Stock Market June 2009

[jjj000]

Time for a new thread.  Let's see if we get back to 25 pages of posts for this month.

Someone a while ago mentioned sector rotation.  Here are a couple interesting resources I was looking at.  Not saying they are really worth anything, but interesting nonetheless:


According to Fidelity management, "The following chart shows a typical business cycle and the points at which various economic sectors tend to outperform the broader market"



And here is a comparison chart of industry sectors on a monthly basis:
http://investing.businessweek.com/research/sectorandindustry/overview/sectorlanding.asp

Energy and Basic Materials led the market through May.

I guess we'll see in June if Health Care and Consumer Non-Cyclicals take the baton and run with it next.  Will be interesting to watch.

Sorry for the lightweight post to start the month, but figured we should at least move on to a new thread.

-3j

[Bottomfeeder]

Thats not lightweight!!!

Interesting to see the beginning of the last bull was financials and transports....financials kicked off this move, which was something I posted would occur again back in late 2007.  Seems to always happen when noone thinks it can.

I will be curious to see if they continue to go up.  I have a hunch that they will.

Good stuff.

[sunseeker]

The resort:
http://www.youtube.com/watch?v=2jcH8ibKLVg&feature=channel_page
We are usually around here:
http://www.puertodeportivosantaeulalia.com/index.php?option=com_content&task=view&id=4&Itemid=10
+
http://www.puertodeportivosantaeulalia.com/index.php?option=com_frontpage&Itemid=1
(If you look through the photos you might just see that a familiar name).
There is a little Spanish tapas bar close by that pours cold beer in to a glass which has been frosted up in the freezer. The flecks of ice gradually float off into the beer.

(My preferred brand of refreshment here during the day.)

Bought some TSX:ANI last week. Otherwise I am keeping it simple using some of the ETFs (mainly agriculture) for now.[/b]
Adios. 

Keeping a very keen interest in all of you posts.

[Peter518]

 The Start Of New Bull Market

http://www.tradersnarrative.com/coppock-guide-signals-the-start-of-new-bull-market-2622.html


Coppock Guide Signals The Start Of New Bull Market
Published June 1st, 2009    in Technical Analysis
Tags: All Ordinaries, bottom, bull market, Coppock Curve, Dow Jones, FTSE, Nasdaq, Nikkei, S&P 500, shanghai.
While we were in the thick of the 2008 bear market, I looked ahead and provided a road map for the conditions of a new bull market. Among them was the Coppock Guide.

At the beginning of the year I provided a hypothetical projection to demonstrate that the stock market would have to go on one hell of a bullish rampage to pull the Coppock Curve up from its death spiral. A few months later, a rally that almost no one foresaw took us 40% higher.

Then at the beginning of May, I reiterated that a Coppock buy signal would be arriving by the end of the month, as long as the market held it together and didn’t fall any further.

Well, we are finally here and the Coppock guide has provided a definitive signal by turning up - this is the buy signal that we had been anticipating:



I know, I know, it is impossible to see on the chart but believe me, it is there. To see a zoomed in view of the chart, check out the previous links. The S&P 500 Coppock Curve stopped going deeper into negative and actually increased from -417 at the end of April to -409 at the end of May 2009. All it would have taken was a one point increase but we got 8 points.

Now that we have a signal, what does it mean?

Well, obviously, it means we have the wind at our backs. The Coppock Guide has been a reliable indicator of the long term market trend. But, like everything else, it isn’t full proof - as you can see from the false signals. So with that in mind, here are three major observations:

First: The signal isn’t just for one index or market. We are seeing the Coppock Curves for many different markets around the world turn up at the same time. The Australian All Ordinaries, the Nikkei, the FTSE and all 3 major US market indexes: S&P 500, Dow Jones Industrial and the Nasdaq.

While most of the signals are occurring concurrently, some like the (Chinese) Shanghai market and the Nikkei gave signals last month. Check out all the major world markets to see how just how much confirmation we are getting from them.

Second: Valid signals are those that turn up from under the zero line. And historically, the deeper the level at which the signal arrives, the more strength the following bull market has. This most recent signal is coming from a deeply oversold level - the most since 1938 (-417 to -400) and even further, 1932 (-643 to -616).

Of course, that doesn’t mean that from now on the market has only one direction - up! Based on the sentiment and technicals covered before (Wedge Formation), I think it is probable that we will head down, but won’t break the previous low. This will allow for the long term moving average to flatten out and begin to support, rather than hinder prices from going higher.

