Monday, 31 August 2009

Weekly Wrap: Your source for stock, stock market, and stocks info

Weekly Wrap: Last Week marked another week that the market closed higher, albeit a small one. The S&P 500 hit its highest point (1039.47) in the entire run up from the March lows. You have may have heard the saying “Buy ‘em cheap, sell ‘em dear”. Or may have heard,”Buy the dips, sell the rips.” They are essentially saying the same thing. And it goes for all markets, not just the stock market. That means the housing market, the fish market, the bond market, or even your local grocery market. You have to buy goods (and plenty of them) when they are cheap, and sell them when they are expensive. We all do this when we go to our local supermarket, but why is it that the majority of investors don’t do this when it comes to the stock market. Well, there is a reason. But that’s a side issue and I won’t go into the “Why?” investors do it. I am just going to tell that you should approach the stock market the same way you approach the supermarket. When an item is on sale in the grocery store, we rush to buy more. When an item is on sale in the stock market, investors dump the stock because they fear they are going to lose all their money. You should be doing exactly the opposite. You should be buying a stock that is going “DOWN”. It seems counter-intuitive. But if you want to make money, that’s what you have to do. Generally, you have to act contrary to popular public opinion (“the crowd”) in order to be successful. So, with that said, herein lies the point. The market has now vaulted up from the depths of pessimism in early March to the throws of optimism in late August for six months IN A ROW. To continually go up without a single month closing down is impressive. What is equally impressive is that you would be hard pressed to find a time period in which the market went up six months in row in the last 100 years and it didn’t kick off a new bull market. Especially considering the type of collapse the stock market had in 2008. That’s what makes this time period extremely interesting because if the market is going to collapse (like I think it is), then it is going to happen very soon because eventually the market will run out of steam. It is already running out of steam. The volume has been dying off every month that we go up indicating that the professional money is not interested in higher prices. You should know that 70% (maybe even more now) of trading in the market is done by professionals and it is THEY who truly have the power to move markets up and down. They are the only ones with the kind of capital that can stop a bear market in its track and launch a new bull market. A keen observer would have spotted their participation in late February and early March, when the volume was expanding. That let you know that the professional money was in there buying the market from all the panicking investors who were listening to all the bad news at the time. Right now most of the news is being portrayed as good, yet the professionals are not interested in buying more, which is why you don’t see the volume expanding (it’s shrinking). Meaning that as soon as they start selling, there will be nothing anyone can do about it. And from a technical perspective, I think the market has maybe another 2 months up, which would make it eight months IN A ROW from the March lows. I think that would be absurd in my opinion because I don’t see any of the economic data being released supporting stock prices at the levels. So I am anticipating a correction somewhere in the next two months. It could be September or October. It doesn’t really matter when it happens because there are very few good risk/reward opportunities to the long side. Because of that, it must be time to start looking to the short side (being contrarian). Buy ‘em cheap, sell ‘em dear. In other news last week, Ben Bernanke was nominated for another term by President Obama. Answer me this? Why is it that the American people don’t decide (i.e. vote) on who gets to be in charge of the Federal Reserve if it is a government agency? That’s because it isn’t a government agency. Do some research. The Chairman of the Federal Reserve is decided by a small committee of people who is then given the O.K. by the incumbent president. I don’t thinking the nomination of Bernanke by President Obama was a good thing. President Obama said that it was his “bold action and outside-the box thinking that has helped put the brakes on our economic freefall.” Really, we’ll see about that in 2010, if his “bold-action” and “outside the box thinking” will put the brakes on our free fall. All I am going to say is “One of us is going to be right”. Either President Obama and Bernanke are right and the recession is over, or I am right this time period will be recognized for what it really is, a depression. Meanwhile casualties in Afghanistan climb. 45 U.S. troops were killed in July, making it the deadliest month for U.S. troops since the conflict started 8 YEARS AGO. Can somebody tell me how much is this conflict costing Americans and why are we even there fighting in the first place? Because most of the people I talked to have no idea.

