Popeye & Mama Jama (AKA Olive Oil)

Your Comments

Mama JamaAre 25 hedge fund managers are worth 658,000 teachers? The 25 moguls/oligarchs who run the giant hedge funds and only get taxed at 15% are earning $25 billion a year vs and average teacher whose salary is 38k per year (plus benefits) and being taxed at 28% – Only in America.

Want to learn more about the Ten biggest Lies or Distortion Wall Street is feeding Main Street from Les Leopold

Popeye - This comment caught both Paul and my attention yesterday It summarizes globalization & US political impact on Main Street – Big business no longer needs the American consumer to grow. To them the Chinese consumer is replacing them. (You could replace China with the word emerging market consumer)

So not only are jobs being outsource, but so are consumers.

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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 +0.09% down
NASDQ +0.15% down
S&P 500 +0.10% down
Russell 2000 +0.10% -

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Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

  • Markets were flat & volume abysmal AGAIN
  • Yesterday rare earth metals exploded higher. The new ETF for the sector REMX was up over 7% on a climax run.
  • Can’t emphasize this point enough - The Fed has now accumulated over a trillion dollars worth of T bonds  from its 21 Prime Dealers (Big financial institutions) These institutions all have trading desks that invest a lot of that money in stocks. It also helps to keep a lid on Treasury yields and the new currency helps drive down the dollar. Without quantitative easing and low interest rates stocks would not have made the gains they have over the last 18+ months.
  • China has almost cornered the market on rare earth materials.

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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] The dollar fell a significant -0.71% yesterday. In consolidation pattern, but another significant drop and stocks should react positively.= Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets,&  exporting countries]Again NO DATA. Perhaps its the holidays BDI is at 1,773 and is approaching its major support at 1700 = Bearish
  • McClellan Index – (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] fell a bit to +19.98 Neutral
  • 10 year T Bill (TNX) Two days ago the Treasury bond yield went up about 4% and yesterday down the same 4%. Strange – stocks did NOT reacted to either major move. = Neutral

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Reading The Tea Leaves

We had some odd moves on the significant forecasting tools (see above) and No real reaction from stocks.

However, if the dollar and T bill yields continue to fall like yesterday  - It sure looks like the Fed’s manipulations through quantitative easing and low interest rates are having a significant impact.   This would be good for US stocks. Two points investors are looking at suggest quantitative easing may continue/ morph into QE3#

  • The deep economic trouble of state budgets (see Meg Whitman’s comments in last weeks blog)
  • Continued high unemployment.

AAPL the world’s #! tech stock is the canary in the coal mine. If the General rolls over watch out.

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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)

  • #1 UWM - (2x small cap stocks ETF) – Sold 1/2  for +9% profit
  • #2 UWM
  • EUO - (double short the EURO currency)
  • UCO – (double long oil) Bought Tuesday at  12.39 (this is a trade of short duration)
  • SLV – (Silver ETF) Bought Wednesday at (see comments section of blog.)

Selling 1/2 of UCO at open and putting a 2% stop loss on the rest. This ETF is currently at the price it was bought for. See yesterday for explanation)

Buying GDX – (The double gold ETF) –  A lot of the rise in price in gold has to do with the Fed’s print and dump of money. It says instability and gold says stability. GDC has dipped recently.

SLV has reacted technically even better than gold. It also has industrial uses

EUO have a stop placed at what it was bought for. It’s about 2% above that right now.

Your Stock ListPaul informs me that YSL#3 is currently under performing the benchmark S&P 500 +5.05% to +3.78%. Disappointing results However, there have been 13 gainers vs. 3 Losers. – It’s been two of those losers that have dragged down the entire list. Both are Chinese internet relate stocks that have big losses – BIDU & especially SOHU (More later)

UWMThe Critic informs me that the UWM (our major ETF position) that was bought on the same date as YSL#3 was published (11/22) for 35.76 is up +22% over same periodSince Investors411 has both bought and purchased double and triple positions in this market basket ETF, she is compiling a more complete record.

I’ve tried a lot of other ETF’s that have been less successful over the same period. Example EEM, which was held on the same day UWM was purchased was sold earlier for a +4% profit.

Comparing the two is like comparing apples and oranges. Especially since many of the ETF’s turned out to be short term trades.

Diversity is the key here. I strongly feel that having both ETF and stock selection has merit and is a way of diversification. YSL numbers 1 &2 outperformed the benchmark S&P by over 2 to 1.

Let’s give it all more time before the final results are in. Then learn from what was done.

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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)-

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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