russell 2000 +1.07% -

-

Technicals, Fundamentals & Analysis

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

Mantra for September - ”The Black Box/High Frequency Traders BB/HFT control the majority of trades. CNBC’s Jim Cramer -”BB/HFT make up 80% of trades.

US Markets -

Stocks rallied moderately in increased volume. The NSDQ’s volume was even above average. But average volume is @30% less than this time last year.  Lack of volume shows that the retail investor has all but vanished and financial manipulators are in control.

One of those manipulators is our FED that again used the POMO to push money into the economy yesterday. Perhaps this served as a reminder to investors that the FED is ready to “do whatever it takes” to insure economic health, even if inflation is the end result of all this money flowing into markets.

Markets moved higher on some worse than expected consumer confidence news.  Higher stocks on bad news is bullish.

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar fell  -0.41% yesterday. After sharp two week fall some sort of consolidation is to be expected. Looks like we have had a very short consolidation.  Longer term trend for stocks = Bullish
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rose a tiny +2.16% yesterday.  An 8 week bull run, then a two week fall, now pushing higher. Could be return to bullish trend. Another day or two of positive gains would turn this index’s trend bullish But for now = Neutral
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.]   Rose to +14.96. Still lots of room to move higher or lower. Location= NEUTRAL

Reading Tea Leaves

The vast majority of stocks/ETF’s move with the markets. Here’s what to look for while Investors411 is on hiatus. The comments section is still open.

  • Same guidelines on the MO. But we are no where near overbought. so still room for bulls to run.
  • Check out the movements on the dollar. If bears continue to rule stocks will go up. However if this fall turns into a crash & burn we are all in trouble.
  • For rally – Benchmark S&P 500 has resistance at 1170 and major resistance at 1220. For reversal support level around 1130. We’ve already tested this level and its held.
  • The bulls are running right now.

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) 2% trailing stop loss on 50% of position/ 4% trailing stop/loss on the rest.
  • USO (price of oil/commodity).
  • SSO (2x what S&P does- this ETF is more a trade that may turn into an investment) I now have a 2%trailing stop on 1/2 this trade and a 4% on the rest.
  • TYH (3X technology) 2% trailing stop on this ETF. for today.

Obviously choosing just one or two stocks to invest in has lots of risk. Example AAPL drop at open yesterday (see comments section of blog) or GMCR 10+% drop in after hours trading.

Each YOUR Stock List’s had over a dozen choices.  Diversity is a key word in investing. So a less risky investment would be 1/2 or more of a group of stocks.  This also is exactly what an ETF does.

Your can make great gains as we did with IMAX earlier this year (up 65+% at high), but its safer to hold ten stocks, even if they are more volitive or high growth stocks that you folks seem to choose for YOUR stock list.

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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March 3, 2010

A Deep Dark Hole

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

Penryn will debut in some 20 versions: Intel boss Paul Otellini shows the 'Extreme Waffleboard' edition which can be used to provide music for Rolf Harris songs

Paul Otellini – Intel CEO with new billion $ China Factory

US Employment – A Deep Dark Whole

Today in the NYT Tom Friedman has an interesting article on US competitiveness and an interview with and an interview with Intel CEO – Paul Otellini – who is opening a new billion dollar plant in China in October.  Freedman/Otellini try to sell their reasons this plant and future plants will go abroad and they make a few decent points.  But, let’s not kid ourselves, globalization, gives emerging markets huge advantages over the US. Besides tax breaks why do US companies like Intel build plants & create jobs in emerging markets.

  • There are already plants here and emerging markets are growing over twice as fast as us. It beneficial to have a plant near faster growing markets where few exist.
  • Cost for engineers (workers) in China is about 75% less and 35% less in Germany than the US.
  • Labor costs to build the factory (usually the #1 cost in construction) are significantly less in emerging markets.
  • There are no health care costs in China and a universal health care in othe indutrialized democracies – In the USA health care over 17% of GDP while other indutrialzed democracies are between 5 & 10%.

Solution – One area we should all agree on is increasing funding for the Research Tax Credit. From today’s San Jose (Silicon Valley) Mercury News – “What’s really needed is to increase the value of the credit, and to make it permanent, as President Barack Obama proposed in his 2010-11 budget.”

