Compromise

American’s say they want compromise and legislators working together.

In fact 23 separate polls say the deficit should be reduced by raising taxes (this figure ranges from 76% to 59% vs 40% to 19% who say only spending cuts)

Yet we learned that greed and fear based Murdoch style journalism sells. Ideologues hate compromise and, as many of you are aware, almost all Republicans have made a pledge NEVER to compromise on taxes even for the wealthy. The path of No compromise.

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Historically,  countries have chosen the path of growing as their primary way out of recession. The Tea Party dominated congress has forced considerations of immediate cuts on a weak economy that will constrict spending.

We’ve come from loosing -720,000 a month to gaining +117,000 a month. Moving in the right direction, but still way too fragile a recovery to withstand the impact of a constricted economy. A few of many examples of making cuts sooner rather than later.

  • You constrict the economy = less jobs. One major reason for the recent growing deficit is so many people out of jobs, or in under paid jobs paying almost no taxes.
  • Cutting education and teachers – High tech is the future of jobs, slash them and there are fewer good paying jobs for Americans and deficits grows because fewer have decent jobs.
  • Raise social security eligibility age. If you raise the age for ss people will work longer and young workers will not find jobs.

By not focusing on the clear and present danger – jobs and our economy - we have done significant damage to our hopes for the future. We’ve again chosen the wrong path.

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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 -4.62% big
NASDQ -4.09% big
S&P 500 -4.42% big
Russell 2000 -5.16% -

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Technicals, Fundamentals & Analysis

Shorter Term Outlook.

day/days/week

  • Fear, Fear Fear dominates the markets and many believe we are in a selling climax[translation - almost everyone whose going to sell has already sold] A climax sell off is when there is huge, increased volume behind the selling. This huge volume/meltdown has been the case for over a week.
  • Outflows from mutual funds (see below) also indicate a climax sell off. However, everything gets exaggerated because over 60% of all trading is done by High Frequency Traders. I would imagine even more than the 60+ is now being done by HFT’s because of the huge volatility. New HFT’s rule – Technical aspects may be secondary to headline driven markets
  • CAUTIONEven more mom and pop investors have left the markets in the latest meltdown. High Frequency Traders rule even more than before. This is what is creating the massive interday volatility (especially in options). Don’t be fooled into thinking these are normal investors getting back into the markets – its HFT’s taking a an ever bigger and bigger share of US equity trading. $16.94 billion in outflows from mutual funds last week almost equaled the record held by the week directly after the HFT induced “flash crash”
  • The McClellan Oscillator (MO) fell to -87.80 (-30 somewhat oversold, -60 oversold, -90 OMG oversold). Were at almost OMG oversold levels.-88 is not as bullish as the -142 a couple days back.  But, technical outlook = Bullish
  • Reading The Tea Leaves - Stocks are moving on headlines and that move is exaggerates by all the HFT trading. The macro headlines are worries over Europe’s banking system and a downgrade of France’s AAA credit rating.

From yesterday Bottom Line… More often than not lows are retested before a rally.

Bottom Line - Lows were certainly retested yesterday.

So the stage is technically set for some kind of oversold rally. However, fear dominates right now and fear is driven by headlines. (Example – S&P downgrades France from AAA credit or bond yields in Italy/Spain rocket higher again.) Sorry I’m just not fast enough on a short term basis to predict headlines and how markets will react. HFT’s do this in microseconds.

Longer Term Outlook

weeks, month, months

  • RepeatMay 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.
  • Long Term Outlook Listed Below. Some major Long (monthly charts that go back over a decade)term trend lines have been broken (will go into this tomorrow) = Bearish

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Paul’s Corner

I’ve mentioned HGSI quite a few times as the software I use to research and evaluate stocks. It’s  a powerful and easy to use program.  HGSI usually features a webinar every month demonstrating the program and giving trading tips.  Their next webinar is as follows:

Join HGSI Power User Ray Ebert on on Tuesday August 16th from 8:00 pm to 9:15 pm EDT.  Ray will present  ” Prospecting and Trading Within a Weekly Timeframe.”

