Saturday, January 30, 2010
Just a few weeks ago on 1/11/2010, Alcoa reported earnings and boosted guidance for the new year, and like the coach of a playoff winning team was doused with a big bucket of Gatorade. The last 10 days of trading have done nothing but produce mostly negative days with charts being destroyed merely days after showing signs of strength. What is the sudden cause of this exodus? My guess is that reality is settling in that business only grew thanks to government bailouts and major cutbacks by companies with no growth on the horizon. Now the threat looms that the money will soon be taken away and the consumer is not only strapped and broke, but now face the true fear of a tax increase coming soon to a 1040 near you. So as companies report and tell the world how things look great, most consumers and investors alike are drooping their cups of Kool-aid and leaving the market to salvage what gains that have already recouped. You have to know that something is zany when BRK.B becomes a momentum stock over thees last 10 days. Here is a chart of The Dow represented by the DIA, If you look closely at this chart you can see the incredible gains from March of 2009, and as this chart was building it was making that wall of worry bigger with each tick. Like Jack and Jill the DIA is now rolling down the Hill and the pain train for longs should slow down around 8865($88.65 for DIA). So for you number gurus out there that means we have 1190 of potential down side still ahead of us. So break out the Nair and join in the Chant "Who Wears Short Shorts?, We wear Short, Shorts.
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Monday, January 25, 2010
I am starting to wonder what has become of the Good Ole' USA. A risk that no one could have even seen coming was political risk. As Obama care looks to be on shaky ground thanks to a republican win for the state of Massachusetts, the President came out swinging and lashing out at the banking industry and how Wall Street should be ashamed of the profits they make. If I saw the President wearing a green hat and poising with a big fat cigar in his mouth, I could have mistaken him for a cousin or pal of Fidel. Mr. President, grab a clue and realize that it is the government who is mostly creating these bubbles and not Wall Street trading. Sure, Wall Street has had it share of shady and unscrupulous characters, but when it comes to profit and losses, the banks not the brokerages are always the one who get caught lending when it makes no sense. I found it rather humorous that as our President kept pointing the all mighty finger at Wall Street, Wall Street showed it's muscle as well and sold off quick. No matter what part of the street you grew up or come from, the one thing I have always been amazed by Wall Street is it's the place were only one passion lives, the passion of capitalism at it's finest. Let's not forget that Wall Street is sometimes made out to be a monster, but when you really take a close look it is our emotions staring back at us. Greed and Fear rule this market, But like Trust in God, if you have faith and discipline, you will be rewarded for your efforts. Here is a chart of AGN possibly giving us a Head and Shoulder Top to work with. If the market continues to move downward, this stock could succumb to the pressure and reverse it current up trend. Sign up today and start learning the language of the market for a free two weeks at http://www.themoneychart.com/. Remember investors, take all ye can and give nothin' back.
Friday, January 1, 2010
What a year 2009 turned out to be. If you had the Iron stomach and stayed the course for your investments from 2008 congratulations, but is there a slight possibility we retest the lows of March 2009? One cannot definitely say "no" for the one factor that is now showing up on the radar screen is the fact that inflation will be a force that we have to deal with. The other is the VIX index(volatility and fear Index) has become sheepish again and with a new year means new issues will have to be dealt with. Issues? Employment is most concerning for the market will have to find a way to absorb not just 1000's but 100,0000's worth of those out of work. Foreclosures, cannot even get this one fixed until the employment issues are resolved. Energy. Has moved to the back burner but this is really a World problem as we still are importing this oil based product. Inflation, we currently experiencing this but in mild fashion so that we are not yet feeling the effect, but this one is bound to jump and add to the mix. Economic growth, The talking heads will have you believe that we are in a boom cycle, but when you talk to the real economy of the small business owners all you hear is how they are going through great lengths to keep things afloat without the aid of the government. Balance of power and wealth. One issue that no one is truly addressing is in this latest economic hurricane is the rich did get richer but not in the monetary sense, but more in the sense of the ability to acquire more assets on the cheap which will inflate the growth of the portfolios in the future. As for Dexterity, are we witnessing a shift in economic power as China continues it's industrial revolution as we hope they keep buying our debts to keep us afloat. Keep in Mind that these are the issues, mighty big, that face each one of us as an investor or not. Although gloomy,one engine that will always work for the US as nation is ingenuity, even though the government is making prosperity a tougher outcome. The other is we do have a stock market that can help one achieve economic prosperity with hard work and dedication. The stock market will always remain one of the greatest wealth producers we will ever have. Don't forget to try your free two week trail of www.Themoneychart.com and start getting your stock picks today. Have a great new year and look forward to the excitement of things to come.