Saturday, 29 August 2009

Did You Know?

Did you know that "companies in the 1990s could go public with annual sales of about $25 million, while the threshold today is $100 million or more?"

Source:
Investor's Business Daily
IPO View Still Foggy But Better
8/26/2009

Wednesday, 26 August 2009

US Economic Statistics & Data Part I (8-26-09)

I have posted the most recent I could find economic statistics and data. I say, be your own economist. Take a look at the charts and graphs and see for yourself what the US economy is doing. You don't need some guy in a crusty tweed jacket with goofy glasses telling you about how the economy is. You can see for yourself and come to your own conclusions. If you see recovery, then that's great. If you don't see recovery, then that's great. It's all about what the numbers mean to YOU.

US Economic Statistics & Data Part II (8-26-09)

US Economic Statistics & Data Part III (8-26-09)

US Economic Statistics & Data Part IV (8-26-09)

US Economic Statistics & Data Part V (8-26-09)

Robert Prechter Interview on Bloomberg (5-29-09)



I am putting an old video interview of Robert Prechter back in May. As this current rally finally reaches its last legs, we'll see if he was right or not. New bull market or bear market rally? What do you think?

Tuesday, 25 August 2009

Monday, 24 August 2009

The Stock Market & The Economy Have Nothing To Do With Each Other



Real traders know that the economy and the stock market have nothing to do with each other. You trade what you can see. The market bottomed in March and has been rising ever since. The saying goes "the trend is your friend".

Sunday, 23 August 2009

The Real People Media

Weekly Wrap: Your source for stock, stock market, and stocks info


Weekly Wrap: Well, well, well the Dow Jones Industrial Average, S&P 500, and NASDAQ are all at new recovery highs. If you have been stupefied at the ever-relentless rise of the major indices with a meaningful pullback or moderate correction, you are not alone. Even the professionals are dumb-founded by what is going on in these markets. Some say, that the is the most tumultuous market environment they have ever seen in their entire careers. Trying to forecast and predict what the market will do over the next year has been nearly impossible, but not completely impossible. Back in February and March, it didn’t take a genius to figure out that the market was going to have a sizable bounce because there was so much negativity and pessimism about the markets and economy. This is how markets work. They get negative and oversold, and this is precisely when you MUST buy. And when they get giddy and overbought, this is precisely when you MUST sell. So, what do we have now. It looks like optimism about recovery is running rampant. Every mainstream media outlet is saying the recovery is around the corner and the good times are coming back. Is this true? Probably not, because you could probably make money, if you did the exact opposite of what the mainstream media says. It’s just the contrarian nature of being a good trader/investor. So, to make money, you have to be ahead of the crowd. And right now, I am starting to get a little bit uncomfortable with the meteoric rise of the markets off of the March lows. Markets never go straight up and they never go straight down forever. So you can be assured that the market will run out of steam on the upside. I want to be early in inform you that if you have long positions in the market, it may be time to start lightening up on your positions or even outright liquidation because I believe the markets probably have (maybe) another 2 months on the upside before reality hits. There isn’t going to be any recovery this fall. And for people who maybe just started to get back into the market in the last few weeks, will probably be the ones hurt the most by the coming decline. The coming decline will be swift. In the beginning, the mainstream media will say it’s just a correction and that it is constructive and healthy for the market to correct. But then the selling will start heating up on the downside, and they will ask, ”Why is the market going down, if there is a recovery on the way?” Then, the market will head lower (by then, the market will be down considerably) and they will start to doubt whether the recovery is coming. And lastly, they will realize that the recession continues and that the preceding market rise was just a bear market rally. That’s how these things go. Stay ahead of the news by watching the market. I think the market rally is definitely in its last legs now, and I am preparing to sell my long position and even start putting on short positions. Some news last week, house prices rose in July 7.2% in the US. Apparently, for four months in a row. Meanwhile, delinquency and foreclosures are still hitting brand new records every day. Is the housing market in the US hitting bottom? I don’t know, but I still think it’s too early to start thinking about buying a house. Prices have come down a lot, but if you want to be sure you are getting bargain basement prices, I would wait another 2 years. Oil prices hit $74.72 last week high. It hasn’t even been confirmed that the economy is growing in the US and oil hit back at $74. Wow! Just think where oil will be when the economy is growing at a good pace again. Say hello to triple digit oil prices again. Maybe not this year, but certainly in the next decade. Speaking of oil, natural gas is getting crushed. I have no idea why natural gas is going down some much. It hit a seven year low last week at $2.80 per mil Btu. Do people still use natural gas? Of course they do, so it makes no sense to me. But there is an opportunity there. When things get so out of favor or so low, it starts becoming an attractive situation to invest in. “Value for money”. Natural gas is “value for money”. Could it go lower, yeah, probably. But it’s pretty damn low. I’ll finish with Ben Bernanke. He likes to print money. He also likes to make us feel better by telling us “everything will be ok” because we will just “print money” if we have problems. In Jackson Hole, Wyoming, “that the U.S. is on the cusp of recovery after a long, brutal recession and the worst financial crisis since the Great Depression.” Really, this is coming from the guy who said the subprime crisis was contained. The same guy who said house prices will stabilize in early 2007. The same guy who said the economy wouldn’t experience a recession in 2007. And we are supposed to TRUST him when he says the nation is on the cusp of recovery? I would give too much credence to what that guy says, what do you think?!!

