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Financial news I consider important, with my opinion, which is worth as much as you paid for it.
Please click HERE to read a synopsis of my view of the financial situation.

Sunday, November 29, 2009

Gerald Celente

Audio interview of Gerald Celente, tells it like it is.
The stock market is a casino and the house always wins.


Saturday, November 28, 2009

Debate on Economics & Politics

I take this series with a grain of salt, but always good to hear various opinions.
Reason I take it so lightly is "Joseph Stiglitz" is part of this debate.
I have distrust for his motives and methods in general.

The full series can be found here. (click)




Thursday, November 26, 2009

Art

Today being Thanksgiving, I wanted to do something fun/different.
This has nothing to do with finance, but eh, its my blog.

I enjoy various photography, and one site is "deviant art".
Some artwork below. A second site for awesome desktop screens is InterfaceLift.

Tuesday, November 24, 2009

Economic News Roundup

In its second reading of third-quarter gross domestic product, the Commerce Department said the economy grew at a 2.8 percent annual rate, rather than the 3.5 percent pace it estimated last month.
My Spin, considering job losses are between 300K and 500K per week for the last year, and GDP according to current US Government estimates is 2.8%, and US national debt was increased by about 10% in ONE YEAR, this is not good. But if we ignore massive government debt, 2.8% is respectable all things considered, but hardly considered a strong recovery.

MUMBAI: The US dollar is expected to remain the carry trade currency of choice in the near term and the unwinding of this carry trade is unlikely to be as severe as that of the yen carry trade seen in the early 2008, say currency experts.

My Spin: When Japan became the carry trade of choice for the world, they experienced a 20 year recession. Their stock market and real estate has not recovered in 20 years! Let's hope the US dollar does not become the defacto carry trade currency for the next 1 year, much less 10+ years. And disregard people who say a weak currency is good for America. Ask that person why don't they put their savings into Zimbabwe currency or Mexican Peso?

FDIC deficit $8.2 billion in Q3
MySpin: The FDIC is BANKRUPT. The FDIC is floating the idea that banks pay their FDIC premium for the next 3 years upfront to get cash. Once that money runs out, what next? Ask banks to pay a premium for next 10 years? I'll tell ya whats next, the taxpayer will print money to pay itself. If that day comes, Gold is definitely where the action will be.

U.S. consumers seem slightly more confident about the economic outlook in November, but their appraisal of short-term prospects remains decidedly glum, according to data released Tuesday by the Conference Board.
My Spin: There is hope yet, the public gets that no real improvement has been made, except a paper shuffle. Now if only people would demand to enforce the law and stop making private debt into public debt to pay for billions in bonuses.


Japan Exports Fall Least in a Year on Global Stimulus

My Spin: Read the reality: Shipments abroad slid 23.2 percent from a year earlier, compared with a 30.6 percent decline in September, the Finance Ministry said today in Tokyo. Get that? A decrease of 23% is great as compared to 30% decline?!? My Rose colored glasses aren't as bright as other peoples.

Monday, November 23, 2009

The next phase of investing

History
If you read my blog, its no secret that 2009 was NOT a good year for my investing. (Gambling?) In March 2009, I wrote and my friend John Chinnock called "the bottom" of the near term Market, within a day or two of the actual bottom SPX 666. The lottery ticket recommendations made at that time paid off between 100% and 300% on investments across the board. Unfortunately for me, I didn't go all in, I treated it like a lottery ticket.
So while those trades where profitable, unfortunately, trying to call a market top took those winnings away. The market top picking started between 930-1000. Although the market only moved up 10-20% from that point, the market stayed high since July, wiping out all my earnings for 2009.

As Gary of the Smart Money Tracker and Karl of The Market Ticker both say, the markets can stay irrational longer than your bank account can handle. Meaning, trying to pick a top isn't a good way of investing.

