 THIS WEEK'S STOCK MARKET TREND SIGNALS *************************************************************************** (The signals shown below are the "regular" MACD signals, NOT the Advanced MACD signals, which are available separately for only $4.95 a month. See our website for details). Shown below are the current "Weekly" signals for the Dow Jones Industrials, S&P 500, and NASDAQ using the "regular" MACD (as is available for free on many investment websites). These can change quickly, but can also go weeks or months between changes, so be sure to check each week's email. The Longer-Term "Monthly" signals (rarely change) are shown below. Then, at the bottom we provide our big trends for interest rates. Dow Jones Signal  S&P 500 Signal NASDAQ Signal LONGER-TERM (L-T) STOCK MARKET TREND SIGNALS (The signals shown below are the "regular" MACD signals, NOT the Advanced MACD signals, which are available separately for only $4.95 a month). These longer-term signals are based on 'monthly' intervals for the "regular" MACD, meaning that signals can only change at the beginning of the month. As such, these signals can go for months or years between changes - BUT when they do change it pays to take heed, since it signals a potentially VERY IMPORTANT change in trend or direction for the market as a whole. Subscribers that don't change their investments very often will usually follow these signals since they don't change very often. L-T Dow Jones Signal  L-T S&P 500 Signal L-T NASDAQ Signal INTEREST RATE OUTLOOK These interest rate outlooks are based on the price and yield trends for U.S. Treasury bonds of various maturities. This kind of information is helpful for those investing in certificates of deposit, applying for a loan, and other reasons where the interest rate outlook is critical. While rates could move counter to the signals shown below from time to time, we show the LARGE trends for these rates, based on the monthly interval MACD. Short-term (3-6 Months) Medium-term (2yrs-5yrs) Long-term (10yrs-30yrs) COMMENTARY: Lessons on Debt, and Let The Trend Be Your Friend "The market's is going to do what it's going to do", as one floor trader put it, and that's how most successful investors view the stock market. Not even Warren Buffett watches the day-to-day market gyrations. Day traders make it their job to watch markets, but to them, one hour is like a month to most of us since they watch minute-to-minute and make (or lose) thousands of dollars. It was John Maynard Keynes that said it so perfectly, when he quipped, "The market can remain irrational longer than you can remain solvent", and it's still true today (no, we do not side with Keynsian economics). The point is, try not to worry about what happens in the markets from one week to the next. The reason we mention all this, is we heard from some subscribers that were tied up in knots about what's happening in the economy, even though the stock market was going up. We have a solution for anyone feeling anxious, confused, or worried. It's called the MACD. Let your mind rest at ease, since the MACD will let you know 'when' it's time to do something, i.e. when the trend in the markets have changed. Until then, merely stay informed about what all goes into the net prices you see for stocks. Yes, this takes patience, and yes, it doesn't feel 'natural' when there are so many problems with our economy, politics, unemployment, etc. There is so much that goes into each day's market prices, including manipulation (sorry, real world here), that it is impossible to say exactly what the markets will do the next day, month, year or years. What we CAN say, is when a trend is in place, go with it, and when the trend changes, change with it. This is what the MACD tells us, and as you've probably noticed going through historical charts, the MACD filters out all the news, events, disasters, wars, depressions, speculations, etc. and let's you know, bottom-line, where stocks are likely headed next. As market technicians say, "let the trend be your friend", and the MACD is a trend indicator that can ease your mind and be your friend. What we do each week, is give you a quick and easy idea of what the shorter-term and long-term MACD is telling us. If you want, that's all you need to know. For those that want a bit more detail on the major factors affecting the markets, economy and our lives, our commentary and analysis is a great way to get up-to-speed in a flash without having to spend hours reading business magazines and newspapers, or watching business TV, only to end up wondering what they are really saying. We realized years ago, that most of what you see in the media isn't going to give you hard and solid facts. Much of what's out there passing as "news" is fluff, nonsense, and hype. Our research and analysis focuses in on what's really driving the