Saturday, 22 August 2009

FinancialSense.com Interviews


These are 3 good interviews from FinancialSense.com. I listen to their broadcast every weekend because they always have good guests on the show and I always learn something new every time. This weekend is particularly good because there is an interview of Jack Schwager, author of the Market Wizard books, explaining some of the things it takes to be a successful trader. Also, there is an interview with Louise Yamada, who is a well-respected technical analyst on Wall Street. That is followed by Gerald Celente, from TrendsResearch.com, who has been successful over the last 20 years at forecasting trends.

http://www.netcastdaily.com/broadcast/fsn2009-0822-2.asx
http://www.netcastdaily.com/broadcast/fsn2009-0822-3a.asx
http://www.netcastdaily.com/broadcast/fsn2009-0822-3b.asx

Friday, 21 August 2009

Chapter 11: For Athletes?!!?!?!??!

Professional athletes are not usually known for their financial prowess. So it may come as a suprise to hear that Dave Bing founded a successful steel company or Joe Montana is a partner in a successful hedge fund. The real statistics may shock you. Here are some excerpts from an article I came across:

"Similar to lottery winners, with no financial prowess or discipline, most pro athletes go completely broke in less than 10 years after retirement. In fact, 60% of retired basketball players go broke in 5, and 78% of football players in 2! Athletes are forced to sell their homes, sell their championship rings, and file for bankruptcy."

"When a 22-year old is suddenly getting pay checks in the ballpark of $500,000 every two weeks, the idea of remaining somewhat conservative while planning for the future seems ludicrous. They find themselves purchasing $10 million dollar homes, 10 cars of at least $125,000 apiece, fancy restaurants and all-night parties, not to mention the drugs, the alcohol, and the gambling that is often associated with some of these rich celebrities. They fail to realize that once the income stops, the monthly payments don’t."

"Between 60-80% of professional athlete marriages end in divorce."

"Children: NFL’s Travis Henry: 9 women, 9 children. At roughly $3000 a pop, his monthly child support payments are equivalent to what some people earn in a year."

Check out the article. It is a interesting 5 minute read. People's comments to the article are hilarious.

Source:
Cosmoloan

Follow the Money...