Resources & Gold Miners
I point this out now because the next leg I am preparing for investing is trying to pick another trend, this time a parabolic bull market up. Since October of 2008, when the gold miner index (GDX) hit 17, I have been a resource bull. Meaning, resources directly or indirectly are a great investment overall, but I like Gold for the "extra fear" and therefore hyper-extension possibilities.

Sometime in the summer of 2009, I got cold feet and dumped my gold miners, probably not the wisest of moves. But it is what it is.

However, as a long term play, I have since October 2008 professed we will see Gold reach all time highs, possibly as high as 2,000 to 8,000 an ounce, but probably more likely between 1,400 and 2,000 an ounce.

Near term bearish resources & Gold Miners

Below is a a quote from another blog post, which sums up why I am against resources....again. Main reason? Because almost everyone thinks skies the limit.

While the fundamentals underpinning the gold price and gold mining stocks remain very positive, a growing subset of investment professionals has been arguing that the fundamentals are already priced in at $1,145 per ounce. Well-known market pundit Robert Prechter, founder of Elliott Wave International, released a bearish report on the gold price in his latest Elliott Wave Theorist publication. He noted that in the past two days, 97% of futures traders report being bullish on the gold price. According to MBH Commodities, this is the highest two-day reading since the organization began keeping this data in 1987. Moreover, the only other time there was a 97% reading was for one day - March 3, 2008 - only two weeks and $30 prior to the gold price reaching its previous all-time high of $1,033 per ounce. Prechter also pointed out that the silver price is still below its March 2008 high of $21.40 per ounce, while 95% of futures traders are bullish on silver. Mr. Prechter argues that the record bullish sentiment readings with respect to the gold price and silver price, along with the divergence of the gold price reaching new highs and the silver price lagging behind, provide strong evidence that the gold price is close to a significant top.

Recent View for next play
I have become interested in a market trend analyst named Harry Dent. Mr. Dent's rational for investing is based on population and market cycle trends. Mr. Dent called the market crash of 2008-2009 I believe 15 years ago, and in his 2009 book "The Great Depression Ahead" calls for natural resources to reach highs late 2009 or into 2010, before a nasty collapse. Unfortunately, this prediction is in a book published Jan of 2009, and his more recent refinements of his predictions are only available if you pay about $300 yearly for his newsletter. I paid for it today, so I have no comment on it yet, nor have not absorbed his latest vision. And quite a bit has happened since January 2009.

This past weekend, Gary of the Smart Money tracker reviewed his view of gold in his paid service. I will not go into detail of his market analysis, if you wish to read, pay his low fee of 80 bucks for six months. Anyone who has an interest in metals/resources should pay for his service.

In any event, in general Gary is looking for a leg down in gold/miners before the next and possibly parabolic rise of this sector higher.

The trick of course is when to get into a play, and when to get out. Gary will give his 2 cents on when to get in, and my opinion may differ than his. But Gary gives much more analysis than I do, so his 2 cents counts more. (hence pay for his services).

The gist is, I plan to ride this next wave down short the market (not short resources). I'll start looking for rolling into precious metals/resources WHEN IT LOOKS LIKE A GIFT. John Chinnock (friend) and my 2006-2008 market purchases where all spot-on for long term. John is and continues to be a sage of market timing. However I am unsure if this next play John will agree with me. This play is more of my opinion, faith in Gary, and a curiosity of Mr. Dent's predictions.

If you continue to read this blog, and plan to follow some of my market investments, I highly recommend paying for Gary of the Smart Money tracker, reading Harry Dent's book, and consider Elliot Wave International (stock charting) to get a reasonably wide view of the markets from different analysis.

One thing I learned in 2009, is don't get cocky, question everyone's 2 cents, scale into positions over time, and go with my gut. My gut says follow Gary's lead, and Mr. Dent a nice coincidence or corroboration to Gary. For now, no resources, and short the market.

