Wednesday, February 19, 2014

WHAT COMES NEXT? (BID & MACRO VIEW)


Without any commentary..... what do you think comes next?





GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at http://www.goatmug.com/

Wednesday, February 12, 2014

THINKING OF BITCOIN? THE DEVIL'S CURRENCY

Just in case you were thinking about buying some bitcoins, perhaps it is the father of lies and temptation who is the source of your wandering thoughts.....



Bitcoin seems to be under attack from governments, hackers, and the corporate-types as Apple un-approved the bitcoin app this week as well.  Could AAPL or GOOG be ready to enter with their own crypto-currency like a Googlecoin?  We all know that corporations and government are tied pretty closely, could a special request have come from .gov to shut down apple user access to bitcoin?  We probably won't know, but it hasn't been a good week for bitcoin as it suffered a flash crash.  I hadn't owned any, but on the crash, I picked up my first .5 BTC just for grins.  I'm still in the money but the screen shot of the Bitstamp Exchange is a little scary.

FYI, Obamacare's enrollment is about to come to an end (unless the deadline is changed) and I'll be back to posting with regularity.  Sorry for the absence, just can't handle the volume and maintain the posts.

GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at http://www.goatmug.com/

Sunday, September 8, 2013

CHART-NADO (SECTOR MODEL RECAP)


Several key things have been in play for months and I believe they will continue to be the leaders in this environment.  We'll update a few familiar charts, but also make sure to highlight the themes that will be the beneficiaries of the same sector rotation model we've based our analysis on for several years.

Let's dive in.



In my estimation we are now in the left middle 1/3 of this graph in that we have witnessed this crazy 4 year rally in stock markets, but just to throw a wrinkle at you, we have kind of limped along in the economic recovery marked with massive repression of interest rates causing some delayed impact within the normal rotation.

My thought is still that Technology, Industrials, Basic Industry, and even Energy are the key winners now and in the short to medium term.  However because of distortions related to interest rates, finance too will benefit from net interest margin spread growth, and they should continue to benefit.  (I'll hedge my bets here and suggest that regional banks and insurance companies will win, while large money center banks may lose as they are heavily dependent on mortgage activity for some of the success.)

I'll just post the charts with little comment.

COP


KMF




XLE




 MRK





PFE



IXN



SOCL



PNC



FITB



XLF



FCX



CAT



XLI



EWC



EEM:SPX



EEM


Emerging markets seemed to have bottomed relative to the SPX and may be the area to watch in terms of "better than" performance.  


SUMMARY
We've had a correction and despite all of the crazy geo-political issues, there are simply strong looking charts and reasons to watch for a good bounce.  Technology, Financials (especially regionals), Industrials, and yes, even cyclicals and emerging markets are the place to invest.  Many of the charts are at support so further weakness would take a prudent investor out of their positions.  This is a good time to re-evaluate all positions, commit to firm stops, or widen them out if you are willing to handle a bit more volatility to ensure you maintain positions.

WILD CARDS AND GEOPOLITICS
The wild card in the context of investing right now is determining a winning strategy in the midst of amateur hour at the White House.  The President is way over his head in the foreign policy arena and his adversaries (foreign and domestic political and national rivals) are circling like sharks.  His mis-steps related to Syria are serious and his weakness here has emboldened challenges from Assad, Iran, Russia, and China.  The correct thing to do for the President now is to simply state we don't know who used chemical weapons and then suggest that we'll wait for more evidence.  Meanwhile he should continue to arm and support the terrorist rebels and engage Assad to the point in which they begin to win.  At that time, our strategy should be to withdraw arms and support till they are weakened.  This approach assures no winner arises and continues to draw the evil black eyes of Iran, China, and Russia to this little spot of dirt in the Middle East. 

Our President must learn that there is no winning in winning and there is no losing if you support and are friends with the meanest and worst strong man as long as he wins and you are committed to giving him indefinite monetary support forever (where are you Mubarak, Obama didn't mean it!).  We've had our Utopian experiments by both Bushes and President Obama.  Clearly the people in this region do not have the same value system and cannot appreciate the same type of democratic approach our country actually used a long time ago.  In addition, we cannot pick winners and losers in the region as most of the time the new guy is a lot worse than the old guy.  

My point here is simply that Obama probably won't take my sage advice and I'm sure his arrogance will be more of a guide in his approach to use a "sterile" volley of tomahawk missiles to soothe his wounded pride.  An attack will result in increased oil and gas prices, refiner losses, gold and silver gains, and an uncontrollable situation.  Keep an eye on it!

GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at http://www.goatmug.com/

Monday, August 19, 2013

MELTDOWN?

Today's 70 point drop in the Dow drop the index down to the low 15,000 area, a full 600 points off the highs of recent months.  Overall, things look really interesting in a bad way as 10 year bond yields are flashing higher, quickly and the stock market isn't exactly reacting well.  Remember, it isn't the actual 10 year bond rate that is concerning as it is still freaking low at 2.88%!  What is concerning is the speed in which it moved to the 2.88%.



Look at the HUGE move since May!

Here's the 30 Year -



WARNING SIGNS
What we really need to be watching is the equity and bond market interaction given their independent moves.  For example, if stocks continue to slide, but yields in long bonds arrest their slide (yields go down instead of up and prices of bonds go up), then it will signal a level in which bond buyers feel they are compensated for their risk AND this could mean a big exodus from equities.  Think about this for a moment, even with equity weakness, traders, fund managers, and retail guys have asked themselves...."If I get out of equities, where can I go, bonds suck, so I might as well buy dividend paying stocks".  BUT, if we get to a level where managers and traders rationalize that bond yields are decent enough to be a safe haven to potentially miss out on some equity movement, the markets are in trouble as stocks have pretty much been the only game in town for almost 6 months.