The opposition to the proposed health care bill is hitting a fever pitch and it looks like, for the moment, this is the biggest issue in U.S. politics, but I want to talk about something that none of the politicians (really) want you to know. Ever heard of the names Nancy Pelosi, John Boehner, Harry Reid, Dick Durbin, Lamar Alexander, or Patty Murray. No? Well, I don't blame you if you don't know the “Who's who?” in American politics, but these are the names of none other than the elected officials who are supposed to be running our government. Why am I mentioning these people? Good question. I graduated with a B.S. in Finance, so being a “finance guy” I like to follow the money. I did a little digging and I found some interesting things. Such as Nancy Pelosi (D-CA) has raised $850,477 for 2009-2010 cycle fundraising, and that one of the top 5 contributors to her campaign is Boeing ($10,000). Like John Boehner (R-OH) has raised $1,094,448 in campaign money and his four top contributors are American Financial Group, American Electric Power, Lockheed Martin, and Southern Co, with American Financial Group giving the most ($38,000). Meanwhile, Harry Reid, D-NV, received money from MGM Mirage ($137,350), Harrah's Entertainment ($74,000), Station Casinos ($71,200), and JPMorgan Chase ($61,100) contributing to a grand total of $10,930,627 in 2005-2010 cycle fundraising. Do any of you out there think there isn't a little bit of “conflict of interest” when a proposed bill that benefits any of these major companies comes into the House or Senate? I believe there is, but it speaks to a larger problem. If these corporations are contributing so much money to the politicians so that they can stay in power is it any wonder why “the people's” interest do not get represented in government these days. Look, I don't know anything about politics and I am not particularly to interested in the machinations of the political machine, but I DO know about money. I KNOW that “money talks”. So do some digging for yourself, I think you will be interested in what you find.


Don't know where to dig? I thought so. Go to http://www.opensecrets.org/. The homepage of the website will explain it all. It's a site dedicated to primarily “Following the money in Washington”. See who's getting what and how much. Want to know who's getting all the bailout money, they will tell you. Want to know who in Congress is getting the most campaign money and from whom, they will tell you. Want to know the special interests lining up to get their piece of the pie when the health care reform bill gets passed, THEY WILL TELL YOU. Take a look. http://www.opensecrets.org/

Thursday, 20 August 2009

Commentary: Your source for news, commentary, and stock info


Don't Take Yourself So Seriously...

Monday, 17 August 2009

Friday, 14 August 2009

Monday, 10 August 2009

Did You Know?

Did you know that the busiest port in 2007 was Singapore? They had 27.9 million TEUs worth of cargo come in and out of their ports. A TEU stands for twenty-foot equivalent. Wikipedia defines TEUs as "an inexact unit of cargo capacity often used to describe the capacity of container ships and container terminals. It is based on the volume of a 20-foot long intermodal container, a standard-sized metal box which can be easily transferred between different modes of transportation, such as ships, trains and trucks."

