April 12, 2010 Free Edition of the Monday Morning Review

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:   According the regular MACD, the markets are in a clear "upward" trend, and all systems are "go".  Yet, we all know that the economy isn't 'recovering', unemployment is growing, real estate is about to see another wave of foreclosures, and higher taxes are on the way (just to top things off!).  So, if things are really so bad, why are stocks going up?  For the same reason stocks went up through 1999 and into March 2000.  All during that time, the regular MACD said it was time to be in stocks -- and it was, until the regular MACD said to get out early in 2000.  The point is, that the stock market is not a perfect barometer of what's going on underneath the numbers -- numbers that are often fudged and are in some cases fabricated.   So, what's an investor to do?  Read all the business magazines?  Won't help -- most are run by controlled media that also have Wall Street advertisers and there's no way you'll hear any potential bad news from them.  What about the daily newspapers?  Forget it.  They are also bought and paid for by the same corporate interests, advertisers, and others that "control the message".  Television?  Same problem, only worse since there's so little actual "news" that makes it through all the commercials. (That's where the Monday Morning Review comes in -- please, please tell everyone you know about our publication...)   So what's the answer?  The MACD!  It's a simple mathematical program that takes the raw price data, filtering it through a series of calculations that show what the trend really is -- not influenced by positive or negative spin.  When it says the trend is up, despite all the bad news, you simply have to 'hold your nose' and go into stocks.  Conversely, when it says the trend is down, forget all the hype and temptation to "make a few more bucks", and simply get out.  That's it.   What we described above is the way to invest in "normal" operating markets.  There's an old saying on Wall Street, that anytime someone says "it's different this time", they are probably wrong (for bull or bear market arguments).  But, what if it isn't 'different' this time, and what if the investing game itself is about to end?  That's something we suggest everyone contemplate now, as we see Greece in the final stages of collapse (Fitch downgraded their debt to BBB, Negative Outlook).  The U.S. is not far behind Greece in terms of deficit spending (11 percent vs. Greece's 12.5 percent), and with the hiccup in the 10-year U.S. Treasury market last week, it tells us that was a 'tremor' not to be ignored.  What do we mean by an 'end' to the investing game?   What if all markets were closed -- period?  Sure, perhaps you bought some index puts, or even put LEAP options and "won big".  How are you going to collect if the markets are suspended -- indefinitely?  You could be rich in paper values, but practically speaking 'broke' with no cash, gold, silver, food, medicine, fishing equipment, home or other necessities.  What then?  These are the kinds of possibilities we ask our subscribers to consider as things 'get wobbly' in the markets, the economy, and in politics (which influence everything).   Sure, the regular MACD says everything's fine now, but remember a few things.  First, the MACD won't get you out at the very top, though it does tell you when to absolutely 'bail out'.   Prices must first come down a ways, and then it will cross negative reflecting a downtrend.  Second, and this isn't a technical term or anything scientific, but we have what could be called a 'feeling', 'sense' or 'gut' notion that things are about to get scary.  Sure, it isn't quantifiable and can't even be defended logically, but if you feel the same way, don't ignore your instincts.  Many, many stories show how people didn't get on planes that later crashed, get in cars that crashed, take the subway that was doomed, etc.  This is a good time to use your intuition, while letting MACD be your 'searchlight' telling you when to absolutely get to safety.   We see some rough times ahead, possibly soon (like the Greece situation spreading), so buckle up, and keep those arms and legs inside the cabin!   Take care, and all the best for your health and investment portfolio.      J.E. Rapp, Editor-in-Charge       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. 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. 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