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/

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/

CYCLICALS CHART ROUND UP

Until the last week or so, you might have thought that gold, silver, and every metal on earth was worthless.  Chinese real data, or fake data was released and gave the shiny stuff and cyclical stuff a life saving does of drugs to perhaps stave off death for a month or two.  All intra-market analysis I do suggests that we are at extremes in terms of how far the US markets have gone relative to other markets.  It frankly may just be a cycle of cyclicals and emerging markets coming up a bit to bring things in line.  Here we go!

$GOLD

$1340 looks to be the magic number.  If I'd have to guess, I think we'll see a bit more upward momentum and then a slam down here for gold once again.  $1180 looks like support to keep loading up the truck for the zombie apocalypse.

$SILVER

Dare the shiny silver one get back into the channel of death?  Maybe.  If silver can climb just a bit further it has the possibility to go as high as $26, however if my hunch is correct, silver will fail and fall to the high $17 range.

$COPPER

China's latest doctored reports last week seems to be the saving grace for all cyclicals and copper.  JJC may be a nice option for the speculator looking to ride copper's recovery to $3.80.


FCX

I'd feel a bit more comfortable with a pound on the table buy for FCX if it were able to power convincingly over $32.  If it does, $39.00 is back in play.  Go long with a good surge higher.


DD

Nice breakout here for Dupont.  It's hard to buy more here and with any overall market weakness, it is probably time to finally harvest nice gains.

XLI

Wish I'd bought this rather than watching for literally the last 2 years.  There is probably room for this to come down to the $39 area, which at that point would be just another opportunity to buy the dip, until proven otherwise.


CAT

CAT has been the victim of a terrible global growth story.  It has still managed to fight back from the scary free-fall in the summer of 2012 and December of that year.  For all its scratching and clawing to stay above the $80 level it just seems as though a break lower is inevitable.


EEM

EEM, the emerging market ETF looked like someone was going to put it out of its misery once and for all.  The bounce off of $35 was very nice and I fully expect to see an attack on the upper boundary of $42.  Will it succeed in going higher?  If it does, it is game on for all emerging markets and we'll see massive out-performance of them relative to domestic equity markets.

EEM:SPX

Inter-market analysis of emerging markets (EEM) to the S&P500 is shown here.  Since 2011, emerging markets have been under-performing significantly and we've gotten to the point where there HAS to be some reversion to the mean where emerging markets actually post some gains on a relative basis against the US markets.  There really has only been two other times since 2007 that the EEM:SPX relationship has been this low, and in both instances, emerging markets posted monster gains.  Please note, this does not mean that the US markets will go down, it simply means that emerging markets could really outshine and US markets could be seen as fully valued while shoppers choose the potential up and coming asset class.

IDX

As much as I've been a fan of Indonesia for years, the recent beat down of IDX has been heart-breaking and wallet destroying.  There is not option here, if you are a supporter of IDX, it must hold a close over $27 this week; otherwise it is a sell or a short candidate down to $24.

EWM

$15 is a potential destination for EWM the Malaysian etf.  I would look for pretty strong lower support and if it does not bounce, it too is a sell.

EWS

Support for EWS is at $13.25.  A move below this level brings the lower channel into play, almost a full dollar lower.

EWC

EWC (Canada) just looks to be locked in a battle between levels of support.  I think this is a very nice range to trade, however the area where EWC sits now is simply in no-man's land.  Wait for a move lower to $26 or a break higher to short at $29.

EWA

As China goes, EWA goes.  If we see good news from the Asian tiger, EWA will resume its ascent.


EWJ

While not an emerging market, Japan certainly trades like it is.  Abe is showing the Fed its future, and while the threat of unlimited stimulus shocked the market for a time, we are finding that reality always comes back to bite you.  Sell Japan and anything not nailed down in Japan.  Toyota (TM) has had the mother of all moves, I think it is a fine time to sell.

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/

ENERGY CHART ROUNDUP

I wanted to post copies of many of the charts I examine on a daily basis.  I found that there are just too many to post in one entry, so I'll blast them all out over the course of the next couple of days.  We'll look at other cyclical names, dividend payers, banks, and health insurers.  Simply drop by goatmug.com later this weekend.  We'll start with energy as it has been quite interesting of late.  If inflation and global growth is muted, why do we still have $105 oil?  Let's jump in.

XLE

Recent weakness is displayed in the last week, but up, up and away seems to be the overall trend.  The overhead resistance level is at $84.50, but this certainly could continue with this week's negative direction and go lower to the high $70's.

$NAT GAS

If $3.25 doesn't hold, it is bombs away to $2.75

$WTIC

There's a bunch going on in this chart, but if oil gets above $107 area, we could be talking about $150's.  We'll need some type of event in the Middle East.....lucky for us, the Middle East is calm and there are never any situations that boil over and cause tensions that impact the rest of the world.

UGA

Gas looks weak and supply data suggests that UGA will go lower.


COP

Um, just fantastic.  With nice gains on the books and nat gas looking weak there might be a reason to sell with overall market weakness.  The aim would simply to reload and buy more on a pullback in the $58 area.


PSX

The COP-cousin just doesn't have the same mo-jo as it's close relative.  Higher oil prices and lower gasoline prices will hurt this guy and this is why the stock looks poor.


OXY

This has been one of my favorite charts to watch over the last 4 or 5 years.  Weakness here is seen in the chart and we could see a pretty significant plunge to the high 70's or lower.


APA

Short.  I've hated this one for a long time, it seems like it won't be long till it rejoins its old channel much lower.

KMF

This is a MLP type investment closed end fund.  It is still within its upward channel and we may have an opportunity to see it test the lower limit.  If it bounces, buy.


CHK

Despite my many posts citing my dislike for CHK, the shedding of Aubrey McClendon seems to have been a very good thing for the stock.


SRV

My guess is that you'd call this a diamond pattern if I drew it correctly.  I'd have to guess that it ends up to $8.80.  This is another version of a closed-end fund for MLPs, but is more leveraged and has a poorer management from what I can tell.

Oil and gas have often times adhered to the sell in May and go away saying.  That would not have served you well here in the energy sector this year, but could August be the time to get out of dodge?  I believe we'll see lower prices in the equities and perhaps oil my go higher if the Middle East tensions do not abate.

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/