Investors 411 Blog

by Barr Jozwicki
May 14, 2010

Pogo

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

WaltKelly Pogo 1964-03-08 96.jpg

I think it was Pogo in the old Walt Kelly comic strip who said it first “I’ve seen the enemy and it is us.”

It Just Gets Worse – Gulf Oil Spill

The NYT is headlining that the size of the spill has been seriously underestimated (Perhaps 4 to 5 times larger) & drilling was allowed in Alaska/elsewhere without permits

Whistleblowers, BP hiding data, BP not following regulations, a giant oil  & More from Big Oil Spill Page

Perhaps, the most alarming or sensationalized news is in the following from Dan Froomkin at Huffington Post -

A new analysis of sea floor video indicates that nearly 70,000 barrels could be gushing out every day, NPR reports. That figure is at least 10 times the US Coast Guard’s original estimate of the flow, and “the equivalent of one Exxon Valdez tanker every four days.”

Bottom Line - The technology may be revolutionary and work, but human error and greed always are factors not entered into the equation. This does changed the balance on everything from drilling off shore to nuclear power for me. (more later) You just can’t mess with Mother Nature. The only way to ensure people play by the rules is to have a strong, (if it has to be) big, tough government that enforces these rules.

If our politicians protect shadow financials or any shadow company (BP) – they should be voted out of office.  All we have now seems to be crony casino capitalism.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -1.05% flat
NASDQ -1.26% flat
S&P 500 -1.21% down
Russell 2000 +0.87% -

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

Technicals, Fundamentals & Analysis

Stocks moved significantly lower in weak, below average volume. Because volume was weak = NEUTRAL

From Yesterday - All week long the 50DMA of the benchmark S&P 500 has been mentioned as a key resistance level = RED light for markets.

What happened yesterday - Stocks again bumped all day against the 1173 S&P resistance level. It became evident that the S&P 500 was going to not break out. At 3:00 PM EST  all the major institutions came in and sold driving the market down toward its key @1150 support level. S&P ended day at 1157.44. Closing at low = Bearish

If we close below 1150 today = Bearish Therefore 1150 is the line in the sand to watch.

The increased size of the Gulf oil Spill is going to be along term negative on most stocks, if the new analysis turns out to be correct = Bearish

European stocks down @ 2% this AM. = Bearish

Shadow banks seem to be winning the financial reform battle = Bullish

Significant Indexes

  • McClellan Oscillator fell to -29.08 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is NEUTRAL territory.
  • US Dollar – rose +0.63% yesterday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important Dollar Rules because it broke out to new high is a significant move. = VERY BEARISH
  • The BID – Kept climbing. It has broken out to a new 5 month high. The Baltic Dry Index measures the cost or flow of goods/trade between countries. This is positive for export countries like Brazil and China and commodities. Goods costing more means trade is increasing. One analysis of this is shipping costs are rising because of Gulf oil spill. = Neutral

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own

Sold ( took profits in) 1/2 of Investors411 positions in TYH yesterday when it became evident that we were NOT going to break out in the S&P 500.

Time to take some profits, especially if you did not yesterday. (no one goes broke taking profits)

  • The dollars breakout move yesterday is very bearish in the long term.  The dollar is rising because the Euro is falling.  Most analysts I’ve heard expect this breakout to continue.
  • The McCellan Oscillator is in NEUTRAL territory and has a ways to go before -60 or even lower. It did get down to -123 last Friday . Do not believe  we will reach those levels again soon. But, the dollar is acting like an anchor on any stock advance.

Traders sell at open and/or wait for a rally.

Again the major tipping point is a drop below S&P 1150 support. Perhaps it will hold, but if the dollar keeps moving higher the best US stock will do is move sideways.

China FXI is going nowhere.  As mentioned earlier this week it is a canary in the coal mine stock.  This canary over the last few days did not rise as fast as US stocks. Therefore it has started to chirp. FXI is one position Investors is going to sell today.