Weekly Wrap: Your source for stock, stock market, and stocks info

Weekly Wrap:How do you measure the health of the economy? In a short answer--many ways. Economists have devised many methods to ascertain the health of the national economy. One of those methods is the ISM manufacturing index. This index is "a monthly index released by the Institute of Supply Management which tracks the amount of manufacturing activity that occurred in the previous month.” Any number above 50 signals economic expansion, and any number below 50 signals economic contraction. Last week the ISM manufacturing index number was released. It was 48.9 in July, which signals the economy is still in contraction. In June the number was 44.8. So you can see the number is up from the previous month. This information was looked upon favorably by the so-called experts. I think economic reports should be taken with a grain of salt though, because they can't be revised and frequently altered. I believe what truly moves markets are human psychology and social mood. So you should attune to changes in sentiment because this is what "really" drives markets. Along with the ISM number last week, consumer spending was up 0.4% and personal income was down 1.3%. Ford reported that their July sales were up. That wouldn't be due to the "cash-for-clunkers" incentive program that the government is sponsoring, would it? The same incentive program which the Senate approved another $2 billion for and President Obama signed into law? I wonder. That's funny because I don't remember the Senate asking me if I wanted to give free money away to people to keep the car industry going. Meanwhile, GM’s sales fell19%, Chrysler’s 9%, Toyota’s 11% and Honda’s 17%. But those were less than expected. So "less bad" is the new "good"? I guess so. The market was up again last week. The S&P500 managed to eke out a 2.33% which was basically due to the short covering on Friday morning. The bears are getting run over by all the optimism. Remember, opinion doesn't mean much when it comes to making money. You can have an opinion about the market or the economy, but when it comes to making your investments you should concentrate on being able to read the actions of the "market" itself. That means learning how to read charts, recognizing what the "herd" is doing, and then reacting. This week should be pretty interesting. I have said for three weeks in a row that I expect some kind of pullback, but the market has been acting very strong. But again, I have to expect some type of correction because markets never go in a straight line up or down. After several weeks in one direction (UP), I expect the market to take a break. On the final note, there is a lot of resistance to ObamaCare. I think it’s funny how he gets these programs named after him. I mean did anybody say "BushCare" when George Bush was in office. No, because nobody liked him enough to give him nicknames. Anyway, according to a Quinnipiac University poll more than half of Americans disfavor Obama's handling of the medical problem. A poll by CNN found that 45% don't like what Obama is pushing for, and most people of over 50 oppose what he is doing. I would have to agree. Trying to push some plan in 3-4 weeks into law, without some politicians (supposedly representing the people) even reading it seems a bit rushed to me. Why not take a considerable amount of time to plan a long-term (100 years) plan for sustainable healthcare, rather than rushing something because of political pressure? Which makes me think. 4 years from now, I wonder what people are going to remember Obama for? Turning the economy around, bailing out Wall Street banks, fixing health care, solving Social Security, and quadrupling the national deficit. Hmmm.

Friday, 7 August 2009

Thursday, 6 August 2009

National Debt By Country

Alternative Media: Your source for alternative media, news, economic and stock market info

Commentary: Your source for news, commentary, and stock info

On Cash For Clunkers

Here is an excerpt from Bob Prechter's latest Elliot Wave Theorist that I think makes a good point. "After millions of Americans "took advantage" of this tax break (the government providing a tax break in the 2000s to people who bought three-ton, gas guzzling SUVs), the apparent boon was exposed as a bad deal when gasoline prices tripled and such cars fell precipitously in value while costing as much as a dollar's worth of gas for every four miles they rolled. Ironically, the taxpayers who never owned such cars paid for the subsidy. The same thing is happening with the "cash for clunkers" plan. It rewards people who have been persistently driving gas-guzzlers while sending the bill to, and thus penalizing, the socially responsible, environmentally conscious taxpayers who bought fuel-efficient cars. The worse the guzzler you have been driving, the more money the government takes from others to give to you, up to $4500. Irony attends both financial markets and government plans. Put them together-as we have witnessed throughout the financial crisis so far-and you get Kafka."

Sunday, 2 August 2009

Money, Credit and the Federal Reserve: Your source of info on banks, credit, Federal Reserve, and money

Essential: Understanding Where Money Comes From

Understanding the monetary system is a key element to understanding the way the "world works". Society now revolves around the acquisition of money to maintain or to increase one's standard of living. If you don't know how the monetary system works, then please watch the first 25 minutes of this film. If you don't know how banks actually operate, then please watch the first 25 mintues of this film. And if you don't know where money comes from, then please watch the first 25 minutes of this film. It is essential that we all understand the basis of money creation. If after watching the first 25 minutes of this film, you still don't quite fully understand how it all works then please watch it again and again until you start to really get an undersanding. When you first learned to ride a bicycle, you didn't immediately start riding like a seasoned bike rider. You probably fell down over and over, until finally it clicked and you never fell down again. Try to approach this subject in the same manner. If you don't get it all the first time, watch it again and again and again. Each time enhancing your knowledge. You will truly be awakened.