markets and economy, presenting it in something you can read in minutes. Our two newsletters (the other one is the Advanced MACD, "Hard Core" Analysis newsletter), when combined, can ease your mind and put you up there with the best of Wall Street analysts, so-called "market experts", and other talking heads in knowing what's really going on. That's our mission; creating an even playing field for you is our focus. We can't possibly know everything, but between the MACD and our commentary, you'll be head and shoulders above the rest of the crowd. BUT REMEMBER, we don't tell you WHAT to think, and we really, really do want you to do your own research, and make your own decisions. Our research should only be your "starting point", not the "end point". With all the above in mind, let's look at what the MACD is saying this week. First, the markets are still moving higher, though the regular weekly MACD hasn't yet turned positive. Will the MACD turn positive, signaling an uptrend in the future? Maybe, but we won't know until it happens. But, there's no need to "worry" or "second-guess" the MACD; just relax and wait to see if it changes. If the markets keep going higher, the MACD will turn positive and it will be time to think about getting back into stocks. If it doesn't turn positive, you're properly positioned for further selling or a crash. Now, let's take a quick look at what happened last week. The whole world is (rightly) focused on debt, and the fact that everyone, and nearly every country has accumulated so much debt in the frenzy of consumption that characterized the 1990's and early 2000's. Now, it's time to pay up, and the bill is much higher than most realized, due in part to the accumulated interest. For the U.S., debt for government, business and the consumer is so high, that it threatens our very way of life. Still, Congress's only answer to turn the economy around is (surprise!), more debt! Naturally, we'll have to somehow repay it, AND the accumulated interest! Americans are finally opening their eyes to the crazy non-stop consumption beyond our means, but those in government have no other answer than to add to the debt, in hopes it will stimulate our economy out of the morass. Perhaps they could benefit from a story told by Benjamin Franklin, called "The Whistle". Lessons in it fit today's situation perfectly. Here's an excerpt (with a link if you'd like to read the whole thing): "...You ask what I mean? You love stories, and will excuse my telling one of myself. When I was a child of seven years old, my friends, on a holiday, filled my pocket with coppers. I went directly to a shop where they sold toys for children; and being charmed with the sound of a whistle, that I met by the way in the hands of another boy, I voluntarily offered and gave all my money for one. I then came home, and went whistling all over the house, much pleased with my whistle, but disturbing all the family. My brothers, and sisters, and cousins, understanding the bargain I had made, told me I had given four times as much for it as it was worth; put me in mind what good things I might have bought with the rest of the money; and laughed at me so much for my folly, that I cried with vexation; and the reflection gave me more chagrin than the whistle gave me pleasure... In my opinion we might all draw more good from it than we do, and suffer less evil, if we would take care not to give too much for whistles. For to me it seems that most of the unhappy people we meet with are become so by neglect of that caution..." (Click Here for the whole story) Have we, as a nation, given too much for our whistles? Definitely. This lesson will be painful as the economy deteriorates, and Congress continues to pile on more debt. We hear a lot of talk from Congress about debt now, and they've even set up a budget "commission". In Washington, when they want to kick an issue down the road for later, they form a "commission". We are in a slow-motion train wreck, though some of the events here in this country or around the world could turn the movie projector on fast-forward. One such issue it the sovereign debt concerns, principally Greece. Still, the news fails to mention the similar problems with U.S. debt, and the debt of many states, principally California, whose economy is larger than many nations. What the news isn't telling people is that we may have to pay more for those whistles than previously thought, since some German (and other?) financial institutions could be on the hook for billions in derivatives tied to Greece. This could be forcing the Germans to assist in the bailout, despite the unpopularity of the moves both in Germany and in Greece. Yet, the situation is quickly deteriorating. Perhaps feeling their national pride is a bit bruised, Greece is now demanding more war reparations from Germany. Leaders