Yesterday @ 5+% was taken off the table (see Positions) & will do another 5 to 10+% today.  That total will be up to 1/2 of what was recently invested.

We can buy back in when the McClellan reaches a lower level. Obviously I could be wrong, but the dollar’s move is significant.

GLD is looking good to buy on dips.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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April 16, 2010

Blocks & Flops

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

R. KY Senator Mitch McConnell

Blocking Financial Reform

Republicans are considering blocking even debate on financial reform. Ewanapat thinks I’d like his comment/information/link. He’s wrong I Love it. The 3rd Fed Governor publicly has come out against the “shadow” banks that are too big to fail.

There are a few sensible Republicans (Simon Johnson and his Baseline Senerio best source on this) who are bucking Republican Minority Leader Mitch McConnell (see yesterday’s Investors411) do nothing approach.

Taxes

Mama Jama has sent in a link to a site that reales 80% of major corporations evade taxes by having offshore accounts etc. How much does this cost you? $637 in MA and small business has to pay their full share.

Tea Party Flops

Only a 1500+ showed up for the supposed “huge” final day of tea party tour on April 15th (Tax Day) in DC yesterday. A few thousand more showed up in Boston the day before but NOT the newly elected  Republican Senator or the Republican running for governor. They called the Obama administration a “gagsta government.”

Remember we many demonstrations of 10,000 20,000 and even larger protesting the Iraq war and other left of center issues all over the country and there was almost no coverage. Yet even on the financial channel CNBC they are headlining the Tea Party protest this AM.  This is

The issue of deficits is real, but the media distortion of the Tea Party is real too.  We live in a world created by media and the thousands of past protest that get over 1500 people in DC never got the kind of coverage that the Tea Party gets. This is media bias or media manipulation.


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 +0.19% down
NASDQ +0.43% down
S&P 500 +0.08% up
Russell 2000 +0.25% -

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

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

US markets improved a bit on Wednesday’s significant gains in above average volume = Bullish.

Google had  earnings report = an almost 4.71% fall in post market trading = Bearish

BAC (Bank of America) seems to have had blowout earnings numbers this AM up @1.5% = Bullish

Something called a Fibonacci retracement is important in worked of technical analysis. The benchmark S&P 500 is sitting just below a critical 62% retracement from its 2008 high according to analyst on CNBC. This is a strong resistance level. = Bearish

Significant Indexes

  • McClellan Oscillator fell to +8.67 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is still in NEUTRAL territory – technically neither overbought or oversold.
  • US Dollar – rose +0.36% yesterday. [Anything over +/- @0.50 is significant.] Mantra – right now The Dollar Rules Remember, dollar down almost always = stocks up. The dollar broke though its 50 Day Moving Average support level and next significant support and yesterday rose to just below resistance (Remember the 50 day MA is called its support on the way down and resistance on the way up).

Positions

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

I realize the TYH explanation will make some of your eyes glaze over because it is too technical. The best time to buy is when the McClellan is oversold and any trades now (McClellan Oscillator is neutral) is riskier.

TYH – (10%) (3X technology) Up well over 3% since bought. File under - If its not broken don’t fix it Mistake? – In the past Investors 411 sold 1/2 when TYH rose 3% and let the rest ride. Then I put a stop/sell order at what it was bought for or 3% below what it was bought for.  Bottom line here – selling 1/2 into any minor rally.

UWM – (5%) (does 2X small cap stocks) Bought yesterday at 37.57. Stop/loss set at 7% below what it was bought for

EWZ – (10%) (Brazil) Holding on

Monday’s are usually good days and some major tech companies report next week. So expect stocks to drift higher into the close.

Caution – Holding individual stocks into earnings is obviously dangerous – Even giants like INTC (+5%) or GOOG (-5%) can make huge moves. Smaller stocks even greater.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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April 15, 2010

Illusion of Democracy

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

Greenpeace report cover: Koch Industries

-

The Illusion of Democracy

In the USA we have an Illusion of Democracy. What we really have is a rich oligarchy that buys votes through money any lobbyists. Lets use two blatant examples.