Third: Although the Coppock Curve has given its share of false signals, we haven’t seen any occur when the metric has curled up from such a deeply negative level. There are very few examples of this, so it is difficult to extrapolate a rule but so far, this has been the case.

 All Ordinaries, bottom, bull market, Coppock Curve, Dow Jones, FTSE, Nasdaq, Nikkei, S&P 500, shanghai
Enjoyed this? Don't miss the next one, grab the feed .
                                 

[Croaker]

GM files for the big B and the market soars.  I guess the market had it factored it. 

I can't see how this market is going up, except with smoke and mirrors.  Deficit going way up, money press running 24 hours a day, unemployment up and will go higher, etc...

I guess that is why I missed making money on this run.  I just refuse to see the marketing going up.

All I can say is wait until they round the next corner or two or three or four or......

Sold my last stock,  sitting on 100% cash.  Sold FVI at 90 cents like I said I would and took my 45% loss. With a smile on my face to boot.

Now I will wait Patiently for my next buy in. 

Watching the U's, Banks and Gold/Silver.

U's could be a play in Sept/Oct time frame for me.

Banks are going to get hit again this summer IMO. Maybe Fall 09 or early 2010 I will get into them.

Gold/Silver to me will be up and down this summer.  I see Uncle Sam and company letting it hit over $1,000.00 and then drive it back down and then it starts all over again.  So I will be getting in and out.

One thing I am going to start looking into is China. Probably on the Funds side, I see money to be made their.

[jjj000]

Croaker... same deal here.  Sold out most of my stocks today, and now I only own 2 stocks!!  Kept hold of some Mega, and still shorting Ross.  So I guess I only own 1 stock, and am borrowing another.

Took profits today and closed out my first two short term OBVMO trades (DRYS, SD).  So far so good.

Actually spent the better part of the last hour looking for something to buy, but the technicals are telling me to wait pretty much across the board.  I've also started looking at the reverse of my buy signal for OBVMO as a sell/short signal (rising OBV, lowering momentum), and there are a whole mess of stocks falling into that category.  But I haven't backtested that signal yet at all...


----------------

sunseeker... nice work   ibiza, huh?  life could be worse!!!

[sidewinder]

Brian Deese, a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry will be incharge of dismantling GM.  Obama likes em young ..

http://finance.yahoo.com/family-home/article/107136/The-31-Year-Old-in-Charge-of-Dismantling-G.M.?mod=family-autos

This is about to become bizarro world.     

[onlooker]

About Brian Deese.  To serve at the White House for the Obama administration, it appears to be who you know and not what you know that matters.  Political nepotism.  Yuk.

[davidslane]

onlooker, just for the record, it doesn't seem like there was any nepotism involved.

He worked his way up the ladder.

He took entry level positions at the Clinton White House, worked his way up through campaigns, impressed people like Lawrence Summers (who some argue is the top economist in the US today) and was put in a position where they feel he is qualified for.

One of my closest friends, Jason Furman, who is Lawrence Summers' #2, is only 39. But he has an MBA from the London School of Economics, and two Ph.D.'s from Harvard including in economics. He worked in the Clinton White House, worked for the Gore, Clark, Kerry and Obama campaigns, and at the liberal Brookings Institute and is considered a top economist for the Democrats.  He doesn't have corporate experience but he knows his stats and policies (and is a relative centrist, as is Summers).  When they need corporate folks, there are a lot around to get input from.  Age doesn't dimminish Jason, Brian Deese or President Obama for that manner.

So, I would say, let's not critique age but look at results.

I must say, as bad as things looked last September, things look quite stable right now. It took a lot of money and I'm sure there was plenty of waste --- and I think we have 5 more years of wilderness in front of us --- but I no longer think the US economy or the world financial system will collapse. And I have to credit the new team in Washington for that.

I'm giving them all the benefit of the doubt for now (and expect to make money on gold/silver stocks during the upcoming inflation scare).


Just my 2 cents from someone who has followed the path of someone who is in a similar position as Mr. Deese.


[At the same time, if you do not have family wealth, it is much harder to get the education needed to get into schools like Yale and Harvard and be able to take low paying jobs that get you up the ladder in politics and not worry about paying back student loans. That's a whole other story and another problem. But it is not nepotism.]

[sidewinder]

Well we wanted change.  so .............  Perhaps the good thing is maybe he (Deese) has not learned the way of the corrupt politician and will serve his country in the manner expected of true public servant.  At least it not a well seasoned con man such as Phil Gramm, or any one of a host of the usual suspects. 