See my disclaimer on the right about investing, and good luck to everyone.
And I reserve the right to change my mind completely, with new information. :)

Sunday, November 22, 2009

US Debt Clock

Take a little time this Sunday AM to look at the USDebtClock.org site.
They have added some new information, and when you put your cursor over an item, it now tells you the source for that information. Citing each piece of data's source is a great addition, and one that is made much easier using the internet.

http://www.usdebtclock.org/

Some day, what I think years from now, when the US dollar does finally implodes or to prevent the dollar from imploding US interest rates skyrocket, people will be outraged how did this happen? It's easy, no one cared about the facts of US government financial's. The US Government was treated like an infinite source of wealth. When in reality, it is an infinite source of debt.

I keep wondering, what is the magic tipping point, 100% of GDP in debt, 200%? 10,000%? There has to be a bottom for credit-worthiness.

From WebSufinMurfs FinancialBlog2

Saturday, November 21, 2009

US Dollar Carry Trade

I dislike Glenn Beck. But he does come out with segments that clearly outline critical issues. This video goes over the US debt and the world carry trade, which Japan suffered from 20 years.







Friday, November 20, 2009

A Coin Toss

The markets are pushing into a decision on direction based on longer term trend lines.
So is the market about to go down like a cheap hooker? Or rocket higher?

Its all about the USD valuation, and the devaluation game to get the markets to go higher can continue, but not forever. USD is at about 75 on the charts, somewhere between 65 and 25 would trigger a panic and collapse of the USD. That won't be good for stocks.

From market index perspective, this chart says it all. I am short the market, but not with heavy conviction. If we are significantly lower into Wednesday, I will probably cover a bit in anticipation of black friday doing better than expected.

From WebSufinMurfs FinancialBlog2

Thursday, November 19, 2009

Federal Housing Authority must be abolished

I printed a while ago that the FHA is an abomination and must be closed. Let me expand upon this, ANY business that can be handled privately must be abolished.

The role of a government is to create rules to construct a society we want to live in. FHA is a black hole where trillions of tax dollars are used to subsidize houses people can't pay for.

Taxes in the next 2-4 years are going to skyrocket to levels people will not have believed possible. Federal, State, and local will try everything in their power to resist becomming efficient. A great way for a government to remain inefficient is to just raise more money to paper over inefficiencies.

Of course, no one will avoid this disaster, so instead, we must watch this train wreck in slow motion, until it comes to a head. Then, and only then, will agencies like FHA appear on the chopping block.

So much wealth will be lost in 401k savings, US dollar purchasing power, real estate collapse as houses drop further to pay for the real estate taxes.

But I digress, what I find refreshing is a private company that PROFITS from the existence.
Exerpt:

Yesterday’s subprime is today’s FHA,” Toll said today at a New York conference for builders sponsored by UBS AG. “It’s a definite train wreck and the flag will go up in the next couple of months: Bail us out. Give us more money.” Toll Brothers is the largest U.S. luxury homes builder.

The FHA’s insurance reserve ratio fell to 0.53 percent, the lowest level in history, and more steps are needed to shore up the agency that guarantees one of every five single family loans, Housing and Urban Development Secretary Shaun Donovan said Nov. 12.

Notice what I highlighted in bold? Of course every American is aware of this and all the other near calamity for the economy, since the news does such a great job in reporting what matters. Like the final 3 couples in Dancing with the stars.

UGH!

Wednesday, November 18, 2009

Quuck Comment

Here is a reason to read comments posted, Gary of the Smart Money tracker commented:
Gary said...

Mike,
If I was you I would wait for that heavy selling on strength day. That would give you an edge. 99% of all significant declines have one or more of these at or close to the top.

Anything else and your just guessing at a top in a powerful bull market. That's no edge.

The best we can do in this game is play the edges when we get them and be patient enough to wait for them.

Gary if of course right, and right way more than me, so once again, stop reading my blog, and pay to read his advice. :) Otherwise read mine for the fun of it, not for profit.


Broken record

Facts from my perspective:
NOTHING has fixed the banks, or fundamentals adversely affecting America. Instead we ahve changed laws (no mark to market), fictitious accounting (delaying fixing off-balance sheet debt) and had government bribe people to spend (cash for clunkers, housing tax credit).

