Bubble’s Bursting

YOU feel like you’re standing in a room and looking around with everyone else to see if anyone else notices there’s a massive time bomb about to go off and no one is doing anything about it. You watch politician’s babble about cutting waste, foreign aid or welfare recipients and realize that’s what’s been done for 20 years and there’s less than 2 or 3% of this budget left to cut. Here’s the naked reality

  • Medicare & Medicaid are going to explode in cost as baby boomers reach retirement
  • Social Security payments are going to explode too. Each of these entitlements alone dwarfs political babble about cutting waste etc.
  • Military/weapons spending exploding higher and now is the #1 government spending category
  • Tax cut advocates are screaming for more and crashing planes into buildings
  • Our shadow financial system has drained trillions in further resources and remains in the shadows.
  • Health care cost are exploding out of control
  • Massive private debt (credit card,housing,job loss etc) is driving many Americans into despair.
  • Massive debt crisis in US  trade
  • Housing bubble has burst

When you consider all this it seems like a miracle that Obama has kept the American economy & the stock market afloat.  Politicians on every side think more their own power instead of getting something done.  You get so sick & tired of listing to politicians blaming others and calling for “a dose of reality” instead of sitting down together and getting something done. Meanwhile – Tick Tock, Tick Tock, Tick Tock – BOOM.

Investing Bottom Line – These financial liabilities and our inability to solve them are why it is  no longer safe to buy and hold US equities.  The potential of financial bubbles growing and bursting are just too great. Our government just too polarized. It’s hard to see a decade without continued financial meltdowns.

Death Toll = 1000 in Afghanistan

Obama has joined Cheney/Bush and continues to try to nation build in Afghanistan. US on Feb 19th reached 1000 casualties.  Obviously, the surge of American troop here has a lot to do with upcoming wars in Iran (Afghan. & Iraq surround Iran) and Pakistan (Afgan also boarders Pakistan).  We’ve seen our military budget double over the last decade and its continuing to grow perhaps faster than Medicare, Medicaid and Social Security will.

KISS & Stocks (Keep It Simple Stupid)

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


Index Percentage Volume
Dow -0.97% up
NASDQ -1.28% up
S&P 500 -1.21% up
Russell 2000- +1.14% -

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.

US Consumer Confidence plunged yesterday. The monthly index had just hit a 16 month high and it plunged yesterday. Simply put Consumers are worried about the economy. They make up @ 70% of GDP.  After a solid 3 month rise the unexpected fall from 56 to 46 could means the consumers fell like they took it on the chin last month. This is bad news for the US economy, but many US stocks are rebounding because of Asian and Emerging market growth.

There is obviously a disconnect between US stocks and the US economy US Stocks can rise without the US economy because many of them rely on profits from abroad.  But, Europe is in trouble and emerging markets alone are not big enough to carry the res of the world.

Markets fell as volume rose. Volume was slightly above average. Would have expected more volume. Surprised that US markets did not fall further.  Another indication that many long term investors are simply not interested in stocks = Bearish signal

Two Major events today. Toyota’s embattled CEO & Bernanke in front of congress

Significant Indexes

  • McClellan Index fell to +18.33. + or – 60 is our overbought/sell or oversold/buy levels.  +18.33 is approaching neutral or 0


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

Sold another 1/3 0f TYH at 131.35 for a +6% gain. I’ve also set what’s called a stop/sell orders  on

  • recently bought (added to) EWZ at @ 2% above what it was bought for
  • 1/2 of MOO, a longer term position.
  • The remained of THY

This is just protecting gains before they turn into losses

McClellan Oscillator is not close to buy or sell position.

Long Term Outlook = NEUTRAL


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