I just thought the age and experience level unusual.  He better not screw it up or they will be all over him and attempt to discredit, and destroy his career.  They being the Right wing media nitwits... leave it up to you to determine who "they" are.

[jjj000]

In some strange way I almost feel bad for China here...

http://www.bloomberg.com/apps/news?pid=20601087&sid=aoE7033VGQcI&refe
"I wish to tell the U.S. government: ‘Don’t be complacent and think there isn’t any alternative for China to buy your bills and bonds’,” Yu said in an interview yesterday. “The euro is an alternative. And there are lots of raw materials we can still buy.”

... “You should not try to inflate away your debt burden.” China could still diversify some of its Treasury holdings into euros or commodities, Yu added.


Too bad the Chinese couldn't vote in our last election...

[onlooker]

Davidslane:  I am Canadian, so I really do not fully understand how the American government system works.  So please accept my apologies for my reckless remark “To serve at the White House for the Obama administration, it appears to be who you know and not what you know that matters.”

Though Jason Furman and Brian Deese both work for the White House; in my opinion, they have vastly different work and life experiences.

If the article was about Jason Furman being in charge of dismantling G.M., I would not have made my flippant remark because he does have an impressive educational background and longer time (than Brian Deese) served at the White House, and more life experiences.   

But, the article by David E. Sanger presents Brian Deese as an enthusiastic idealist with no corporate work experience, no formal training as an economist, and an incomplete law degree.  Yet, he is given and has taken on the historical mammoth task of dismantling an iconic American institution.  To the average person, something is not quite right here.  Perhaps, I am just envious of his apparently easy good fortune. 

But, I will say that Brian Deese does work well with Lawrence Summers.  This was not the case for Iris M. Mack who signed on to be a quantitative analyst for Harvard Management Company in early 2002.   She was fired for expressing her concerns to then President Lawrence Summers about the riskiness of HMC's trading in derivative securities.

See: 

http://tpmmuckraker.talkingpointsmemo.com/2009/04/larry_summers_ignored_frightening_trading_practice.php#more

I want to end this talk over Brian Deese here.

What matters is General Motors Corp. filing for Chapter 11 bankruptcy protection the correct move for the Obama administration?  I think it is.

[onlooker]

Croaker ... I am also in line with your investment thinking.  I buy and sell GLD and / or SLV for quick profits, while gold / silver prices are in an uptrend.  Hopefully I will be able to get out of them well before they reach their maximum price levels.

[Peter518]

Some good news for nuclear energy:
==================================================================
USA: Obama wants to support new nuclear generation

 ....Agency staff is working "closely" on due diligence with four nuclear developers, but none of the 10 active nuclear loan applicants has been eliminated, Chu told the Reuters Global Energy Summit in Washington.  ......Chu said the Obama administration wants to support development of new nuclear generation as a way to reduce the nation's emissions of carbon dioxide, but not at the expense of energy-efficiency programs or increased use of renewable power resources, such as wind, solar or biomass.       
                                             "Nuclear is just part of a very wide portfolio of what we will need to add" to address the carbon issue, Chu said.       Last month, the energy department selected four projects for final negotiations that may lead to a commitment for a conditional loan guarantee.  Chu said the department is working as fast as it can to choose companies that seek a variety of available loan guarantees. "I always want to go faster, no matter what," he said.                                                                       http://www.reuters.com/article/GlobalEnergy09/idUSTRE5506XJ20090601

------------------------------------------------------------------------------------------------------

China: New energy seen as new growth engine

The first phase of the program covers a strategic shift in three years to nuclear, solar, wind, biomass power and clean coal technologies - with investment opportunities worth as much as 3 trillion yuan ($439 billion), he said. Phase 2 encompasses the period up to 2020 and will entail far more investment.                                                         According to energy officials, the existing plan for nuclear energy is likely to expand by as much as 50 percent from the level planned in 2006.                                                                          http://www.chinadaily.com.cn/bizchina/2009-06/02/content_7962440.htm

[pinetree]

I notice Sheldon's been buying... 100k shares of MGA last week for an average cost of 1.77... in addition to 150k of PNP for an av around 2.10, not to mention another 150k of MGA in March for 0.95 ...

****

3j- I looked at SD since you mentioned it.  Let me guess, was the vertical red line your entry point?  If so, nice one.