This will NOT solve the problem. Those 4 bullet points are very significant to the profit bottom line. But its a step in the right direction toward getting us out of a deep dark unemployment hole.

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 +0.02% up
NASDQ +0.32% up
S&P 500 +0.23% up
Russell 2000- +0.88% -

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

Technicals, Fundamentals & Analysis

See PositionsStrategy , and Overview for changes made over weekend. (No changes this weekend)

A bigger rally collapsed in the last 1/2 hour of trading. Volume was up, but only the NASDQ was above average. Longer term rallies are usually lead by the NASDQ & small cap stocks (Russell 2000)  These two indexes have taken over market leadership in the last few weeks.

Most foreign indexes are higher overnight and this AM. The fundamentals behind this are probably the fact that Greece has approved budget cuts demanded by European Union (really Germany) for a loan,

But, and its a big BUT the broad New York stock exchange is now in oversold territory according to our McClellan Oscillator.  This is not your parents buy and hold forever stock markets more and more economic bubbles have burst or are forming.  So right now, even though momentum is with the bulls, its time to start cashing in on some of your profits. The more oversold we get the more you sell.  See positions below.

Significant Indexes

  • McClellan Index rose to +62.51 yesterday We are now over +60 or Oversold territory. Time to seriously consider selling into any rallies.

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) - These are positions I actually own

The mistake made was not buying enough long positions when markets got oversold last month or at -60 on the McClellan Oscillator.  Right now in Wall Street terms its time to start taking money off the table.

  • recently bought (added to) EWZ (Brazil) - considering selling into any rally today or at open
  • 1/2 of MOO (agriculture ETF), - Sold at 44.55 for +5% gain
  • The remainder of THY (ETF that does 3X what techs do)Sold into rally yesterday at 143.50 for +15% gain
  • remainder of EWZ – Will sell into larger rally
  • remainder MOO – Will sell into larger rally
  • FXI (China) – Will sell into a larger rally
  • IMAX – Still holding on (rallied 4+% yesterday)

ETFs because of their size and diversity are more prone to follow the broad NY Stock Exchange’s McClellan Oscillator.  Individual stocks less so, but most will.  Of course in the past few years there have been times the NYMO has reached over 100.  This is why you sell in moderation and not all at once. If we get up to area’s close to 100 Investors411 will start using ETF’s that short the market.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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December 3, 2009

Will Anyone Praise Obama?

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

Will Any of YOU Defend Obama?

Obama Jobs Summit

huffington post phot

Check out the last 4 comments on the right side of the Blog starting with Bob Sadinsky’s – “Republican Lite” Besides someone else would have done worse (McCain & Palin) is there anyone out there who will sing Obama’s praise?

D. pointed out Tom Friedman’s we need nation building at home not Afghanistan  -  LINK Popeye does damn with faint praise – Afghanistan speech was a brilliant political move for Obama & Abby Gold reminds us what’s happened in Afghanistan to invaders for the last 100 years.

One of you privately sent me an email of someone very significant who praised Obama on Afghanistan – Mike Huckabee LINK Huckabee was the leading Republican candidate for president. Unfortunately, he’s toast as a candidate. He granted clemency to the guy who killed the 4 cops sitting in a Washington cafe.

Huckabee might not have  been your political cup of tea, but he was a decent guy who, like Obama made overtures to fellow American’s who disagreed with him. The Republican’s leading alternative is probably Sarah Palin – God help us.

So here’s some Obama good news from me besides he gives eloquent speeches – Bank of America is repaying $45 billion of its TARP loan with interest, the economy is clearly stronger as measured by GDP (in part due to stimulus package) and the rate of job loss is declining.