The market is ridiculously over-valued, many companies have P/E ratios over 100.

The entire bull run of the market since August is funded by destroying the US Dollar value vs other currencies through reckless spending and converting private company losses into public owned debt.

I started re-entering short, sold gold miners Tuesday. I'll add to them the day SPX either starts o accelerate failing or SPX hits 1120.

Target is 10% lower before re-evaluating final target, whihc in next year or two is SPX 400.

All that matters is the US dollar, is the country going to lose control of it's currency falling?
Or will the currency start to appreciate.
Notice frm the graph, recently USD seems to be finding resistance to falling below 74.75



Tuesday, November 17, 2009

Adding shorts back on

Unfortunately for me, my job will prevent me from checking stocks all Tuesday, which is very very unfortunate. Tuesday the 17th marks what from a charters perspective is the turning point for this ridiculously high move we have seen.

So let me share my plan of losing tons of money with you.

I'll wake up Tuesday AM, check the markets, if down substantially, I'll put some orders in to get into the short side. If the market is flat-ish or up, my orders will trigger on S&P 500 hitting 1120 (1121 is target) to hit the bids on some shorts, and inverse funds. I can do this though Interactive Brokers, which allows trigger orders based on any fund or index.

So if the markets blow right through S&P500 1120 tomorrow, you can just imagine how bad of a day my account had. However, if you are able to watch the screen and you see the markets turn, jump on board.

Target is for S&P500 to resist falling below 1,000, we'll see. The market still goes higher with a lower dollar, god help us all when a weak dollar brings the market down, and a strong market brings the dollar down, then, there is nothing left to counter the stock market slide.

Good luck, and I went flat the gold miners today, GDX at 51.25.

All of this is subject to change, without notice. :)

Monday, November 16, 2009

Charts

A couple of charts, first SPX (S&P 500) then GDX (gold miners).
As my previous post points out, I am once again bailing on GDX hoping to rebuy in cheaper.
The market has had a fantastic run up since march, up 65% on S&P 500. If there is a correction, even if mild, I don't want to be holding longs "hoping" for it to be a mild dip.



From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

Sunday, November 15, 2009

Gold Miners

When it comes to gold miners, I wish back in October 2008 I would have put every nickel into gold miners and walked away for years. Would have saved much anguish. As Gary of the Smart Money tracker points out, trying to time the markets is impossible.

But I am going to try....and possibly fail...to time it again. Since 11/3, I have been back in some gold miners and GDX, with impressive returns, of about 8-20%, not bad for two weeks. Monday I am going to sell until some clearer direction materializes.

If you can stomach the long haul, and you have positions, ignore my waffling. But for now I am going to move back out, and hopefully jump back in when GDX is back down to the bull trend line.

I adjusted the recommended stock plays accordingly


UPDATE: I just read Gary of Smart Money tracker report, he has similar opinions. I can't recommend strongly enough paying for his service. I was reviewing EWI & TheChartStore that pushed me to run like a little girl away from the scary gold miners.

Saturday, November 14, 2009

Increasing control by central authorities

The effort to control pollution through an international body that supersede the US jurisdiction of itself will be a major, if not traitorous event it that is signed.

Next up is a Bill called the "Anti-Counterfeiting Trade Agreement", which among other things, legalizes and forces Internet Service Providers to monitor it's users, and to remove internet access, without due process, when the ISP deems it believes you are not following the law.

Think about this, suppose the phone company was forced years ago to listen in on all phone calls, and remove phone service if the topics you discussed where deemed illegal?
Without due process?
Citizens would revolt. But unfortunately, the aging baby boomers, don't get Tech, and will probably write it off as a necessary evil. Since the majority won't care, the minority that does will suffer for decade(s).

This isn't a financial event directly, but indirectly this slippery slope could cut off critical information flow. I could see a day that "private corporate documents" from wikileaks is deemed as a copyright infringement for example.