  • The Billionaire ultra right wing Koch Brothers - JAB a few days ago sent a link to a site that quantified and qualified the $50 million they have spent to influence the American public’s vote. These right wing zealots with their $50 million sure have vastly more of an impact than you do with your one vote.
  • Let’s look at politicians who get this money – Great site to see how much your representative (Dems or Reps) is bought and by whom is OpenSecrets.org. Today’s focus Senate minority leader Mitch McConnell.  His leading contributors are shadow financials (securities & investment) at $1,147,924. Republican leadership just met with Shadow Financial and other Wall Street leaders on financial reform. Even ultra right FOX Business news carried the story

From the Tea party workers to the leadership of the Senate (include lots of Democrats in this) the truth gets distorted by the vast financial resources and screamers in & reported on by the media.

Yes, along with JAB I still boycott Exxon, and have now added Koch Industries (Georgia Pacific -paper products) to my small protest.

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 +0.94% up
NASDQ +1.58% up
S&P 500 +1.12% up
Russell 2000 +2.17% -

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

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

I really try to make this stock section as simple as possible, but I certainly hear your public (see comments section) and private pleas to make it simpler.  Over weekend I’ll put together some simple rules, strategy and sources

Big volume + Big rally = Bullish Outlook

UPS – world’s biggest package mover clobbers expectations. = Bullish

Weekly jobless claims worse than expected – two weeks in a row – Bad for economy, bad for Obama politically, but neutral for markets.

Reading the Tea Leaves – Add UPS to JPM & INTC results yesterday and you get the financial and technology sectors growing over expectations. Add more packages are moving across the globe. Add the Dollar dropping and McClellan Neutral (NOT overbought)  Everything at least till the McClellan gets overbought says Bulls will continue to stampede.

Its time to buy the dip and ride this rally till we enter overbought territory on the McClellan Index.

Significant Indexes

  • McClellan Oscillator rose to +19.34 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is still in NEUTRAL territory – technically neither overbought or oversold.
  • US Dollar – fell   -0.42% yesterday. [Anything over +/- @0.50 is significant.] Mantra – right now The Dollar Rules Remember, dollar down almost always = stocks up. The dollar broke though its 50 Day Moving Average support level and next significant support at @$79.5. Dollar closed at$ 80.19

Positions

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

Right Now, as I read the tea leaves, it looks like the beginning (first week+) of earnings season is going to be a bullish period and it would be good to be invested in those stocks/ETF that are going to move the highest.

Example, Yesterday Investors411 added a 10% position in TYH the ETF that does 3X what the tech stocks do. Price 174.1.  Originally, had planned to hold this for a small gain (3+%) but it now looks safe to hold till the McClellan Oscillator hits or gets close to overbought territory.

Depending on your level of risk – Buy dips (1 to 3% = dip) of following ETF’s – You can also check out YOUR stock list.  but as Pail R suggests – watch out for when earnings reports ate (google company and you will find date or your trading platform should provide this)

List from MOST risky to LESS risky

  • SOXL – 3x semi conductor stocks – Warning very thinly traded.
  • TYH – 3X technology
  • UWM – 2X small cap stocks
  • ROM – 2X technology
  • SSO – 2x S&P 500

I will be adding another 15%+ of these on dips.  Remember once we enter overbought territory its time to sell or lighten up. Set a stop/loss at a level you feel comfortable with. 7% maximum loss is what I use.  Once a stock goes up I usually raise the stop. There are more sophisticated ways of doing this, but I’m keeping it simple.  Investors411 will be exiting these positions as we come close to or over +60 on McClellan Oscillator.

Remember its a short term trade. It’s natural for their to be a dip today. If markets fall over 50% of yesterday’s gain in bigger volume this strategy is in trouble.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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April 12, 2010

Who Creates Deficits?

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

+48% Profit in TYH in 1st quarter of 2110

For more see Positions section below

Who Creates Deficits?