Remember Larry Wilkerson’s words from yesterday’s Update -

“If you are a praying person, he {Obama} needs your prayers and support. If you are not, he needs your support. Because all of us Americans put him where he is–and I do not mean by votes. We–all of us–let George W. Bush and Richard B. Cheney set us up. Moreover, we all contributed to creating the perilous fiscal state that is now a more dangerous threat to our country than any terrorist could ever hope to be”

KISS & STOCKS

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow -0.18% down
NASDQ +0.42% down
S&P500 +0.03% down
Russell2000 +1.17% -

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, Fundamentals & Analysis

The dollar rose a modest +0.34% and this seemed to keep a lid on a growing desire for stocks to rally.  Were in December so I guess you can call it a Santa Clause rally led by internet retailers like recommended AMZN (at new high)

Bernanke’s confirmation hearing goes in front of congress today. No matter what you feel about the guy, if he does not get confirmed it will hurt stocks.

Jobs # for November on Friday.


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 rose +82 points yesterday and closed at 3836. Technically  the BDI broke out through its major resistance level 4291 (this year’s high) over a week ago.  The BDI has rallied about 1700 points since late September. After 16 up days in a row, 9 down days in a row & down through the former resistance/now support level 0f 4291 . This is a chart that usually gives off signals – the rate of decline was slowing and yesterday turned.

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. Recent price drop-Nothing to panic about yet

——-

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  +0.30% yesterday . Anything close to or over +/- 0.50 is significant  The dollar closed at $74.64

——-

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

The index closed at +25.24 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

This section need to be updated – Sold 8% (24 to 16 % position in portfolio) of FXI and all of DGP. Taking profits was a mistake and bought back all of DGP (Double gold) & 1/2 of FXI.  This all happened because yours truly got spooked over the Dubai crisis.

Recommended ETF’s

Gold (GLD & DGP) – (recommended positions) is also at a new high. Warning – this ETF is starting to go parabolic (up too far too fast) Perhaps we have reached the top of the parabola. If  we have another day or two of volume increase and major price move (above 1%) we will probably get at least a short term hit. Long term holders – the fundamentals are still good. Traders and shorter term investors keep a close on this growing parabola. Time to take some profits – now or in next few days (depending on escalation of price & volume)  Sell into the parabola

MOO – Our new agriculture ETF is also at a new yearly high and on a breakout run.  Each of the recommended ETF (except anything that is 2x or 3x a sector or country) is hopefully a long term position.  This stock is fundamentally aided by the growing middle classes of India and China eating better and a falling dollar.

EWZ (Brazil) – Again at a new high.

FXI – Overall excellent for the year, but lagging right now and within a few percentage points of new high,

NVS -(A stock, not an ETF) Our swine flu play – we had a nice run with this stock now up over 20% – It is a solid company, but it was mainly a swine flu play.  Our town is getting out shots on the 7th.   We already took 1/2 the profits on NVS and will take the rest in any slight rally. The scare is diminishing. This stock had a big volume decline yesterday. Looks like the momentum players are heading for the exits.

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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November 23, 2009

Market Update – The Terminator

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

Celebrities will Save Us – NOT

Last weekend we were fortunate enough to see Pirate Radio . Before the movie, a promotion for Glenn Beck came on featuring him crying, screaming & on his knees in front of a theater audience. This evangelical performance was to be broadcasted over the next few months in theaters nationally. God help us.

Poor Arnold “the terminator” Swartzenegger – the celebrity Californian’s elected to save their state. He couldn’t and next to Michigan, California has the highest unemployment in the country. Like Palin or Obama (see past updates) America’s fixation with celebrity status and Beck tears, screaming or getting on your knees, will save nothing. “The terminator’s” problem is he couldn’t save Californians from their own greed and governance.

  • Prop 13 limited tax increases and erased a $4 billion tax surplus in a few years.
  • Property taxes were based on when you bought your property. So a property bought decades ago pays far less in taxes than an exactly similar property bought today.
  • You need a 2/3 vote of the legislature to change any taxes
  • Californians voted for things like costly regulations limiting pollutants because so many were dying from filthy exhaust and waste.
  • The “Free market” capitalism  mantra dominated California and unregulated companies like Enron were allowed to rape the state.

EW in the comments section of the blog, seems to suggests who will save us from ourselves .  One example – We spend trillions in foreign nation building wars, yet keep cutting taxes.  Our system of governance isn’t working. It’s being overwhelmed.