Already the number of corporations that control the majority of information companies in the US went from 50 to 5, controlling information flow. (see graph below)

This bill should not pass, due to the illegality of circumventing due process, and privacy. But my guess is in a few years, this will be reality. And less information flow puts the individual (small investor) at a greater disadvantage larger organizations (companies).

Once again, thanks to blog reader Ryan Swan for the video link.


From WebSufinMurfs FinancialBlog2



Friday, November 13, 2009

The Great Depression Currency Games, Revisited

During the Great Depression, there was a global race to devalue currency. All countries competed to make their currency weaker. This only intensified issues between countries fostering more political instability.

Today, the race is back, as the US tries to devalue, rather successfully, its currency lower than everyone else's. What the US needs is strong leadership, fiscal responsibility, and enforcement of law. True leadership. But that's hard to do. So instead, it's currency debasement to "fool" the public that the economy is doing fine......even though weekly over 300,000 jobs are lost.

Case in point, back in the year 2000, the US stock market hit all-time highs. When the stock market is adjusted against gold prices, it is a high still stands to this day, even though in US dollar terms the market went much higher in 2007.

OK, so you don't like gold as a metric, I can understand that, its just a shiny rock, no different than a piece of steel, or a brick, a piece of material.

If you like the US dollar as a "unit of value" instead, then the US dollar's value should be compared to other currencies. For this metric, we will use "US Dollar Spot price". I found this on TheChartStore.com.

In 2000, the US stock market, S&P 500 hit about 1550 for most of that year. The US dollar spot price was about 120.

Today, the S&P 500 is about 1,100, and the US dollar spot price is about 75.

Lets have fun with math shall we? Lets convert the US stock market index to "international dollars" ,the value of US dollar to the world currencies.

Year 2000 US dollars 120 x 1,100 = 132,000
March 2009 US Dollars 90 x 1,100 = 99,000
Today US dollars 75 x 1,100 = 82,500

So, in effect, the US government has placed a hidden "tax" by devaluing the USD by 37.5% since 2000. Since March 2009 devalued by about 17%. And that doesn't include inflationary living costs.

But this game has a finite end, somewhere between 65 and 25, the USD devaluation would cause a panic and the dollar could collapse.

It doesn't comes as surprise that the world doesn't like the US winning the currency devaluation game, as some countries announce they will buy US dollars to try to prop it up.

This game is a dangerous one, the US is in effect blackmailing the world into buying IOU's (treasuries) to try to keep the dollar up. If the world can turn the US dollar around and raise its value, the US stock market is about to fall.

If the world cant hold the dollar up, or decides to give up on the US dollar, then a collapse would force the US government to raise interest rates to try to defend the dollar. That would cripple the economy.

For now, the dollar can decline, the market can rise, until the wall is hit.


Thursday, November 12, 2009

New 52 week highs....barely

Today the US stock market made new 52 week highs, with S&P 500 making a new high at 1105.37.
Also the USD dollar made new lows, and gold miners made new 52 week highs.

At this point it is clear, there in only one stock, and that is the US dollar valuation. As the Dollar falls, the markets rise and vice-versa.

I am sticking with GDX needs to close above 50.50 for it to be time to buy more miners OR when gold miners retreat to the bull trend line, about 44.

I can see the Dow Jones hitting 12,000 or 13,000 now before rolling over.
But its all dicey from here.

From WebSufinMurfs FinancialBlog2




Wednesday, November 11, 2009

False Economic Recovery

The stock market valuation going higher is a parlor trick by devaluing the USD. The Market Ticker has an excellent comparison of market valuations to US dollar devaluations.

It is a near perfect correlation. Therefore there is no significant economic recovery, but a destruction of the US dollar's value, and therefore long term destruction of US buying power, and it's economic future. If this trend continues, we will see real unemployment at 25%, and gas moving towards 5 bucks a gallon and continue much higher.

For detailed analysis and graphs, click here.

Assuming this correlation continues, gold will run much higher. Which is why I am nervous on gold. The USD may firm up rather sharply and soon.

