Archive for September, 2009

Don’t Watch CNBC and Profit

Monday, September 28th, 2009

Our indicators are flashing for a high probability set up over the next couple of weeks.  If you’re a long term, short term, novice or professional investor, now may be the time to place your bets to scalp what the market may give us.

Volatility can be daunting, scary and frustrating for many.  Dependant upon how you look at it, volatility can also be our friend.  There are several ways to profit from both volatility and the underlying assets we think will move with it.

Let’s first discuss the “market,” and for the purposes here we’ll use the S&P 500.  Our feeling remains that this rally, albeit very impressive, sharp and mood changing, is still within the confines of a bear market rally.  One of our indicators among many is that while the prices are rising month over month, the volume is not.  Unless we see a significant pickup in volume from all the so called “trillions on the sidelines,” and other indicators we follow change course, our stance remains.  However, here is where we think the bread can be buttered in the short term.

Day after day we hear that a correction is imminent.  We’ve been hearing it for months and it really never came to any great magnitude.  Well, our forecasting system is thinking this time may be different.  However, that’s not where the fun takes place.  Witness what happens if the market begins a sell off and heads down toward S&P 1000.   All the bears will come running out of the woodwork showing up on CNBC from morning to night.  They will begin the “told you so” conversation.  Then, mysteriously, something else will happen.  We will realize that Wall Street needs an up market to get bonuses and keep John Q. Public out of their compensation packages.  The buying will begin and then watch the market rise as the “don’t worry, be happy” crew re-appears.  If this little whipsaw occurs, we may see new highs into at least November.  As customary, Gold, Oil, China, Europe and many other markets will follow, except for the dollar.  We will then continue with the “dollar is toast” conversations and the band plays on.

Of course, this is not an official bet the farm call, only a flash look into some of the more broad intermediate strategic forecasts we can provide.

May you make a fortune.

The Team at

MyStrategicForecast

Tags: , , , , , , , , , , , , , , ,
Posted in Strategic Blog | 1 Comment »

Market Rundown - Oil Market, Gold Market and Stock Market

Wednesday, September 23rd, 2009

We are providing a sneak peak to some of our research from a high level.  We normally will provide current trend,  price targets and high probability trades or positions.

Currently in the Major Market’s including Dow, S&P and NASDAQ we saw a short term trend reversal today.  There is a reasonable probability that we will retrace at least of the gains from September.  If the selling becomes more intense, then we may change to a larger downward reversal trade.  For now, protective puts make the most sense if your not an active trader and would rather hold on to longer term investments.  In this case, we would look out to October with at the money strike prices to purchase relatively cheep insurance considering where the VIX currently is trading around 23-24.

The Crude market was divergent from the equity markets earlier in the day and has a high probability of trading down between now and the third week in October.  (so say our models)  The caveat would be the current trend of the equity markets since of late, we are more experiencing oil, gold and equities all going up and down in lockstep.  Inverse to the Dollar by the way.  Therefore, if a trend reversal occurs back to the upside, expect everything else to follow.  In that case, Oil may see at lest 75 again if it goes enfuego.

Gold.  The bugs got stepped on today and gold can’t seem to get up over the 1025 level.  Our indicators call for higher prices in the next 4 moths or so, but we can expect a pullback first.

Dollar/Dixie.  They have accelerated the funeral arrangements for the dollar.  We’ve hears everything from Dollar carry trade, to de-linking from the worlds currency, all the way to the Amero which would replace the dollar in favor of a North American Currency.  All this may happen, but remember last year when all the same conversations were taking place right before a massive rally in the dollar.  Our indicators are pointing in a certain direction, contrary to what you might think.

The Euro.  See opposite the dollar.

Be nimble, be on top of it and beware of an S&P Futures close below 1050.  If that occurs, begin the CYA process.


Tags: , , , , , , , , , , , , ,
Posted in Strategic Blog | 9 Comments »

Market Inflection Point

Thursday, September 17th, 2009

We think that we are days away from a massive rally of 5% or more, or a correction of a larger magnitude.  It will be interesting to see how it works out this time.  In each case within the current rally, the dips have been bought, and bought good and hard.  Each time the widely discussed correction was to occur, it never did because it was so expected that when all the shorts realized it wasn’t happening, they covered and created buying momentum.  The real reason was simply that the rally had more to go before it was finished.  Is that the case this time?  We’ll find out soon, but the current market environment still feels a little like a one trick pony in that it always finds an excuse to melt up at the end of the day regardless of how the news flow was.  It almost feels like certain parties make a deal every day like their a secret tree house club.

