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Showing posts from May, 2013

Buy Now?

I am going to let you in on a way to make money in stocks. “Buy low, sell high”. Sorry you already heard that one? Ok but the market is this ingenious machine for talking people into doing the opposite. I got a call the other night from an old buddy who had a hot tip on a restaurant stock, and he wanted to know if this is a good time to buy. When the market is on fire like this we all want to chase it. That big red buy button is soo tempting. Just look at it. My answer was: “I would not put new money to work here, I also would buy safety.” Yes we are in a bull market, read the New Momentum to see why, but this bull is looking a little tired and I would expect a pull back this summer. Let me go over a few facts here;

It is now more than 100 days since a 3% pull back, that has never happened in my records going back to World War Two.We are over 20% above the 200 day moving average a classic overbought sign If you bought the S&P500 in January you are up over 19% -- that is two years …

May 25 2013 Weekend Market Comment

May 25 2013 - Do you recall the high school sweat-heart that ripped your heart out with the words . . . “Oh it is not you, its me, perhaps we should just cool thing a little bit, just for a little while, I need some time to get centred.” Ya you got centred, in the back seat of the captain of the football teams car. Oops sorry I digress.  
Well Wednesday they did not take away the punch bowl exactly but clearly they are threatening to use more fruit punch and less booze. Fed Chairman Ben has been pressured to end his ongoing $85 billion a month buy back program. But Ben is an expert in the 1929 depression and he is going to be very gentle when he breaks the news. You could not be more gentle than his 5 little words. . .  “In the next few meetings.”  Here is the quote:
“If we see continued improvement and we have confidence that that is going to be sustained, then we could in — in the next few meetings, we could take a step down in our pace of purchases. Again, if we do that, it would…

May 18 2013 Weekend Market Comment

May 18 2013 - Please see my May 11 post and doodle all the charts a little higher . . .

The market just keeps going up. ho hum, Not much to say except be careful.  For example Tuesday is often a good day for stocks, we are up 17 Tuesdays in a row. We are 12.5% above the 200 Moving Average (that is rare). We have more 52 week highs than we have had in 35 years. Now when the markets are this strong, this long, there is either a pull back coming or a short squeeze. This is a lot like what happened a few weeks ago to  my bear suit.  Imagine how much pain the bears are taking right now. If you were short equities right now and the market goes higher at some point you cover your shorts. That is an effective buying of the securities. If there is a ton of short covering right now, the market could really shoot up. If you have seen the action in Netflix and Tesla Motors they are tearing higher on the misery of short covering, soon it could be everywhere. 
OK I guess I can draw some charts for y…

Market Comment May 11 2013

May 11 2013 --- Well what can I say, the market is roaring ahead. Just look at this week’s Economist magazine cover.

I can draw you a few charts, but you know things are popping this week. First off lets look at the YP Primary Sell indicator, wow up it goes. (click any graphic to enlarge it)

Here we have the VIX, this measure fear and again fear has disappeared. Does it look a bit overconfident to you too?

We can also plot the market; here I have added a Keltner Channel, to show how we are way up the edge of parabolic buying and if you look to the left in 2012 you see how it is possible to be pegged at the top of this channel for a while. 

Clearly the Market wants to go up. The economy is not why these markets are rising, it is simply a case of tons of money flowing out of bonds, commodities, Europe, Asia and other global markets -- heading for the only game in town right now – US Equities. The other reason is the US Fed continues to boost the economy trying to bring back jobs. Read

The Future of Zombietown

Sorry this article has moved to my Thoughts blog Click here to read.

 “Thanks to the condo kings there's cable now in Zombietown” -Billy Joel Lyrics

May 8 2013 -- I am sure some people have very interesting lives, people like the President Barack Obama or Brad Pit. But for the working people in my neighborhood life looks a lot more like the opening sequence of the Simpson’s, where middle class America waits for the whistle to blow so they can rush home to watch the tube.

It is that huge middle American home audience that makes the pay-TV industry is one of the largest and most lucrative segments of the entire U.S. media ecosystem, but trouble is on the horizon.
Hardware developers such as Roku and Western Digital have had success selling new set top boxes, with content streamers including Netflix, Hulu, Amazon Prime and YouTube moving into the sector. Similar capabilities are in Samsung's newest smart TV and Blu-Ray players. They offer a cheaper, Web-based video service, bypassing…