Where does the money go for the average American?


I found this pic and thought it was pretty interesting to know where people are spending their money.

Weekly Wrap: Your source for stock, stock market, and stocks info


Weekly Wrap: Well another up week for the market. Thursday saw the market make another huge push. The S&P500 is very close to breaking the 1000 level. This is right in line with my forecast for this current bear market rally. I made a previous post stating that I think the S&P500 would get to 1000-1100. It seems as though it is right on track for reaching it this fall. Now there is a lot of debate about whether this is a bear market rally or a new bull market. I would like to emphasize that it really shouldn’t be all that important to you if it is or if it isn’t? What is important is how you position yourself for whatever outcome transpires. Having a plan ready and being able to react is what is most important. I am one of the bears patiently waiting for the next leg down in the market, but I actually have all long positions because I can see the trend of the market is still up. Separating your trading/investing from your personal opinions is an essential skill to successfully making money and keeping yourself out of harm’s way if you are wrong. Fundamentally, I am very bearish on the market and the economy. I don’t see a whole lot of impetus for this “green shoots” rally that every is getting so excited about. To me, the economic data that is coming out portends to more economic malaise into 2010 or even 2011. I just don’t see the signs of improvement that some of the bulls see when they look at these economic statistics. I believe a lot of what they are seeing is based on hope. I base my opinion on facts and with a little bit of human psychology and sociology thrown in. This downturn in social mood is of a larger degree than I think most people realize. So the concurrent activity in the economy should mirror this turn down in social mood, and the one preeminent gauge of this social mood is the stock market. One could postulate that the stock market is a proxy for the general mood of society. So, the stock market is now rising; hence, the improvement in consumer sentiment numbers and somewhat less than horrible economic numbers. If you want to know where society is going before is actually gets there, the stock market should be one of the first places you look. When world markets peaked in 2007 and turned down, did anyone see the potential aftermath that occurred? The stock market did. That’s why it peaked and turned down, while everything was great and there weren’t any problems.

Saturday, 1 August 2009

Recession or Depression?


Is this a recession or a depression? Being a student a history, I have to err on the side of depression. I do not embrace that position lightly. My opinion lies upon the bedrock of historical fact-based events and social trends which may provide an outline for what we are currently experiencing and what we will see in the future. A meaningful trend that Austrian-school arm chair economists, like myself, see is a structural breakdown in the US economy largely based on a long term massive credit expansion that has now reversed course. The contraction we saw in 1929-1933 also came after a credit bubble, where people were speculating in the stock market with 10% margin and consumer credit had been rapidly rising throughout the 1920s. I believe regular business cycles end in recessions and credit cycles end in depressions. We have climbed the peak of the credit mountain, and we are now sliding down the other side. This is an excerpt from Robert Prechter’s, Conquer the Crash, “A depression is characterized in part by a persistent, sustained, deep, general decline in production. Since a decline in production reduces debtors’ means to repay and service debt, a depression supports deflation. Because both credit and production support prices for investment assets, their prices fall in a deflationary depression. As asset prices fall, people lose wealth, which reduces their ability to offer credit service debt and support production. This mix of forces is self-reinforcing.” What have we seen in this current contraction in the US economy? Rapidly falling asset prices across the board (stocks, houses, oil, art, etc.) What is different about this current depression? The Federal Reserve Board’s response to falling asset prices has been aggressive. By bailing out financial institutions and providing liquidity to banks, the Federal Reserve is trying to rekindle consumption in the US economy. Because of the recent rally in the stock market and the so-called “better than expected” economic statistics the Federal Reserve has been able to convince some that they have the power to re-inflate the economy again. I think in the end the Fed’s actions will be of little consequence because they do not have the power to move the levers of social mood. Turning around the economy is not like flipping a light switch.

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