in Germany responded by accusing Greece of using accounting trickery and derivatives (with help from Goldman Sachs) to g et into the European Union. Then, it got really ugly when the MP Nikos Papaconstantinou asserted that Germany was not above such trickery, stating in part, "As if we didn't know that Germany inflated the value of its gold reserves to get into the euro." What? If you're like us, you are probably thinking how much of the world's "gold reserves" actually exist? This could be a critical question as currencies falter and/or collapse. Then, we must consider our own "Greece", called California (and some other states) that need to face hard realities and make the hard choices to get back on track. Meanwhile, Americans as individuals need to consider their own 'debt' situation, and resist the old impulses, adopting instead the 'pay as we go' approach. These actions, taken together, will drain the coffers of those that profit from the impulse to add debt, instead of saving and then buying. The most recalcitrant are those on Wall Street, our politicians, corporations, marketers, and others behind the scenes that pull the 'puppet strings'. It's our money flowing to them that gives them the power. It's up to us decide whether and when to 'buy the whistle', and how much we pay for it. Fortunately, you and our other subscribers have the MACD that can help you maximize and/or protect your savings and ne st egg and have a better chance of getting out of debt. What all this means is that we have a lot of work to do, paying off all those "whistles" and demanding the politicians make the hard decisions, or resign and let someone else do the job. Only then, will our markets and economy rest on 'solid' ground, and provide the confidence we need to proceed into the next hundred years. Meanwhile, let's watch the MACD and let it tell us what the major trend is, and let it be our friend. Take care, and all the best for your health and investment portfolio. J.E. Rapp, Editor-in-Charge (PS: We invite our subscribers to try our "Hard Core" Analysis Newsletter FREE for 30 days, no obligation. This week could be a good one to try for free, since we get into some rather interesting perspectives on what's really going on. As always, we never give out your email addresses or other information. Our mission is to give everyone a chance to beat "buy and hold" and have a better idea when to get OUT of stocks, and back IN during rallies.) LEGAL STUFF: Copyright © 2005-2010 MMR Publishing, LLC All Rights Reserved The content on this newsletter is provided without any warranty, express or implied. All opinions expressed on this website and newsletter are those of the author(s) and may contain errors or omissions. All contents of this email publication are subject to Copyright law and other Conditions of Use, Disclaimers, and other user information. No specific investment advise is given, intended, or implied. For full details regarding our Conditions of Use, Disclaimers, and other information, see our website at: NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES. The author may or may not have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility. Please refer to our website for a full description of our Terms, Conditions and Disclaimers, relative to our website and any of our publications and communications. Monday Morning Review content may be reproduced or excerpted online provided full attribution is given and the original article source is linked to. Please contact Editor-in-Charge, J.E. Rapp, for reprint permission in other media. |
Monday, February 22, 2010February 22, 2010 Free Edition NewsletterTuesday, February 16, 2010February 15, 2010 FREE Edition Newsletter
Monday, February 8, 2010February 8, 2010 Free Edition of the Monday Morning ReviewTHIS WEEK'S STOCK MARKET TREND SIGNALS *************************************************************************** (The signals shown below are the "regular" MACD signals, NOT the Advanced MACD signals, which are available separately for only $4.95 a month. See our website for details). Shown below are the current "Weekly" signals for the Dow Jones Industrials, S&P 500, and NASDAQ using the "regular" MACD (as is available for free on many investment websites). These can change quickly, but can also go weeks or months between changes, so be sure to check each week's email. The Longer-Term "Monthly" signals (rarely change) are shown below. Then, at the bottom we provide our big trends for interest rates. Dow Jones Signal S&P 500 Signal NASDAQ Signal LONGER-TERM (L-T) STOCK MARKET TREND SIGNALS (The signals shown below are the "regular" MACD signals, NOT the Advanced MACD signals, which are available separately for only $4.95 a month). These longer-term signals are based on 'monthly' intervals for the "regular" MACD, meaning that signals can