Tension in the Market Analyzers

All the services I read are in high gear, with everyone watching the trend lines I keep drawing for my blog. Some say breaking higher, others, its the final swan dive.

Some say gold about to mega rally into Q1 2010, others time for a swan dive of epic proportions.

You can see the tension by just watching the market trading, its trying to keep between the two major trend lines. I think the finally act will be violent, and sudden, catching both sides off guard.

So its anyone's guess. I am holding my Gold Miners .... nervously. Ready to buy more if GDX closes above 50.50.

Safes is always cash. Good luck.

Tuesday, November 10, 2009

Gold Miners on a tear

If I had to guess, today the Gold miners made a short term top, now its time for it to retreat. But if GDX was to close ABOVE the downward trend line, I will buy more miners with some reasonable short stops.

GDX made a bee line drive from 42 up to above the upper trend line in about 2 weeks.
From WebSufinMurfs FinancialBlog2

Monday, November 9, 2009

History Repeating Itself

I try not to be superstitious, but the graph I drew a few weeks back of the last Great Depression and what is being experienced now in the markets is eerily parallel.

Looking at a long term view of 1929 through 1930, from a "chart pattern" perspective, there are some very curious parallels when using trend lines. By no means should anyone use this as a basis for heavy investment decisions. But it is starting to give me pause on how far this market can run up. I suspect the ending may be different, instead of a deflationary collapse we may have an inflationary currency collapse.

But really, its anyones guess how this ends, and it's really up to the US government to determine the outcome. Make no mistake, whatever the outcome, THERE ARE NO VICTIMS. The outcome is in the making, by deciding to not enforce the law, and to give trillions to unsound businesses in the form of direct and indirect taxpayer money.


First, the last great depression, second, the SPX as of today.
From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

This week in Charts

Charts speak louder than blowhard opinions like mine. So here are some charts, what does it tell you?

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

Sunday, November 8, 2009

What is going on in WebSurfinMurfs head

Life is picking up and is pretty freaking busy. My job has been full swing busy for last few weeks, and looks so straight into January. I just bought a house last week, and now I must move. And my son is about to hit 7 months, I suspect crawling any day now.

On top of all that, I was lucky enough to catch a break buying into the gold miners at the right time. So now what for investing?

Since life is getting so busy, I will continue to post, unfortunately I suspect my depth of posts will continue to suffer. I want to finish my money series, that I started a few weeks ago.

I wanted to take a step back and assess where the heck the markets are, and where they are going.

First off, I professed, and continue to profess the markets are going to 30 to 60% lower from the near term market high. Either the high has already passed ( SPX 1101.36) , or there is more to see first. To me, the markets ending up much lower is a "fact" not a question.
The question is, how does the market manifest the 50% lower target. It could be in the USD dollar crashing, (becoming worth less than other currencies), and the stocks don't rise as high as the dollar's fall. (example, dollar worth 1/4 of today, but markets up only 25% higher)

Or the USD, as I think we will see, firms up and gains vs other currencies, dragging the market lower. I have no clue if this is next week to start, has started, or won't start until March 2010.

NEAR TERM

But for the NEAR term, I can't add to shorts until I see the market retreating. What I am *guessing* at here is gold moves higher regardless, and gold will see 1,300 an ounce.

There are two bloggers that have my ear on gold. As always Gary of The Smart Money Tracker. Gary is frankly in a class of his own with gold. You would do you bank account a service to never read my blog again, buy his subscription, and read AND invest.

The other is a newbie to my ear, a guy named Harry Dent. He wrote a book called "The Great Depression Ahead: How to Prosper in the Debt Crisis of 2010 - 2012". I listened to him in this podcast (click) and he made a ton of sense for his predictions. I am still a little leery of him, mainly since his investment service (which I will not pay for) is $5,000 for 1 year. Anyone who charges that much better either be THAT RIGHT or a snake oil salesman.
In any event, Mr. Dent calls for gold much higher in to January.