Having said that, if both equity markets and bonds go down too, you better hope you locked in gains when they were easy as I think everyone but Joe 6 Pack has been identifying exits and ensuring they aren't the last out the door.  Remember, Mom and Pop probably just entered this market fully in the last six months, it is probably time to let them have it.

MELTDOWN?
Emerging markets are struggling now and India is certainly in a total meltdown.




The Dow certainly looks like it could drop a minimum of 200 to 300 points here to get back to the lower support at 15,750.

And, speaking of meltdowns, I am no tree hugger, but I'm simply awed by the silence of the commie media when it comes to the potential threats of something that is going on right off the left coast.  I am concerned about this as I'm looking to schedule a trip to Hawaii next summer.  If any readers have some guidance for what to do and where to go, please share them via email or in the comments.

Some light hearted stuff for Monday night.....
Professor Christopher Busby speaks with the RT on the anniversary of the Chernobyl nuclear accident to discuss the ongoing Japanese nightmare in Fukushima.  Like most important and real happenings in our country and in the world, you almost have to go to a foreign source for news to get a decent perspective on reality.  In the US media we'll discover that Beyonce got booed and that everyone needs medical marijuana or each boy and girl deserves to make a choice of what sex they are for that day, but we'll never hear anything meaningful about our constitutional rights being whisked away or the absolute destruction that is occurring in the Pacific Ocean right now.




Word is that the damming of the area and continuous pumping of water into the fuel holding areas has caused the underlying ground and sediment to subside.  Millions if not trillions of gallons of contaminated water are leaking into the ocean which is a nutshell, isn't good.


Have a great week, and you'd better figure out where the nearest exit is....

GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at http://www.goatmug.com/

Tuesday, August 13, 2013

FINAL CHART ROUND UP - BANKS, DIV PAYERS, AND TECH


This is the final slug of charts that I examine almost daily.  These have been the safety and defensive names that have provided such great performance over the last 3 or 4 years.  Recently, several of these "safe-trades" have been beat up as some memory of valuation and risk management must have taken hold for a brief month or two.  I'm not sure if reality or sanity will continue to persist, but if it does, the utility space along with some consumer staples should be ones to sell.

XLF


While XLF (big banks) looks a smidge weaker in the last month, it is still higher than 3 months ago.  In the last 10 months, XLF seems to get down to the mid-line of the rising channel and simply stair-step higher.  The recent headwinds seem to be nothing more than an opportunity to see XLF move to $20 where it should be a good place to add.


KRE


KRE does look nice and very similar to XLF.  The price action seems to be in uncharted territory here, I do think that like XLF we could see a slight pullback where it should be a buy.  I actually like the regional banks much more than the larger money-center banks as they are not dependent on the mortgage business.


FITB


Hum.  The risk manager in me looks at this chart and thinks that the $19.75 level could be more than just a little resistance for FITB.  If you haven't sold already, a thrust higher may be the opportunity to get out before a fall.

PNC


PNC has logged an impressive run and was swiftly knocked back as it tried to exceed $78.00.  The $76 seems to be good support.  Below that, $72 may be the next place the stock tries to defend.


MRK


$47 seems like a nice place to put a stop on MRK if you are a trader and don't want to give up big gains.  If you are looking for a longer term investment the perspective simply could be that it is still within a huge rising channel and a bounce off the lower line could bring great things.  I'm willing to be patient with this one, but am still wary of a potential double top here.

PFE


Pfizer too looks to have fallen a bit, but isn't over bought and looks actually to be building a very nice base to move higher.  I'm sticking with this one.

XLU


Call it sector rotation, call it a valuation move, call it higher interest rates.  No matter what you call it, XLU has been a fantastic longer term play for me, yet I punted it.  While one could argue that in a risk-off fall, XLU will outpace other sectors in relative terms, I think the upward momentum baton that XLU has carried has been passed on to the financials, energy, and industrials (perhaps even cyclicals!).


PFF


PFF is one of those preferred stock etfs that looks to capitalize on rising interest rates.  Unfortunately the mixed-bag of holdings in PFF cause it to be subject to significant risk as it holds Reits and other financial firms that may suffer if interest rates rise quickly.  I think PFF may be a punt in favor of cyclicals we've discussed in other posts.


XLP


Does this thing ever go down?  It's funny that even though we are not in a recession, typical recession favored type investments are simply kicking ass.  The general playbook in a recession is to buy utilities, healthcare, defense, and consumer staples.  Well somehow no one ever got the memo that we are not still in a recession as XLP continues to fire higher.  Just as a matter of good financial and portfolio management you've got to sell XLP, even though it may go higher.


IXN


I really started looking at IXN and buying it about six months ago.  I actually really liked the chart of MSFT, but didn't want to just buy that name.  IXN looks really, really nice here even though MSFT doesn't.  Here is another view of the same chart.  Let me know your thoughts as this is actually one of my favorites.



SOCL


Alright, don't laugh at this one.  This is the social media etf.  This is actually one of the few pure-play social media internet efts out there, and better ones in my opinion (if you don't mind some of the garbage in it!).  I first came to know SOCL when they announced that they would actually add the FB IPO to their etf, which made me want to short the heck out of them.  (Yes, I still think FB is a zero despite its recent big move).  Despite my thoughts on FB, SOCL contains other social media firms I actually respect like LNKD and YELP that actually have a usable and money making function.  It does contain loser stocks like Groupon too, so it isn't without its flaws.  Anyway, I put this up to highlight just how fired up these types of investments have been and remind you to party like it's 1999!  

I hope you've enjoyed the round up.  Let me know if you have questions and if you think I should begin looking at some other good set ups.

GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at http://www.goatmug.com/