only change at the beginning of the month. As such, these signals can go for months or years between changes - BUT when they do change it pays to take heed, since it signals a potentially VERY IMPORTANT change in trend or direction for the market as a whole. Subscribers that don't change their investments very often will usually follow these signals since they don't change very often. L-T Dow Jones Signal L-T S&P 500 Signal L-T NASDAQ Signal INTEREST RATE OUTLOOK These interest rate outlooks are based on the price and yield trends for U.S. Treasury bonds of various maturities. This kind of information is helpful for those investing in certificates of deposit, applying for a loan, and other reasons where the interest rate outlook is critical. While rates could move counter to the signals shown below from time to time, we show the LARGE trends for these rates, based on the monthly interval MACD. Short-term (3-6 Months) Medium-term (2yrs-5yrs) Long-term (10yrs-30yrs) COMMENTARY: The Ultimate Depression We apologize in advance for the length of this week's newsletter, but events could be reaching a critical phase, requiring us to go into a bit more detail. Could the stock market rally this week? It's possible, but as we've said many times, stock markets don't go in a straight line. The most important thing to watch (as always) is the MACD. As long as it's negative, or indicating a downtrend, we have to respect that, no matter what we 'think' the market will do next, be it crash or rally. So many times, investors get impatient and try to second-guess the next market move. Sometimes they are correct, and make money. Many times, they guess wrong. MACD is only one of our indicators, but it's a very powerful one, and when it says we are in a downtrend, we aren't going to argue. Naturally, we will watch for signs of a turn, but until the MACD turns, the message is clear to us; and for good reason. Only a week after our newsletter alerted subscribers that the shorter-term weekly interval MACD had flashed a red "SELL" ; or downtrend signal, the Dow Jones Industrial Average broke through the psychologically important 10,000 level, inter-day, while the Department of Labor tried to tell us the unemployment "improved" in January. When looking at the economy, here and globally, we see current events as a progression towards America's next depression that we're calling the "Ultimate Depression". Many have said over the last few decades, the crash and depression of the 1930's could never happen again, since our markets and economy now have "safeguards" preventing anything like that from occurring again. Really? At no time in history, has any nation accumulated such a level of debt, compared to any metric you want, or had such hairball of financial wizardry such as credit default swaps and other derivatives (over $1.5 QUADRILLION in notional amount!). This is a high-wire act of untold proportions and with the past and present crew driving this bus on our nation's high-wire act (yes, it's that precarious) we think it's only a matter of "when", not "if" we take the final plung e. Does this mean the markets can't 'recover' and rally back? No, anything's possible, but that's our point, i.e. "anything's possible", and that's what makes the current business and investment climate so difficult to navigate. And, stock markets hate uncertainty. Back in May 2005, we said that if a negative yield curve happened (it did) our nation would fall into a recession. Then, in October 2008, we saw enough evidence to say that our nation had begun its slide into the next Great Depression, and that it could ultimately be even worse than the one experienced in the 1930's. Our call for another depression came on the heels of the banker bailout, when Congressman were literally threatened with martial law if they didn't vote for the bill, despite Americans' resounding voices shouting "Not only No, but Hell No!" [We have the martial law video if anyone wants to see it]. The bailout bill passed anyway on the next try. In addition to all the other mountains of evidence a depression was in the cards, this miscarriage of government, and the deliberate usurpation of the American will, told us VOLUMES about the real state of the unio n, who was 'really' running the show, and the direction they were taking us. Sure, there were some Tea Parties that the Republican party tried to make hay with (even though attendees were from all walks of life and all parties - not just republicans.) All this told us that it was only a matter of time, before this dog and pony show (Congress et al) ran out of tricks and could no longer kick the (debt) can down the road. Then, our January 25, 2010 free newsletter issued a new "downtrend" signal for all three of the major indexes: Dow Jones Industrials, S&P 500, and the NASDAQ. This followed a rough week