The last influence is a guy I know told me he just sold GDX 2 weeks ago. Since his timing is from the "non-investor" mentality, I figure his selling was likely the worst time possible. Yea, a bit crude as a reason for me to buy into the miners, but the market is after screwing with your head so you make the worst moves possible.

And since I have been on my high horse about natural resources is a good investment, I want to put my money where my mouth is. But I may change my mind at any time and go back to full pessimist mode.

So for now, I am back onto the GDX band wagon, I expect GDX to pull back to 44-43 before breaking 50. And if/when GDX closes above 50, we may see a really good ride for a while. Two other ideas for investing is RJA (food) at 7.43, DBA (food) at 25.52, and energy companies (XLE) 57.08. Set stops, buy in slowly, still be cautious. A catastrophic fall could be in the cards for the entire market.

I also have a TINY amount of shorts on my murfs stock plays.

Good luck.

Saturday, November 7, 2009

Russian Inflation

I ran across this video on youtube. It SEEMS genuine, but I have not verified any of the content, so take it with a grain of salt.

But if true, it does seem like a Russian who experienced inflation/deflation explains from his perspective what happened in Russia. But keep in mind, Russia and the USA have different government structures. But as the USA centralizes power, and takes over companies, it becomes more like Russia from the perspective of the government controlling the economy.

Again, not up to my normal video series, but interesting none the less.

Friday, November 6, 2009

Gold Miner Play

First, let me be clear, I see high risk everywhere. By no means should anyone reading this post take this for the same confidence I had in buying gold miners back in October 2008.

Buying into the Gold Miner ETF, GDX is a decent risk play at this point, with a defined entry/exit point. I plan on buying additional shares if/when GDX hits the bull trend line again (lower line on picture) . I may buy may on any given day, with stops to build a position in case miners make a run for the upper bear trend line. My stop (exit) point will be 1 buck below the trend line when GDX hits the bull trend line.

Right now, that is about 41.50. I'll sell vast majority of miners if we hit that point again. Keep in mind some sort of devastating event could cause the miners to "gap down" over night, and best price you can get is much lower than your stop. However, I would think that kind of fear would keep gold up, not down.

If interest in gold miners, you can get higher returns and possibly lower risk by using the links on this blog to investigate individual miners. I have gold miners on my "stock play" tab on the right.

I'll probably go back to posting news items on this blog, until GDX breaks out of the upper line depicted, or breaks below the bull trend line.
From WebSufinMurfs FinancialBlog2


Thursday, November 5, 2009

Glass Steagall Repeal Wrong

Quick short summary of Glass-Steagall act for readers who don't know what it is. (click for Wikipedia) In the Great Depression back in the 1929 era, many laws where written to prevent repeating that event. Glass-Steagall was one of laws created to forbid banks from taking high risk. The logic being people's life savings should not be gambled by banks for profit/bonuses.

CitiGroup was formed in 1998 by merging CitiCorp and Weill’s Travelers Group Inc., which owned the investment firm Salomon Smith Barney Holdings Inc. The last remaining rules of Glass-Steagall act where removed by Senator Phil Gramm (Republican of Texas) and in the House of Representatives by Jim Leach (R-Iowa) in 1999. The bills were passed by a Republican majority, basically following party lines by a 54-44 vote in the Senate[12] and by a bi-partisan 343-86 vote in the House of Representatives.[13] .

John Reed of CitiGroup now apologies for his role in repealing the act.

My opinion:
Repealing Glass-Steagall is one of the corner stones for setting up the financial devastation that the entire banking industry faces, including CitiGroups woes.
Mr. Reed, you did nothing wrong, your interest in is your business. At the time you wanted largest profits by injecting high risk into banking for your own profit, as well as stock holders at that time.

