Increasing Taxes on Wealthy

A Poll by CBS News and Vanity Fair show what the American people would do when presented with the 4 major ways of correcting our debt problem.  These are by far the  3 most significant parts of the budget (the next largest is the debt itself) and it includes increasing taxes on the wealthy as a solution.

1067 adults were used in the survey. Here’s the LINK. “To Reduce the Deficit Tax the Rich More.”

Thanks to S Herwehe for the heads up on this.

So why is the media pounding day after day on everything else, and ignoring what the American people want?

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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

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Index Percentage Volume
Dow +0.18% flat
NASDQ -0.38% up
S&P 500 +0.13% up
Russell 2000 -1.59% -

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Technicals, Fundamentals & Analysis

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

  • Another heavy volume day.
  • “schizophrenic.” reaction by major market players over last few days
  • Leaders like overbought commodities and small caps take it on the chin.
  • It looks like the BAC settlement is the single biggest factor behind Monday’s rally and that factor seem to have been temporarily built into stock prices.
  • NB$BDI numbers came back on line and its at 1993. 7 points below major support = BEARISH Will put this back under Significant Forecasting Tools tomorrow. Really wish we had had these numbers the last few days. Would have sold more yesterday.

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Significant Shorter Term Forecasting Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] A big dollar fell apart and the dollar rose  yesterday  +0.40%. For stocks trend is = Neutral/Bullish
  • McClellan Index – (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] fell a to +12,70Neutral
  • 10 year T Bill (TNX)  In consolidation pattern  Some big recent moves shows big indecision = Neutral

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Reading The Tea Leaves


Total chaos for major market players. The major firms use puts and calls. They have gone  “schizophrenic.” In one day the ratio of puts to calls went from one extreme to the other. See 3 month chart from SentemenTrader and their comments below.

  • “Never before has this indictor swung from a three-month high to a three-month low on back-to-back days, but it has now.  Traders went from heavily trading puts on Friday to calls on Monday.
  • Historically, that kind of surge in call buying has been quite bearish for stocks going forward, but it failed completely during December.”

A correction would be healthy for stocks. Commodities, especially have been overbought.

Sentiment Trader says that “bears failed completely in December.” However now volume is over two times what it was in December.

When market behavior becomes erratic and volume INCREASES it is almost always a good time to be on sidelines

So I’ll be cutting back on another position or two early today or on first rally. (see below)Then wait for a correction to run its course. It may NOT be a long correction.  There are also potential buys listed if we dip far enough.

Additionally the Baltic Dry Sea Index has broken support. = BEARISH

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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. (oldest held positions listed first)(see comments section where all trades are first announced)

  • #1 UWM - (2x small cap stocks ETF) – 1/2 position -Sold last 1/2 of UWM at 44.25 for +11% gain. Total gain on trade +10%
  • #2 UWM Will placed 2% trailing stop on 1/2 this position
  • SLV – (Silver ETF) Will place 2% trailing stop on 1/2 this position. May sell more.
  • DGP -(2x gold ETF) Sold 1/2 near open at 41.26 for -1% loss Sold the rest near close at 40.50 for -4% loss Total loss on trade -3%
  • REMX -(ETF for Rare Earth Metals) Sold 1/2 at 26.12 for +6% gain

Under consideration

UCO -(2x oil prices) Very erratic, waiting till correction it settles.

REMX (Rare Earth ETF) – Will consider more on a dip. Limited supply. China which dominates market is limiting exports. All this makes for a massive supply/demand problem forcing prices higher.  Rare earth goes in everything from hybrid cars to TV’s. Very excited about this sector for the long term. Would consider adding to position if price falls to about 24.

EWZ (Brazil) & LBJ ( 3x Latin America – majority Brazil) Obviously the later is more risky because its leveraged 3X. EWZ has had 6 straight major rally days and is sitting directly below a major resistance level/new high for year. LBJ just failed to break out and dropped yesterday. A dip for a few days would be an decent entry point.

UYG (ETF that does 2x Dow financials) XLF is the financial ETF. - The major shadow banks have the backing of the US government & the Fed. The recent BAC /Treasury/Fannie Freddie decision was the latest in a long line of NOT holding banks accountable and their accounting is non transparent. Remember these are the Shadows that are behind 8 million more Americans being unemployed, the dramatic fall of housing prices and a worldwide “great recession.” Broke out two days ago and pulled back yesterday. Both overbought at this time

NB - I did sell DGP yesterday, although a firmly believe that yesterday was nothing more than a bunch of traders trying to panic the gold market and drive the price down, so they can buy.  The TERMINATORS WORDS – “I’ll be back.” in gold.

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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.” (YSL#3)

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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