for stocks, and now the weekly interval MACD's seem to have done a good job of identifying at least a temporary selloff in stocks -- or something worse. The market's have been on edge, and it's been a toss up what it was going to take to set off a correction. Lately, it seems to be the worries about sovereign debt. Sovereign debts for the P.I.I.G.S (Portugal, Italy, Ireland, Greece and Spain) is very important in that there are billions on the line in CDS (credit default swaps) and other derivatives, that could start the 'great unwind'. But, an even larger question is, what about our own sovereign debt, and fiscal disaster in many of our states? Just last week, Moody's said they could potentially downgrade Treasury debt to below AAA status. Talk about a paradigm shift! Many financial products and key terms are pegged against this supposedly "risk-free" instrument called the U.S. Treasury bond, and for it to lose it's AAA rating could create quite a jolt for markets world-wide. Sunday, yesterday, Treasury Se cretary Geithner was asked this question in an ABC News interview, to which he responded, "Absolutely not, that will never happen to this country." Really? Then he added that the risk of a double dip recession in the U.S. has declined, especially after a government report last month showed the world's largest economy grew at a 5.7 percent pace in the fourth quarter of 2009. Sorry, we don't believe it. In our opinion, the 5.7 percent GDP was a highly inflated number (we delve into that in our paid subscription), the unemployment level is over twice what they cite in the news, and Moody's wouldn't say something like that for 'grins' -- they have a lot at stake, and have more incentive to say nothing. And, as for a 'double dip recession'? We disagree: we think the economy is sliding into depression. If we see evidence to the contrary, we'll say so. We don't want to see a depression...too many people are hurt. That's the who le mission of our newsletter, to assist people by helping them avoid the full affect of a crash, and take advantage of rallies, and avoid the hurt. As for the stock markets, we've made the point many times that markets are manipulated. A prime example is the gold market: one of the most manipulated markets on the planet, with central banks, trading exchange intrigue, billionaires, private vaults, derivatives, etc. Predicting gold prices are about as difficult (more so) than the currency markets. We've also said that, there's no logical reason why the government wouldn't be also working within the stock markets through their Presidential Working Group on Financial Markets, instituted by Executive Order 12631, signed by President Ronald Reagan in 1988. Hints at their work have been denied for years, but recently, there's more more open discussion about this group, and their role in the markets. Our point is, the "free" market may not be so "freely operating" after all, and we believe this is a consideratio n when investing. So, if they're willing to manipulate markets, logic follows that they could send markets up, or down. It's a bit disconcerting that this manipulation is making to the main stream news, and we're not sure what that means. Listen to the interchange in this video between the guest Charles Biderman of TrimTabs (a highly respected organization) and the man reporting for CNBC. This reporter shows his bias, and calls him a "conspiracy theorist", when Mr. Biderman indicates he simply doesn't know where all the buying is coming from in the stock market over the last nine months. Click on the link below to watch the video: So, we have massive debt, a deteriorating economy, horrible unemployment, manufacturing a husk of it's former power, government assuring us that all this old and new debt won't hurt it's credit rating, and market manipulation of some kind. Sounds reassuring right? Well, no, and we'll see if this recent stock market downturn is the beginning of something severe. Our assessment of the technical and fundamental condition of the markets and economy, tell us to be extremely cautious now. Also remember that the stock market has been "crashing" in real money terms since the Year 2000, as the dollar has grown substantially weaker, while real money, gold, and gone up in relative value (actually, gold buys roughly what it always has...it's the dollar that's lost purchasing power). So, for example, the nominal price of the Dow Jones Industrials is much, much lower when priced in real money: gold. Keep in mind, the government and Wall Street could have some more tricks up their sleeves and pump some air into the dying market, such as more stimulus, or a surprise move from the Treasury, Federal Reserve, etc. that plugs the hole in the dike. Ultimately, it would only postpone (and make worse) the inevitable. The problems, as we've gone over so