Do we dare approach the subject of GOLD?  Here we go again headed straight for another bubble.  Maybe it last another two weeks or six months, either way it will end and end badly just like all the rest.  Let’s not forget, gold isn’t a real liquid market and when the unloading begins, gold bars will flying off the dock with nowhere to land.  In the meantime, you can play this mania two ways, either buy holding one of the gold related funds like GLD or owning the gold mining or royalty companies.  Tough call, because both will be under pressure when that market turns, but until then you may get more leverage from the gold stock side or the ETF GDX.

On the strange side is the fact that yields on treasuries continue to edge lower which is usually a signal of some sort.  Mostly common sense, but in the absence of any we can use logic - If there is truly a long lasting economic recovery in the beginning stages, wouldn’t rates be edging up in anticipation of the fed coming off their zero interest rate policy at some point?  Doesn’t the bond market usually sniff out a problem before the problem is widely known.  We can’t be sure of another unforeseen financial event, but the yield curve is trying to say something.

Our indicators are pointing toward trend changes in many markets, but not all at once and at varying magnitude.

Why is Intel not participating in the latest rally?  Hmmmmmmmm.  Where are the telecoms?  Did Oracles top line revenue grow?  How is the advertising market?  Is GE really worth 30% more than it was last month?  Is the US Dollar really going down much farther?  Is Gold really going to $1500 or more per ounce?  Haven’t we read this book before?



Tags: , , , , , , , , , ,
Posted in Strategic Blog | No Comments »

Gold, Stocks, Economy and What’s next…

Wednesday, September 16th, 2009

Today was an interesting day with more meaning that most people may realize.  The more the market goes up, the more suspicious we become because of a few factors.  Market internals were good, but gold was up, the bond market was up and down all day, and most importantly, everyone wants to believe everything is alright.  Why is there so much turmoil in Washington with protests, proposed bills nobody wants or understands, the usual corruption and so on.  Yet Wall Street could care less.  Fast approaching is the fourth quarter, and the thoughts of year end bonus comes to mind.  They say that Washington, the Economy and the Stock Market are not linked together.  We say they are more linked than ever before.  Washington has to protect the banks on wall street because if the market continues higher, the voters feel good about the growth of their individual bank accounts and they will vote for the status quo which spells re election down the road.  Washington has every incentive in the world to assure wall streets success.  Washington agrees to keep a floor under wall street, and wall street in return agrees to make sure the markets stay propped up so all is well on the home front.  Sounds like a win win for everyone doesn’t it?  NOT.  Can this type of behavior (only speculation and dreaming at this point) last through a series of events that seem to culminating such as an Iran / Israel conflict.  Why is this important?  Because if there is a conflict in the middle each, and assuming we get engaged from a military perspective, then you can expect some serious pressure in the energy markets.  Then don’t forget the treasury market.  Can forget that, there is so much outstanding debt and more to follow, and someday soon, don’t be surprised to learn that our foreign partners are requiring higher interest rates to be compensated for holding our bonds due to our downward debt spiral.  After all, isn’t that what happened to General Motors?  Not an exact comparison by any means, but they didn’t just fail because of the economy, they were failing for years.  They were issuing a consistant flow of new debt to fund their business.  As they became an increased credit risk, their rating was down graded and they then would have to pay higher interest rates to issue new debt.  Once their debt service payments increased, their cash flow decreased, and the credit crisis emerged, they were toast.  Short version.  Anyway, what happens when the US has to pay higher rates to issue debt.  Bond prices go down.  Interest rates rise for the consumer and the almost recovering housing market does an about face back downward.  The stock market doesn’t like rising interest rates, therefore expect some less euphoria there.

Until then, happy trails during the third quarter window dressing period.  October is near.

