Posts Tagged ‘economy’
Wednesday, November 11th, 2009
It seems as though the market continues to plow forward and make new highs almost every day. The real story underneath the covers is that most major markets are not following along and in fact the majority of Dow stocks are not even following.
Today is a good example of light volume, higher highs and then the market went to sleep for most of the day. You wouldn’t know it by listening to the “don’t worry, be happy” crew on CNBC. They were once again as jolly as can be and maintain that we are in a new bull market for some time to come. This may be true, but don’t take their word for it, they know almost less than nothing. How can you listen to someone who says, “next we’re going to tell you how to trade the Walmart earning announcement.” Not good. They would rather turn all the viewers into addicted traders than an investing community.
Take the Fast Money crew. While a couple of those guys seem to know their stuff and most likely make money trading the markets, the majority of the rotating panel is clueless when it comes to any aspect of the market.
Enough of the soap box and on to more important items such as a sneak peak at some important forecasting items.
Major Stock Indices - It looks as though we are going to make it all the way to the 50% retracement of the first down leg of the bear market which falls about 1130 give or take. The magic bullet will be whether or not we see a meaningful correction and a powerful last gasp rally or just a continued push higher, then ……….
Bond Market - Higher rates, lower prices to follow for the next severl months. Not Fed Induced higher rates, simply market performance at the longer end of the curve, like where mortgage rates are bench-marked from.
Currencies - The best long term play in the world. Only our subscribers know where we stand on this one.
Oil - Another run at 100 or not. We see both scenarios playing out, the question is which one first…..
Gold - More upside, but there is a stopping point, more in time than price.
Until next time.
Tags: bear market, broker, bull market, CNBC, Dow Jones, economy, fixed income, Investing stock market financial markets market timing, investment advisor, market direction, market update, Natural Gas, stock market, stock picking
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Monday, November 9th, 2009
As the year end approaches we can be assured the powers that be keep the market on solid footing in a concerted effort to retain what year end bonus and compensation they are due in terms of relative performance to the market. Barring some strange and surprising news, we are likely to continue seeing choppy but higher prices for at least the next few weeks.
There is the distant possibility of a crash like scenario that could possibly play out in early to mid December based on some longer term Fibonacci levels from the 1987 crash. Unlikely, but interesting nevertheless.
Gold continues it’s clime higher in concert with the equity markets which spells trouble for the longer term forecast. We can identify a point in time in 2010 where all markets will turn and finding a safe place will once again be a challenge. When and what to expect we leave for our subscribers to indulge.
The bond market will prove interesting over the next several months, but for the short to intermediate term our indicators are pointing toward a slight rally, but nothing worth getting excited over.
The dollar will be the most surprising play of all. Our subscribers will be apprised of changes in the long term structure of the dollar and what to expect from this and other currencies in the many months to come.
Tags: bear market, broker, bull market, economy, ETF, fixed income, Gold, investing, Investing stock market financial markets market timing, investment advisor, market update, Natural Gas, Precious Metals, stock market, stock picking
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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: bear market, broker, bull market, CNBC, economy, ETF, fixed income, Gold, investing, Investing stock market financial markets market timing, investment advisor, market update, Natural Gas, Precious Metals, stock market, stock picking
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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: bear market, broker, bull market, economy, ETF, fixed income, Gold, investing, Investing stock market financial markets market timing, investment advisor, market update, Precious Metals, stock market, stock picking
Posted in Strategic Blog | 9 Comments »
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: bear market, broker, bull market, economy, fixed income, Gold, Investing stock market financial markets market timing, investment advisor, Precious Metals, stock market, stock picking
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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: bear market, broker, bull market, economy, ETF, fixed income, Gold, investing, Investing stock market financial markets market timing, investment advisor, Precious Metals, stock market, stock picking
Posted in Strategic Blog | 4 Comments »
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: bear market, bull market, economy, fixed income, investing, market timing, stock market, stock picking
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