The politicians are suppose to represent the people's interest. They are at fault for passing the law. There is plenty of actions that brought us here politically, as I covered in "Whos to blame Republicans or Democrats"
In turn, the public is at fault, since they don't care about what Washington does enough to vote out both parties, its party on for high power money interests. Voting is based on issues that will never resolve such as opinions on abortion, prayer in schools, etc. Its like people voting on who likes Coke or Pepsi. Who cares! In 1999, the politicians should have been voted out of office who supported the bill, with a public outcry to protect their life savings. Unfortunately, the default behavior for everything is react, not proactive.

BACK to INVESTING: All of this is moot, what matters for investing is what is best to put life savings in. Until Mark to Market accounting returns, off balance sheet debts are put onto the books, and regulate Credit Default Swaps occurs, I cannot in good faith invest my personal savings in most financial companies. I say most since, not all companies dove into this high risk arena, do you homework before investing.


Wednesday, November 4, 2009

What is up with Gold?

Gold and oil spiked higher today, dragging up commodity stocks. US stayed about the same. US markets barely higher.

So whats going on with gold/oil? There is no news out to explain it. What that could mean is some interesting news is about to hit, and big money poured into gold/oil for the big play. Could be Israel taking out Iran nukes, could be the US fed announcing something unexpected Wednesday, or could be a final run up before a big down.

I can hope the Fed or government will announce something to actually enforce the law and bring large banks into compliance. That would unfortunately tank the markets, but would probably spike gold/us dollar. I doubt the right thing will be done until the market is so low, it doesn't matter.

I started buying back gold miners, as I mentioned Thursday, but not with much conviction. I still don't have much conviction, but I'll try to add to the play. I am changing the text on my stock plays to CONSIDER SLOWLY buying gold miners on pullbacks, with stop positions.

I expect by Monday we will all know if there is some news later that explains todays market action. For now, I have the charts below.

If you want to go "long" something, my mantra has always been go long commodities. Gold miners is a little riskier now that the stock popped up, but still worth buying a tiny bit and see where it gets you.

NOTE: 2:15 pm Wednesday is Federal Reserve Bank announcement, this and Fridays job numbers could move the market significantly.

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

Tuesday, November 3, 2009

Busy Week

Last week and this week have been very busy for me. So my posts may get a little skimpy.
I hope to return to better posts than the last 2 week soon.

Whats there to say? market barely up, nothing much has changed.
Friday was a HUGE dump, and today a very weak bounce. Thats not looking very promising for a market rally.

Key levels: Dow Jones below 9600 on a closing bases will put us below the bull trend line, and the final index will have broken the trend.

Dollar is bouncing around a little, but holding its own.

Gold is getting a little fiesty and going up a little.

Good luck.

Monday, November 2, 2009

UGLY Market

Wednesday thru Friday was major ping-pong action as the market violently moved back and forth. It has the effect of turning me around so I didn't know which way I was facing.

Below are the stock charts, and it isn't pretty. Ask small children to leave the room before you view. The DJIA the last bastion of optimism for the bulls. The USD is showing some signs of softness, that could change on a dime.

I am flip-flopping more than a Politician. Frankly, toss a coin, and that's the direction in the next few months. but I am throwing my hat into bad decline. To prevent getting pushed around more from the market, I am going to try to build a position as we decline and continue to do so.

If you want to go long something, Gold miners are not that bad here, but just be careful. (GDX)

Elliot Wave International has been talking about this stock pattern for years, and its finally here. One thing I deviate from the chartists is I realize the government can continually change the rules to get another pop. But the US Dollar's valuation is starting to get to the point of severe permanent damage.

It boils down to how are the bank losses going to manifest? Stock market decline or US dollar destruction. That, you will have to ask Ben Bernanke on which outcome he prefers. If you want to bet the "favorite" , bet he will throw the US dollar out the window to keep prices up. That will lead to US government having severe issues, possibly collapse.

Even though I distrust Mr. Bernanke, I am still betting he won't destroy the US dollar to the point of causing permanent damage.

The charts below. SPX is to go below 666 in the next month or year. There is always the chance of yet another counter rally, but I think its getting long in the tooth.

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2