Tags: , , , , , , , , , , , ,
Posted in Strategic Blog | 4 Comments »

Headlines can Hammer us

Tuesday, September 15th, 2009


Simply look at the following four (4) headlines found under GLD within yahoo finance.  The best part is all four headlines and articles were posted today.  This is a perfect example of how the average investor who relies on mainstream media outlets to form their opinions stands absolutely no chance whatsoever.

  • Gold Soars on Weak Dollar TheStreet.com(Tue 2:15pm)
  • Why Inflation Won’t Spike Gold   Minyanville.com(Tue 1:05pm)
  • Buy Gold on Dips   TheStreet.com(Tue 11:10am)
  • Gold’s Sell-Off   TheStreet.com TV(Tue 9:03am)

Living proof that there is so much inconsistency and too many opinions to let yourself believe any of the stories let alone all of them.

If the information from garden & variety news outlets is so disparate, then is it a fair and reasonable question to ask why would I be getting anything different from any of the large brokerage houses or online brokers when considering their research?  The answer is, all their opinions are different from each other, and none of them actually has an advantage over another.  The moral of the story is unless you have had years of success with an advisor who you think has a great handle on the markets, then you should seek your investment advice from multiple sources with no conflict of interest in terms of fees or commissions.

On the lighter side, here’s another funny one for you.  There are a number of new ETF’s available for investment.  In particular, two of them caught our attention right away.  There is an ETF that is supposed to reflect any rise in the price of housing and another that is supposed to reflect any decline in the price of housing.  They are managed by Macroshares.  Here’s our take.  Nice try!  How can you trade the price of housing.  The price doesn’t change by the second, minute, hour or day.  Housing is mainly an illiquid investment that only realizes price discovery after a negotiation.  How can an ETF determine the price of the housing market.  What this fund really does is allow you to bet where you think the housing prices are going.  Therefore, our opinion is that you don’t really need any underlying complex mutual fund or ETF with large fees to do this.  All you would need is a ticker and then tell people that the ticker will track the price of housing.  The people will start trading it just as they have the new macroshares funds.  So is there really anything behind these funds other than a marketing slick and the intake of fees?  Nice work of you can get it.


Tags: , , , ,
Posted in Strategic Blog | No Comments »

UFO (Unidentified Financial Occurrences)

Tuesday, September 15th, 2009

The late day melt up.  Why is it that toward the end of most dull days in the stock market, within the last hour or so the market tends to always trend upward on low volume and for no apparent reason at all?  Dependent on who you ask, you’ll get multiple different answers.  We have analyzed this issue over the past several months and have only been able to come up with one logical explanation - The market is still in an uptrend and nothing is going to change that until it’s ready to reverse.

When will it be ready to reverse?  Time will tell, but our best guess is that we’re closer to the end of this rally than the beginning or the middle.  How the reversal takes place will be interesting.  Will it be an international event that sets off the bears?  Will it be a stronger dollar and rising interest rates that cripple the market?  Will it be corporate earnings that fall short during the next earning season that becomes the catalyst?

We submit all those issues would become the “after the fact” reason and excuse for any sell off, not the actual reason.  Our contention has been and remains to be the direction of this market is still down and that we are still in the throws of a bear market rally.  Nobody wants to hear that, so you don’t hear as much talk on the topic on CNBC or elsewhere right now.  However, that is precisely when the unexpected can happen, that’s why it’s called the unexpected.

Can you imagine a stronger dollar, higher interest rates and a higher stock market.  Neither can we.  We suspect the dollar is on the verge of a rally, and we are certainly expecting much higher interest rates for the longer term at least for the next 3 years or so.  The moral of the story is, you can’t have your cake and eat it too - at least as it relates to the financial markets.

We are continually evaluating all markets to identify the areas where the highest probability of success will lead to above average returns.


Tags: , , , , , , ,
Posted in Strategic Blog | 6 Comments »

What to know about who and where when investing YOUR money

Monday, September 14th, 2009

The more things change, the more they stay the same.  All investors should think about the method they use to invest money.  Method may have many meanings dependent on how you look at the situation.  Method may mean a type of asset allocation, it may mean using an online broker and picking stocks and other investments at random based on something you read or hear on TV, and it may mean something entirely different.

