John Boehner

Take No Prisoners

Our political structure has devolved into a take no prisoners style of government.  Compromise has become a dirty word and threats of financial armageddon will soon becoming reality.

Ezra Klein (Bloomberg & Washington Post) has a comprehensive look at John Boehner’s (Republican House leader) demands over the debt ceiling.  This is obviously influenced by the Tea Party’s growing domination of the Republican Party. The Democrat’s too seem only be out to score political points.

Klein’s name is linked to the article and I stronly urge you look at it.

_____________

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 +0.60% up
NASDQ +1.01% up
S&P 500 +0.81% up
Russell 2000 +1.56% -

_____________

.

Technicals, Fundamentals & Analysis

Investors411 record - 6 years of beating benchmark S&P 500

  • The liquidity provided by the Fed ( quantitative easing) is still the dominant factor. These $ combined with low interest rates force money into stocks.
  • The big news of the week is the weekly jobs number on Thursday. – Whose right? the monthly report = employment increasing or weekly employment decreasing.
  • Watch UUP – tracking stock for the dollar.
  • Not good news for stocks - Partisan Divide on Debt Ceiling Hardens
  • Significant question – Can stocks rally if US political structures growing ideological wars and lack of compromise continues?

_________________

Shorter Term Forecasting Indexes

There are hundreds of forecasting tools, – These two tools have worked

When they stop working Investors411 will use other Indexes

  • The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar fell again yesterday -0.17% The dollar has challenged its falling 50 day day moving average/strong resistance level and failed to overcome this barrier for the last three days.  A short term rebound earlier was bullish, but now the bears are regaining some momentum. Long term trend still bearish, but no clear direction exists until the 50 DMA or the old low is broken. (see link to chart) = Neutral
  • McClellan Index(MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] Mo on   rose to +32.00. We are approaching oversold. Last two highs of between 50 and 45 gives us a day or two(depending on gains) left to the rally. = Neutral

________________

Dividends

Part 2

Dividend Stocks vs. Non-Dividend Payers

The following are the sexy, high octane , high risk dividend plays. The criteria for the selection of all dividend stocks was announced Monday.

Most of the group below are in some was involved in trading derivatives. They may use black box trading techniques and/or be high frequency traders.

Disclaimer - I own the two stocks mentioned below. You might want to own one of their competitors. Do your own research

NLY – Annaly Capital Management. Dividend 13.82% per year last quarter.

What they do – “We are primarily engaged in the business of investing, on a leveraged basis, in mortgage pass-through certificates, CMOs and other mortgage-backed securities representing interests in or obligations backed by pools of mortgage loans issued or guaranteed by Freddie Mac, Fannie Mae and Ginnie Mae.”

NLY, I believe, is the biggest firm of this group. Market cap = 14.4 billion. Others competitors and similar high yield dividend plays are smaller.  JS points out in the comments section that NLY is a favorite stock of Jim Cramer.  The dividend for the stock 0.60 per share 8 quarters ago and reached a high of .75 six quarters ago and  the latest quarter was .62.

AGNCAmerican Capital Agency. Dividend 18.78% per year last quarter

AGNY is a 3 year old company. Market cap $1.9 billion.  It rose to a hight of $1.50 dollar per share dividend  two years ago and has had what seems like a too good to be true steady 1.40 dollars per share dividend for the last 7 quarters.

Competition – You may find the following companies more desirable after you do the research.  HTS, MFA, IVR, CYS (the last has the highest dividend payout) There are others in this group.

Reasons for holding – The government has weak regulations on the derivative markets and it does not look like any changes are coming in the future.  These are risky plays and NLY is now trading at 18, but did reach a low of @ 11 in 2006 and 2009. (See link to chart) From late June of 2008 to late May of 2009 the dividend of NLY was a relative steady 0.50 to 0.55%. So NLY during the financial meltdown had a steady return.

More on dividend stocks ASAP – Next the anchors – or the dividend stocks you may hold through tick and thin.

Caution – all dividend stocks are vulnerable to run away inflation.

________________

.

Positions

Reading The Tea Leaves – MO has been an amazing accurate forecasting tool for the past year.  It saying we are getting near a technical top (See above)

Disclosure - I have personal ETF positions in REMX and manage a fund that has a 5+ year position in GLD. I also own NLY and AGNC mentioned above

  • REMX is going to take a hit today. The #4 stock in its portfolio MCP had a bad earnings report and was down 12% in after hours trading. This will probably drag REMX down below its 50DMA. I will lighten my position here (at a loss) if there is no rebound by the end of the day.

______________

Check out the advice, recommendations, analysis by bloggers on stocks,politics and trends in the comments section of the blog  Many of the best concepts regarding YOUR Financial Future are discussed their. Watch for Paul’s Corner every Tuesday and Thursday

_________________

Longer Term Outlook

CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

  • Share/Save/Bookmark