Category Archives: Stock market

by | January 10, 2014 · 2:20 pm

U.S. nonfarm payrolls data

Yesterday we saw another mixed trading session, and today market participants will wait for the job report at 08:30 ET. The U.S stock index futures is up before the data that shows us that American employers last year added the most workers since 2005.

It is probably added 197,000 jobs in December, which means 2,27 million jobs in 2013 and that will be the strongest year in 8 years. The unemployment rate remain at a five-year low, landing on 7% in December last year. A strong report job data today could make the Fed to reduce its bond-buying stimulus and start the day it starts hiking rates.

The Fed will have a new meeting at Jan 28 – 29. In December they announced that they will reduce its monthly bond-buying program with $10 billion. The reason why they pay $75 billion instead of $85 billion is the recovery in the labor market. The QE program they started has helped the S&P 500 to reach a new high from a 12-year low in 2009.

Market makers will look at earnings numbers now. Many retailers will probably deliver good fourth quarter reports, but what about the banks? Next week we will see reports from Bank of America, Goldman Sachs Group and JP Morgan Chase & Co. That will be interesting numbers.

A slow start in the stock market so far in 2014 have boosted gold prices. Gold ended a 12-year bull run and lost 28% of its value last year. Economic data has showed us that the U.S economy is gaining steam. If the number today exceeds investors expectations, gold will probably go to $1200 or below.

Important news today: Non-Farm Employment Change & Unemployment Rate at 8:30am.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | January 8, 2014 · 11:48 am

Health-care bull

The stock indices are up and the fear goes down. Vix is down 4,7%, trading at 12,92. People are bullish and now it is time for the companies to deliver. The sentiment is still very high, so it will be interesting to see the companies economical numbers and their earnings growth.

2013 was an extremely good year in the stock market, but I don`t think 2014 is going to be the same. We did not see a big correction last year. It all went up. But this year will probably be different. It is headed for some corrections and this year will be more volatile than last year.

Three rounds of QE have helped the indices to increase and reach a new all time high. The S&P 500 is up 173% from its twelve-year low in 2009. Janet Yellen will replace Ben Bernanke as a FED chairman on Jan 31. Janet Yellen won Senate confirmation (56-26 votes) to become the 15th chairman of the FED.

The Nasdaq Biotechnology Index is up 1,4%. Health-care shares in the S&P 500 is up 0,3% in 2014, and this is the most among the ten main industries. Investors are waiting for the Fed minutes today, and news about the job report on friday. This is important news that can drive the market.

Today, we will know what outgoing Fed Chairman Ben Bernanke really want to do with the gradual tapering of $10 billion a month. Today`s minutes will tell us that this was a narrower view to some few FOMC members or not.

Follow the oil price now. This is a risky bet. The oil price can plunge and Opec can face huge problems. If this is the scenario, I think it will be very good news for the U.S consumers. Who want cheaper gasoline?

Middle East is the key and U.S Secretary of State John Kerry are working with difficult cases like Shia-dominated government in Baghdad, the Islamic State in Iraq and al Sham (ISIS), Al Qaeda’s fast-growing franchise operating in Syria, Sunni groups marginalized by Iraqi Prime Minister Nouri al Maliki’s authoritarian policies, Egypt, Tunisia and energy producers like Nigeria, Venezuela and Russia.

I mention this because it all affects the oil price, and what`s happend in this areas can change the game very fast. This is a big risk in 2014. So, the happenings can drive the oil prices up or down. It depends on whats happening?

The unemployment data from EU yesterday was disappointing. In Italy the unemployment rate is at the all-time high of 12,6% (for November), and for the broader EU unemployment, the rate is now at 12,1%. Just below its record 12,2%. The unemployment rate is U.S is just above 7%.

It looked like we had a game changer in November – December last year, but take a look at the chart below. CRB have turned around and are still declining. It is below 50 MA and I will wait for this to turn up again.

New today: ADP Non-Farm Employment Change at 8:15am, Crude Oil Inventories at 10:30am, 10 Year Note Auction at 1:01pm, FOMC Meeting Minutes at 2:00pm.

CRB 07012014

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | January 6, 2014 · 2:00 pm

January Effect

The so-called “January Effect” is not what is was anymore. It is not so important as it was and more and more people are using tax-sheltered retirement plans, and that is one of the most important reasons why they tend not to sell at the end of the year for a tax loss.

Earlier, the “January effect” affected small cap stocks much more than the larger one. This trend is declining much because the investors have adjusted for it.

Definition:

A general increase in stock prices during the month of January. This rally is generally attributed to an increase in buying, which follows the drop in price that typically happens in December when investors, seeking to create tax losses to offset capital gains, prompt a sell-off.

Please note that the optimism in the market right now is historic. The charts show us that we are very close to a tipping point, but it could take some time before a major reversal occurs.

Price is always the most important and the most valuable indicator. The price in the indexes must show some reversal pattern on a daily chart, but until then, the uptrend remains intact.

January 2013 was strong, but in the last 15 years it has not been that strong. December has been a very strong month the last 15 years. How will january 2014 be? The first trading day of 2014, all the major indices was trading lower. It is the first time in six years the S&P 500 and Dow ended the first trading session of the year in red territory.