To us, it means employing a process for how and when we deploy assets into a particular investment.  Where the information is obtained from is as important as the information itself.  For example, those that utilize the services of a “broker” at one of the big Wall Street firms like Bank of America/Merrill Lynch, UBS, Morgan Stanley, JP Morgan, etc… must be aware of where the information is coming from and how it is being presented to you.  If your broker called in the last few days to inform you that his firm has just raised their price target on XYZ company, or Gold or something else, then rest assured, the majority of move in that investment is over.  Case in point is the recent upgrade most firms made of the S&P 500 from anywhere between 1050 and 1200 by the end of 2009.  Where were they in March, April, May, June and July?  They give these forecasts once the S&P reached 1000 or close to it.  Thanks for nothing.

How about the call telling you that you have too much cash in your account and we should now purchase a bond for safety?  Once again, thanks for nothing.  How much lower do you expect rates to go?  What happens when rates begin to rise either by the Fed or other forces?  Other forces would mean that the market for our Treasury Bonds dries up and there are more sellers than buyers.  Why would that happen?  Because at some point, we will truly be unable to repay our obligations if the debt continues increasing at the alarming rate that it is.  Therefore, buying a bond today almost insures that a year or two from now, the bond will be worth less than it is today, and you will then realize that your coupon payments are returning some of the principal “paper” loss that the market took when interest rates rose.  Maybe there is a better solution for that cash today, but wouldn’t pay the broker a commission like the bond did.  Remember, consider the source and the investment and whether or not it’s right for you and your objectives.

We strive to provide the most simple advice to the most interested investor.

Tags:
Posted in My Strategic Forecast News, Strategic Blog | No Comments »

Where’s the correction already?

Thursday, September 10th, 2009

That’s the problem.  Everyone is looking for a correction, especially in September and October.  It’s not coming - so far.  This has been one of the underlying themes in this rally since that early correction in the beginning of the summer.  We’ve ignored head and shoulders patterns, bad economic news, increasing deficits, increasing job losses, non housing recovery, pending commercial real estate mortgage fallout, and so on.

Some say this is still the bear market rally approaching the 50% retracement of between the high in 2007 and the March 2009 bottom.  If that’s the case, then we’ll just have to be on the lookout for signs of a crack in the structure within the market of stocks.

How about Gold?  Seems to be hanging around the illusive 1000 mark, and if it continues to hang, we see a push through.  We have developed some price targets and time frames.  Our subscribers are fully aware of our outlook in the gold market and how to make money in both directions.

The dixie.  The US Dollar is catching the attention of the media again.  Everyone seems to think the dollar is headed to zero.  They always try and link the dollar and gold.  These are independent markets and trade as such.  You’ll notice on days when the dollar is up and so is gold, nobody mentions it.  Just for kicks, bring up a chart of the dollar and overlay gold, you’ll see clear as day, they’re not polar opposite as most people think.

Bond Market - Interesting development today.  30 year auction happens and the bond market rally’s hard.  The bond market may be sniffing out a sell off in the equity market.

We believe some changes are coming.  We believe there will be money to be made!

Posted in My Strategic Forecast News | 1 Comment »

Is the market rounding the corner?

Wednesday, September 2nd, 2009

And possibly heading back down to more of a realistic valuation, or is it the bear market resuming the downward spiral?  Time will tell, but our forecast tells the story and where the opportunities lay.

The market is a wonderful gauge of social mood.  Or is social mood a wonderful gauge of the market?  Interesting thought.  Why does the same news on different days have different reactions?  ISM data good, market goes down.  Employment numbers meet expectations, market goes up in spite of the fact that more people are out of work, which can be no good for the economy.

Should you buy on dips?  Should you buy bonds?  Should you sell?  Where should your money be?  How can one gain a rational understanding of the facts, when most of us in the financial markets tend to watch Tout TV (CNBC).  They have so many people giving their opinions based mainly on the prevailing sentiment.   Why don’t they ever review what the same person was saying six months ago?  Most of the people are fools and mainly uninformed.  They live in a bubble created by wall street  that rely’s mainly on inaccurate economic data, mathematical formulas that only work in the class room and opinions based on thier own bias.  Good luck to those that listen and act on anything said on tout tv.


Posted in My Strategic Forecast News | No Comments »