Chat from zFacts.com

Scott Herwehe has produced another worthy editorial in the comments section of the blog. Your comments section is an excellent source on politics, economics and markets. Suggest you check out, not only Scott’s editorial on Republican hypocrisy over the deficit, but  all other comments.

Here’s his conclusion on the deficit -

“Even the financial bailout is significantly small compared to just Bush’s tax cuts. Social spending doesn’t even compare. Our corporate controlled media will never talk about the Bush tax cuts because that would be acting against their own interests. Who benefits from a tax cut for the rich? The wealthiest among us. Who control and finance our corporate media? The wealthiest among us. The only way to get out of this recession of the real economy (not Wall Street) is to spend money in a manner that creates jobs or in other words benefits the majority and for once not the minority.”

India Ascending

Economically, India only experienced collateral damage from the 2008 meltdown. Why? – Dr. Yaga Reddy, the former head of the Bank of India, did not buy into the American concept of unregulated free markets. Bob Kuttner editorial on India, King’s College and those who withstood the breakdown of our unregulated capitalism that had to be bailed out by taxpayers.

Dem’s to Attack Wall Street?

Democrats seem eager to attack Wall Street was the headline, by Lisa Leher, on centrist web news site Politico over the weekend. Will we finally get some financial reform? If so expect Wall Street to get hurt in the short term. But in the longer term this is good for the economy of the US and world that we fix the problems that caused the 2008 meltdown.

If the Democrats follow through with this they will salvage the 2010 elections. Most Republicans will protect Wall Street. Problem is so many of the Democrats are owned by Wall Street. So much of Wall Street money will go to candidates that protect them.

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 +0.64% down
NASDQ +0.71% down
S&P 500 +0.84% down
Russell 2000 +0.47% -

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

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Another up day in reduced below average volume. The major indexes are even further above their 50 day moving averages than last week. This means they are even more overbought than last week. None of the major technical factors that have historically worked as prediction tools have correctly predicted US market direction in past months. – We should according to volume and distance from the 50 day moving average already be falling.

However, our McClellan Oscillator is holding up fairly well. Still NEUTRAL and not OVERBOUGHT. Lesson here is different technical indicators or theories work better at different times

Of course, the fundamental that’s behind all this is we have failed to fix any of the root causes that caused the 2008 financial meltdown that was created by  the almost completely non regulated US “free market”) financial system.  If anything they are even less regulated today.

This is the beginning of earnings week

Fearless Forecast for Last Week - “Up week”   Another correct call

Fearless Forecast for This Week – How markets react to earnings will be key. Earnings start to trickle in this week. The dollar again (see below) rules.  The Greek crisis seems settled (see below) and this will help stocks.  

Best read of the Tea leaves – We are in an “irrational exuberance” period – The trend is higher  so predicting up week.

Significant Indexes

  • McClellan Oscillator rose  to +3.26 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. – This is still NEUTRAL territory – technically neither overbought or oversold.
  • US Dollar – fell a significant  -0.60% yesterday. [Anything over +/- @0.50 is significant.] There has been some settlement in Greek debt crisis so Euro should rise and dollar fall in short term. Mantra – right now The Dollar Rules Remember, dollar down = stocks up.

Positions

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

+48% Profit in TYH 1st quarter of 2110

TYH is the ETF that does @3x what technology does & ROM (suggested, but not used) does 2X what technology does

Before we go over these figures and there are 2 important points.

  • Caution Don’t let it go to your head. For the most part these stocks were chosen when the US markets were oversold, other reasons, plus we were lucky
  • Re-read point 1

The dumbest thing you could do go out any buy TYH today.  Investors has a 0% stake in this ETF today.  Its way too far above its 50 day moving average and markets are in a neutral and not oversold condition. To see actual buys and sells link to Positions section of blog . Why TYH worked -

  • A bull market
  • Oversold conditions – Investors uses the McClellan Oscillator or as Monitor named it the Mickey O. The more oversold the better. Investors411 bought TYH in more or very oversold positions.
  • Technology and small cap stocks generally outperform in a bull market. (Its not quite this simple)

.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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