Tom Friedman on the Charlie Rose show  articulates the problem. You should see the video LINK But here’s a list of some of his main points that we need to overcome

  • Money in Politics
  • Gerrymandering political precincts
  • Cable TV fracturing & empowering extremes
  • Internet (both good and bad) but also empowers extremes
  • Permanent presidential campaigns
  • A globalized business community that is AWOL on major issues.

EW like Tom Friedman seems to believe “we need better citizens… not leadership.” China is producing better solutions than we are. As Tom Friedman’s grammy puts it -  “A great power that only produces sub optimal solutions will no longer remain a great power.”

KISS & STOCKS

Keep It Simple Stupid

For those of you whose eyes gloss over in the stock section I’ve tried to KISS it today, but I left a little in for those who want the deeper analysis

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow -0.14% down
NASDQ -0.50% down
S&P500 -0.32% down
Russell2000 -0.17%
-

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, Fundamentals & Analysis

Basically we had another  the dollar rose so stocks fell day.

Volume decreased and was well below average.  This is surprising on an options expiration Friday. What this tells us. – There is no money coming in from the sidelines – Its certainly more than beginning to look like a whole lot of investors are NOT going to get back into the market. Long Term this is understandable and a bearish for markets The rally in stocks is based on the dollar falling – when that runs out we have a problem

However, the Dow was down over 100 points below where it closed and rallied into the end of the day.  Why?

It’s Thanksgiving week and historically stocks rise on this shortened week. (best guess 7 or 8 out of last ten years) Monday’s have been good to stocks since Sept (again @80%% of the time)  The rally was simply short term traders getting in front of what they expect to be a good week.

Big news for week is the shopping numbers fro Black Friday & the unemployment #’s for the week.

Congress is loosing patience with the Fed & Geithner - LINK – This could negatively impact stocks, but most likely in December.

FEARLESS FORECAST – 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 has broken out to new yearly high

The BDI fell a significant -155 points yesterday and closed at 4507. The up 16 days in a row streak has been broken . Technically it broke out through its major resistance level 4291 (this year’s high)  The BDI has rallied about 2300 + points since late September.

The BDI is starting to go PARABOLIC – starting to move up too far too fast-inevitable result is a crash and burn.  We seem to be at the top of the parabola. DANGER for Bulls

Going Parabolic is one of the easiest technical forecasts to predict. Investor’s411 called this reversal to the day.

What it means – Long term we created a higher high on the chart = Bullish. Short term we are on the way down = 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 .

$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  +0.43% Friday. The dollar closed at $75.61 .  The dollar is in a narrowing trading range between $75 & $76.

——-

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

It is a short term indicator and no t to be used for major trends.  Traders and short term investors should find this oscillator very useful.  There are dozens of similar forecasting tools, but the McC Index is clear, simple, and right now pretty accurate. The more oversold we get the better the odds are the market will rebound and visa versa on overbought.

The index closed at -29.78 This indicates stocks are somewhat  oversold .

Key to chart – Zero  is roughly  neutral and roughly when you approach to @ +60 you are overbought and approaching-60 you are oversold . Buy at oversold and sell at overbought. Nothing is absolute in this chart. In fact using the moving averages as a central point is better than using zero. Nothing is absolute about the minus or plus 60 number either.

Oversold conditions = buy, Overbought positions = sell

Positions

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

I did get a chance to do some editing in the Positions Section of the blog.

Long Term Outlook - We are on the cusp of change between CAUTIOUSLY BULLISH and NEUTRAL for stocks.

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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October 28, 2009

Market Update – You Cheat

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

How to Clean Your Computer Screen

Thanks to one of you who sent in this most  valuable LINK

What Happens When You Cheat?

  • You cheat – From Income tax to a college exam – Fines, jail, expulsion – there are consequences.
  • Big Shadow Banks cheat – Get truck loads of money and executive get lavish bonuses
  • Ahmadinejad cheats/steals election – You get the religious leader’s blessing, violently crush opposition and become president
  • Karzai (Afghanistan) steals election – You get a do over even when your brother is perhaps the countries top opium dealer and on the CIA payroll for last 8 years.  LINK

You and I pay consequences and are held accountable. Others….