many times, are simply too massive, too deeply ingrained into the fabric of our society to simply fix overnight. Each chance at tackling the root causes (lack of industry, high taxes, bloated government, endless wars, etc.) is squandered in yet another "Blue Ribbon Commission", spending bill, debt ceiling hike, etc. Meanwhile, we haven't even seen the depth of the problems facing our economy; unemployment being one of our largest problems. And, we have a few observations about the unemployment data released last Friday. You probably heard that the government's official unemployment rate dropped to 9.7 percent, from 10.0 percent. Sorry, but we don't buy this number, and we go into more details in our paid subscription (Click Here to subscribe), but bottom-line, the real 'on-the-street' amount of people out-of-work, plus those no longer looking for work has dipped only slightly, from 22 percent to about 21 percent. And, it's going to get much worse. We've seen so many stories from men and women that have handed out over 700 resumes, received maybe 10 interviews, and still didn't get the job. Many have been looking for between 1-2 years. All have simply given up, and are working at volunteer organizations to keep up their skills. What's the go vernment response? More stimulus! Some in Congress are talking about a "jobs bill" that would give employers a $5,000 tax break to hire employees. Excuse me? Businesses don't hire someone for say, $45,000 a year, to get a $5,000 tax break. They hire if they think they can make a profit OVER the $40,000 net for each employee ($45,000 less the $5,000 tax break). Bottom-line, the stock markets may not have fallen off a cliff yet and could still 'recover', but at this point, there are so many parallels to the drop off in the stock market to the beginning of the 1929 crash, in our opinion, it is wise to pay heed and keep a close eye on your investments. If the MACD had been invented and used before the crash in 1929 (it wasn't invented until Gerald Appel came up with it in the 1970's), market technicians would have had about four weeks to get out of the market before the BIG crash. While history doesn't repeat exactly, it does ryhme, and if January 25, 2010 is "week one" of a four week warning period, we think we are now "On Notice". Finally, it's interesting to note what "the experts" said back in 1929, both before and after that stock market crash. Back then, the "experts" on Wall Street and in governmen t told everyone not to worry, everything was going to be 'ok'. For example, well into the crash, but after a slight recovery, then Secretary of the Treasury Andrew Mellon said in February, 1930, "There is nothing in the situation to be disturbed about." Really? We know how that one ended, but what about today? Sadly, these same kinds of "experts" are still out there, telling us "everything's fine and will be ok" or "buy stocks". Trust your own instincts, do your own research, watch the MACD, and do what YOU think is best. We don't give specific financial advice, so it may be a good idea to look over your investments, decide what's right for you, and/or check with your financial advisor. We will be closely watching the MACD to see if the trend changes back to positive. Take care, and all the best for your health and investment portfolio. J.E. Rapp, Editor-in-Charge (Important Publishing Note: The markets are closed next Monday, February 15th for President's Day, and per our standard publishing policy of not publishing on Federal holidays, we will post next week's issue Tuesday, February 16th.) LEGAL STUFF: Copyright © 2005-2010 MMR Publishing, LLC All Rights Reserved
The content on this newsletter is provided without any warranty, express or implied. All opinions expressed on this website and newsletter are those of the author(s) and may contain errors or omissions. All contents of this email publication are subject to Copyright law and other Conditions of Use, Disclaimers, and other user information. No specific investment advise is given, intended, or implied. For full details regarding our Conditions of Use, Disclaimers, and other information, see our website at: NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES. The author may or may not have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility. Please refer to our website for a full description of our Terms, Conditions and Disclaimers, relative to our website and any of our publications and communications. Monday Morning Review content may be reproduced or excerpted online provided full attribution is given and the original article source is linked to. Please contact Editor-in-Charge, J.E. Rapp, for reprint permission in other media. Monday, February 1, 2010February 1, 2010 Edition of the Free Monday Morning Review Newsletter
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