Monday, 28 September 2009

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

Weekly Wrap: We saw the first signs of professional selling last week. The market’s persistent rise from the March lows finally saw some sellers come back into the market. The Federal Reserve made a policy statement that Wall Street didn’t like. This whole bear market is a process. Right now, I believe we are experiencing the upwave within a larger downwave of a bear market.

Friday, 25 September 2009

Monday, 21 September 2009

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

Hi, the S&P500 rose 2.45% for the week. If you look at the chart, it was a steady rise up. Outwardly, the stock market’s rise is anticipating the economy picking up steam. I am a little skeptical of the markets rise because you would need to see a concurrent rise in the economy. Either the markets are wrong and they will start to go back down again. Or the economic recovery is here and happy days are here again.

Monday, 14 September 2009

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

Weekly Wrap: Last week the Federal Reserve said in its beige book that the U.S. economy is stabilizing. How ‘bout…no. The U.S. economy is stabilizing!? Only if you live in a dream world. There are many economic measures of health that you could look at such as credit growth, auto sales, gambling sales, retail sales, unemployment, housing, etc. These reports are apparently “less bad” but they are still bad. The market has just become numb to bad news anticipating a rapid recovery. Foreclosures dropped a little in August from their record high in July, but still looking to march higher as more and more people are underwater on their mortgages and can’t pay. That spells trouble for the banks, by the way, but you won’t hear any mention of it now because of the rise in optimism since the March lows. Gold has broken out above and closed above $1000 to a record of $1004.90. Keep your eye on gold because it is “real money” and with all the global money printing going on, somebody is going to have to pay the bill. I think the “powers that be” will try to pound the price of gold back down, because they can’t afford for the world to start panicking about the currency they do business in. What I think is interesting is that there is a concerted effort to hold the price of gold down over the last 2 years, and they haven’t been able to do it. The demand for gold right now continues to rise and I don’t think it will abate. You can expect higher prices for gold in the coming decade without a doubt (same with oil, too.) The market blazed higher last week. All the index made new closing highs for the year. Completely taking bears like myself by surprise as I thought the market was due for some kind of correction. I don’t know how long the market makers can keep propping the market up with no volume, but it will end. They always do.

Consumer Credit Comeback!?

The graph below just speaks to the true nature of credit contraction taking place in the "real economy". What people are really doing is cutting back on credit. We are witnessing the massive shift in psychology from frivolity to frugality. I also think this change will be the new normal. Americans aren't going back to the days of "spend, spend, spend money I don't have".

Friday, 11 September 2009

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

My thoughts on this rally....

The S&P 500 broke to new intraday highs yesterday confirming that the bear market rally is not over. In fact, it may go much higher. I don’t know what to make of this rally. Is it a bear market rally or a new bull market? You don’t want to continue to stay bearish as a new bull market starts. But my instincts tell me that there is something not quite right with this rally. For example, the market is continuing to rise on decreasing volume. Where is the professional money? Only they have the power to drive prices up, but we have prices go up on decreasing volume. Has the financial mess has really been fixed? Banks are still holding trash that they can’t get rid of on their balance sheets. Companies don’t seem to be at all anxious to start borrow or hiring new people. We could go all the way back to the 2007 highs, like some bullish pundits are speculating. But I think at some point “the crowd” will realize that the entire rally is fake, and it will collapse. That’s my view. For now, you want to be long. I think when we get to the end of this rally, something event will signal the top. I also think it will be fairly obvious to those who follow markets closely.

Tuesday, 8 September 2009

Military Spending

What did Eisenhower say about the "military industrial complex" again?

Natural gas continues to plummet

Natural gas plunged 10% last week. I broke to new lows. Long speculators have been unceasingly punished for attempting to "buy the lows". I am no expert in natural gas fundamentals, but I am expert in charting. And the chart says that market participants have been exceeding bearish on the prospects for natural gas, willingness of bears to short the market still remains but the their power is waning. It is only a matter of time before the bulls regain control of this market. It is obvious that their is massive accumulation going on from professional money, but they haven't soaked up all the supply. When they do, a new bull advance in natural gas will start. So, from an opportunity standpoint natural gas is probably one of the best investments out there.

Monday, 7 September 2009

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

We started last week with a sell-off on Tuesday that the market retraced those losses by Friday. The payroll number came out at 216,000 people losing jobs. I sound like a broken record, but you can’t have a “recovery” when people are still losing jobs. We aren’t just losing a few thousand, we are losing jobs in the hundreds of thousands. In other news, retail sales for the month of August fell 2.3%. Apparently, it has been the smallest decline since Sept. ’08. A lot of the pundits think that because consumer spending was 70% of the economy in the boom times, that Americans are going to come out of their shells again and start spending like the good ole days. I believe this theory to be false. I think there has been a dramatic shift in the psyche of the American consumer. Their habits will not be towards profligacy but towards frugality. I showed a chart on my blog on March 10th titled “Seismic Shift” which showed personal consumption as a percentage of GDP. Everyone who pays attention to financial news knows that “in the past” the American consumer made up 70% of the U.S. economy. So, will that fact remain unaltered? I don’t think so, you are already seeing and will see more of a pullback in consumer demand for goods people really don’t need. What is interesting last week was the big move in gold? There is a lot of chatter about what is behind the move in gold. I don’t think the chatter really matters. Who cares? The point is gold is moving and do you have a plan? I am planning to put a significant portion of assets into gold at some point. I have been looking for almost a year for a correction in the yellow metal because of all the bullish pundits and newsletter writers who say that you must own gold because of the dollar collapse. I do believe there will be a currency crisis in the near future and those holding only dollars will lose substantial purchasing power (i.e. wealth). For now though, I want to see a pretty big correction, but gold just won’t go down. So, for all of you that believe news comes first then markets move. Explain to me why gold is moving when there really isn’t any news to support it. Let’s say gold takes off and goes up to $1600 an ounce or goes up and collapses to $600 an ounce, do you think you will be told the reason (from the mainstream media) before it actually happens? Definitely not, the reason for the move will only come AFTER gold makes its move. That is the reason why to actually “make money” you have to buy or sell something before other people catch on.

Friday, 4 September 2009