The optimism in the market tends to be very strong in the early stages of a bear market, and the charts tells us the truth. It happens again and again and again. We saw it in 2007. People poured more money into different U.S stock funds in October last year, and that is more money than any time in at least 7 years. Keep in mind that this includes the 2007 stock market top.

News today: ISM Non-Manufacturing PMI & Factory Orders at 10:00am.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | December 27, 2013 · 1:52 pm

Prepare for next year

It was not so hard to earn money in 2013 if you invested in U.S stocks. 9 out of 10 stocks in the S&P 500 was in positive territory. But everything associated with gold gave you losses. Did you sell the gold related investments in 2013 and what are you gonna do with it next year?

The gold is down about 30% in 2013, so owning a stake in a gold mine was not the smart way to make money this year. The worst U.S large Cap stocks was Newmont Mining. The second largest gold producer is down about 50%, and 30% of its corporate office staff is eliminated.

They are not only building cars in China. They are building factories to meet the demand for cars because the sales of automobiles are surging in China. The main partner of Ford Motor is Chongqing Changan Automobile Co. (000625). Changan`s earnings per share is up 400% and are the best International stock!

To be an investor is like being a school student. You have to do your homework every day. I don`t say you have to follow every stock you have in your portfolio with every tick of intraday trading.

What I prefer is to follow the stocks and the stock market for important changes over time. Sometimes it is important to evaluate and update the portfolio, like now, in the year end.

You can save money and take advantage of last minute tax savings in preparation of your portfolio. If you do all the things alone, you may do some work. You have to prepare your portfolio for the next year. I have created a few things to consider:

  1. Tax planning. Take a good look at your portfolio and check your winners and losers. You can offset capital gains with capital losses. If you have lost everything in one stock, you can sell it before the end of the year to offset any pending gains you may have on other stocks. Check the IRS rules and talk with a tax adviser before you take any tax decisions.

  1. Goals. What is your goals for 2014? What have happened so far this year? What do you think will happen next year? What is your plan for next year? Do you want to spend more money in the financial markets? How will your economy be next year? marriage or divorce? Some kids? What about you family situation? Some dramatic changes in 2013, or next year? You get the idea. Create a trading plan for 2014.

  2. The right balance. Do you have all you eggs in one bag? What is your mix today. Do you only go for stocks? Do you have bonds? Currency? Do you have the right mix in your portfolio or do you need some adjustments?

2013 have been a great year in the stock market. Many investors have done it better than the market in 2013. Is this going to continue next year? Try to follow the market and read the news and do as best as you can to understand them. Don`t always listen to everything people say on TV, and think by yourself. Be smart and look for great opportunities and be a winner in the market next year!

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | December 19, 2013 · 1:06 pm

Rally!

Yesterday, I was sitting in front of the TV…..eh…… in front of my computer, watching live streams with Chairman Ben Bernanke. He did not disappoint the markets. The DOW was up +1,84% and the S&P 500 was up +1,7%. What a rally!!!! Ho ho ho.

They are not going to taper now in December, but plan to start tapering in January next year. There was two good news yesterday: 1. The Fed will cut back it`s bond purchases by $10 billion, and 2. The interest rates could remain low even if unemployment drops below 6,5%. This is music in investors ears!

Gold went in the opposite direction and didn`t like the news from the Fed. Gold is now trading near the critical $1200 level. I have written about this critical level before, and this is the break even level for the mining companies.

The mining companies doesn`t earn money if the price goes below $1200. It will be very exiting to follow the gold price in the future. Watch out for this level and see if this level holds. The news yesterday was bearish for the gold, but bullish for the dollar.

A lot of investors and money makers have lost a lot of money in their gold investments since 2011 and that is because they didn`t recognize and adapt to the changing trend. We are in the same situation right now, where a lot of people don`t really know what is to come in 2014. Will we see a rally in gold?

As you can see from the gold chart, we are at a stage one basing phase. 150 and 200 moving averages is slowing down and start to go sideways. This will go on for about 6-12 months. So, now you know when to expect the gold bull market start again.

In this one phase stage, a market goes both up and down and it looks like it goes nowhere. Many people are getting frustrated and start to give up and others that is not in the market stops paying attention to the market. After a bear market, a stage one basing phase will follow and make a new way for a real bull market.

We have seen many bubbles like the internet bubble, housing bubble and the market crash in 2008. Now, it seems like a new bubble is on the way. The Fed are on the way to build a dangerous federal government debt bubble.

It can be avoided by reducing the Congress spending deficit. But in the budget deal last week, they increased the government spending. All this money printing have been a disaster for the U.S.

In Mars next year, we have seen a bull market lasting for five years. What do you think will happen to QE if the economy slows again? Goldman Sachs predict the domestic GDP growth to hit 3% next year (1,7% in 2013). I hope he has right. I look forward to 2014.

News today: Unemployment Claims at 8:30am, Existing Home Sales & Philly Fed Manufacturing Index at 10:00am.

Markets up

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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