Ray has been using HGSI since 2009 and earlier this year was selected to be a “Spiker,” an elite-level member of SpikeTrade, a trading community managed by Dr. Alexander Elder and Kerry Lovvorn.  In his first quarter as a Spiker, Ray distinguished himself by winning first place for equity and 2nd place for points in the weekly trading competitions.

For traders/investors who are challenged with finding the time to trade regularly or who want to incorporate more structure into their trading routine, Ray’s presentation should be of great benefit.  He will share his disciplined weekly trading methodology using HGSI and other software.  He will also give examples of how he manages his trades and provide technical analysis of stocks submitted by the audience.

Registration   www2.gotomeeting.com/register/382039138

I encourage you to join in for some good trading tips!

So on another 500 pt drop yesterday, where did the money go? My favorite top 100 high demand search shows gold stocks  led the way with 25%, Oil & Gas Transporation 7%, Prec. Metals 7%,

Gold (25.00%, 25 securities)

  • Agnico-Eagle Mines (AEM)
  • Allied Nevada Gold Corp (ANV)
  • AngloGold Ashanti Limited (AU)
  • Aurizon Mines  Ltd. (AZK)
  • Barrick Gold Corporation (ABX)
  • Buenaventura Mining Company (BVN)
  • Coeur D’Alene Mines Corporat (CDE)
  • Eldorado Gold Corp (EGO)
  • Gold Fields Limited (GFI)
  • Gold Resource Corp (GORO)
  • Goldcorp  Inc. (GG)
  • Harmony Gold Mining Co.  Ltd (HMY)
  • IAMGold Corporation (IAG)
  • International Tower Hill Min (THM)
  • Jaguar Mining  Inc. (JAG)
  • Kinross Gold Corporation (KGC)
  • Minefinders  Ltd. (MFN)
  • Nevsun Resources  Ltd. (NSU)
  • New Gold  Inc. (NGD)
  • Newmont Mining Corporation (NEM)
  • Novagold Resources  Inc. (NG)
  • Randgold Resources  Ltd. (GOLD)
  • Richmont Mines  Inc. (RIC)
  • Royal Gold  Inc. (RGLD)
  • Yamana Gold  Inc. (AUY)

Oil & Gas Storage & Transportation (7.00%, 7 securities)

  • El Paso Pipeline Partners LP (EPB)
  • Enterprise Products Partners (EPD)
  • Magellan Midstream Partners (MMP)
  • ONEOK Partners  L.P. (OKS)
  • Plains All American Pipeline (PAA)
  • Southern Union Co (SUG)
  • Williams Partners L.P. (WPZ)

Precious Metals & Minerals (7.00%, 7 securities)

  • Endeavour Silver Corporation (EXK)
  • First Majestic Silver Corp (AG)
  • Hecla Mining Company (HL)
  • Pan American Silver Corporat (PAAS)
  • Silver Standard Resources  I (SSRI)
  • Silver Wheaton Corporation (SLW)
  • Silvercorp Metals Inc. (SVM)

Careful with the gold and related stocks, the CME raised margin requirements on gold

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.

I still have a Put position to protect NLY. (strike price $17.00 for 3rd Friday in Sept) Also puts on other dividend stocks.

GLD – (Long Gold ETF) Obviously a mistake to sell and take meager +3% profits. Like a millions of other people who see worldwide economic problems ahead – waiting to buy another dip.

DisclaimerPersonally I own  a group of dividend stocks including NLY.  I have placed puts on all of dividend stocks I own. I buy everything in the hypothetical Investors411 portfolio. I also own some SDS & TZA (ETF’s that double and triple short the market) as hedges.

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Long Term Outlook (for US Economy)

BEARISH

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Long Term Outlook (for US stocks)

CAUTIOUSLY BEARISH*

*Investors411 has 5 different long term valuations – BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, AND BEARISH.

* Everything written in BROWN is a repeat from a previous day

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

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