Back to Back Tom Friedman Editorials – Afghanistan

TF is usually a hawk when it comes nation building and military escalation, but surprisingly he opens with “We need to be thinking about how to reduce our footprint and our goals there in a responsible way, not dig in deeper.” LINK

TF echos what Investors411 has been saying for years – As much as we and moderates in the Arab world want to see modernization we can’t do it for them. In fact, our involvement almost always makes things worse. This time the Pulitzer Prize winner adds

“A strong, healthy and self-confident America is what holds the world together and on a decent path. A weak America would be a disaster for us and the world. China, Russia and Al Qaeda all love the idea of America doing a long, slow bleed in Afghanistan. I don’t. ”

Where’s Waldo – Obama

Unemployment, Afghanistan, Health Care , etc. Where is our charismatic leader? Hard at work?  He spent his last few days going coast to coast on a fundraiser in FD, CA and even right here in MA. He’s out campaigning in VA and NJ.  Politics as usual or change we can believe in?

Is Obama’s work ethic beginning to look like Bush’s on Katrina? -  Difference – Obama does look good on the golf course.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow +0.14% down
NASDQ -1.20% up
S&P500 -0.33% down
Russell2000 -1.13%
-

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, Fundamentals & Analysis

The dollar rules. The correlation is probably around 90% on a day to day basis.  The fall in stocks over the last three trading days is due to the rise in the dollar’s value vs. other currencies.

Basically the dollar falling is an indication that long term debt of the USA is growing relative to other currencies.  Growing US deficits is almost a consensus view. This has been ongoing since 2000.

What caused the three day rise in the dollar is probably all technical.  So many traders were short the dollar (expecting it to fall further) when some entity (probably a central bank(s)) bought dollars the rise forced the shorts to buy to cover.  A simpler explanation of this is basically there were so many sellers that there were no new sellers left.  Same thing often happens with buyers. Remember, just about everybody sold stocks in the spring and the fact that we ran out of sellers was one of the reasons markets turned.

For more see section on dollar below.

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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 @ 30% 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 lost -31 points yesterday and closed at 3013. A higher high price on its chart pattern has been confirmed The BDI has rallied almost 900 points since late September. =  Bullish for stocks & world trade right now

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The Dollar is currently the #1 forecasting tool . It would be a wild guess to predict he daily moves of the dollar, but longer term fundamentals are clearly negative – the trend of a falling dollar should continue.

$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 for forthethe third straight day +0.26% The dollar closed at $76.21 .  This is above the former support – now resistance level of $76.oo . Technically - Bullish for dollar & Bearish for stocks.

The next important resistance level for the dollar is the falling 50 day moving average (blue line on chart). This is at 76.88 this AM. It’s the line in the sand – Best read of the tea leaves is that it will hold. In fact, Investors411 will add to some positions as we get close to this resistance level. The rate the dollar is falling has diminished as we approach this important resistance level. A sign that it will hold. However, if it falls we could see a major correction for stocks.

Last year’s low was around $71,(March 08 ) so there is a long way to go before the major and very crucial support level is reached . The dollar does have a support level around $74.00( a high from about a year ago – see long term chart)


Positions

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

Outside the USA in Emerging Markets (especially China, & Brazil) are much better in the long run - Our problem is one of timing. We can’t get a 5 to 10% dip to invest. Investors 411 should have much larger positions in emerging markets .

Look to add to EWZ (Brazil) and FXI (China) positions if they continue to fall this week . Bought more EWZ yesterday (see below)

For Traders (not long term Investors )

NVS (You could also sell 50% and put in a stop/sell order) I sold 50% of NVS (5% of portfolio) for a 12+% gain. Placed a stop/sell order at just under $50.00 for the other 50%.

EWZIt was a mistake to sell (9% of portfolio or 50% of total holding) of this. Buying it back -  Added (5 % of portfolio) EWZ at 71.7.  Will buy more if/when it drops lower.

Traders – Three major tech stocks leading the charge – Hope CSCO joins them when it reports earnings. Investors411 has a (5% of portfolio position in CSCO that is down over 3% )

  • AAPL – cutting edge computers and telecom revolution (phone’s) moving into China.
  • AMZN – Fabulous earnings report and forecast.
  • GOOG – Internet adds is growing even in USA.


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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