Category Archives: Stock market

by | October 1, 2013 · 12:21 pm

Government Shutdown!

The VIX was up 10% yesterday and 10% on friday. Now it is at a high level. After the markets closed, the S&P was down only 0,6%. The S&P now have a quarterly gain of 4,7%. I will follow the vix very close this week. Normally, when the vix is so high, we will see a big sell off in the stock market. Washington D.C have a huge impact of the worlds stock exchange now.

The federal government will shut down for the first time in 17 years as the Congress failed to break a bitter budget standoff over the presidents health care law. Asian markets rise despite shutdown.

This is the first US government shutdown in 17 years. Next date to have a look at is October 17. USA won`t have enough money to pay all of it`s bills sometimes between Oct. 22 and Oct.31. 800.000 federal employees is out of work today. Millions of people are to work without pay. The US army will still be at work. The police will still be on the streets. Markets seem unbothered by that.

As the shutdown in well know, investors will focus on thirt-quarter earnings reports. According to Factset data, the stock prices of the S&P stocks rise and the earning growth are trending in the opposite direction. The estimates for the third quarter call for only 3,2% growth. Down from 3,8% in the second quarter. Stock prices follow earnings, so that can prove problematic!

News today: ISM Manufacturing PMI at 10:00am. Tomorrow, Fed chairman Ben Bernanke will speak at 3:30pm. Looking forward to that. It seems like the vix are rising too late compared to S&P. As you can see below, the vix is now below 17, but looking back to may this year they goes in opposite direction.

VIX 30.09.2013

SPX 30.09.2013

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 | September 30, 2013 · 1:00 pm

The biggest threat to this bull market

Investors tend to listen to Washington D.C more now than focusing on individual economics and corporate fundamentals emanating from different financial offices around the world. People fretted over whether or not the FED would start tapering or not, and now everyone is shocked by the decision Ben Bernanke did; no tapering.

Finally, the decision of no tapering is over, so now people can start to buy stock again. Or…… What is the problem now? What do we have to fear? Now, people are panicked by the possibility of a government shutdwon, because of the partisan impasse on the budget and debt ceiling limit.

Stocks went down last week on a light volume. VIX rise and we are near the 50-day moving average in the index. It seems like investors are waiting for a rally. Which means; no fear. We have been in this situation before, and this will hopefulle be no different.

Do you remember the fiscal cliff in desember last year? Well, nothing happend. It will be a deal, and then we will move on again. Government shutdown sounds like a scary thing, but it isn`t. Since 1975, we have had 17 of them.

History tells us that the politicans will discuss and compromise very quickly, and the average shutdown duration is 6,4 days. Remember what Ben Bernanke said when he was not tapering: “Upcoming fiscal debates may involve additional risks to financial markets and to the broader economy.”

Credit default swap (CDS) prices for U.S. Treasury notes aren’t giving us any warning signs. CDS are trading at 23 basis points compared to 41 for the last three years. History tells us that during the last two shutdowns, the stock market didn`t move. The biggest threat to this bull market is not the government.

Today is the last day of september, october has always been a challenging month in the stock market. Smart money will probably look for this to change. I will follow the index when it touch the 50 day moving averange.

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 | September 25, 2013 · 12:27 pm

Where to go now?

A lot of investors are confused now. Despite the poor market behavior, and the seasoning weakness, the volatility is still very low. The market remain fearless! And that is at the ATH (all time high)!? (SPX is down 1,8% from it`s ATH) P/E for the USA is 20. In Europe it`s only 10! You know where to invest.

Draghi said he will pump a lot of money into the European banks if needed. That statement will push the gold prices up, and resistance for the gold is still $1400. I think the producers are glad to see a stabile gold price, because they are often signing contracts only once a year.

Normally, the gold prices goes up when the dollar goes down, but sometimes we have seen their both are going down in the same direction. That`s unusual. A rally in the dollar could probably push down the gold price, and maybe down to $1000.

If the gold prices goes up to $1500, the cost will also rise. As the goldprices have declined for a long time now, many miners have to cut their cost. So, stabile goldprice is good for the mining companies.

The European economy has emerged from the recession, but the growth has still very little momentum and remains dependent on the demand from Brazil and China. In addition, the European sector is very sensitive to the decisions made in the white house. Many things can still happen with the Syria case. Investors don`t like war.

So far this month, hedge funds are up 1,7% while SPX is up 5,7%. Warren Buffet called the FED; the worlds greatest hedgefund in the world. Funny! When FED is beginning to taper, the markets will go down. If the interest rates goes up and if the bond market falls, the FED will continue to print money. I will follow these news today: Core Durable Goods Orders at 8:30am, New Home Sales at 10:00am, Crude Oil Inventories at 10:30am.

dollar

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 | September 24, 2013 · 12:54 pm

Terrible week?

Most of the investors do wrong tings with their own portfolio right now. The future is very, very excited and I think we will see one of the biggest moves in a very long time. One of the biggests opportunities in decades.

It`s a lot of noice out there. The market we have today looks like the mid 90`s. That time, we saw a big rally. Bullish markets tend to go much higher then expected, and that can go on in a very long time. Now it is very similar.

In the mid 90`s we saw a rally because the bond market crached, and at the same time we saw a surge in interest rates. Money came from the bond market and got into the stock market. Bond hedge funds plummet.

Bond investors are running like crazy from bond funds now and $123 billion disappeared only in june this year. Today we see the biggest interest rates surge in at least 50 years. The growth is slow like it was in the mid 90`s. GDP was below 1% and China was slowing too. The volatility is very low.

It`s a lot of money on the way into the stock market. But investors will be more selective than never before. Stockpicking is the key. It seems to be very bad for weak stocks. Great stocks will do it much, much better. It will be a huge rally in superior stocks.

Europe`s largest economy, Germany, are growing faster now, and the second biggest economy in Europe, France, albeit marginally for the first time in nineteen months. It seems to be an upswing in the European markets right now.

Today I will look at these news:

S&P/CS composite at 9:00am

CB Consumer Confidence at 10:00am

It is the first day today that Goldman Sachs (GS), Nike (NKE), and Visa (V) are officially part of the Dow 30.

SPX is overbought and I see a rally in MACD. I think it will be a huge drop before february 15 2014. The drop can come earlier, but it depends on different things like Syria, Iran, QE or China to name something. Historically, the volatility is increasing from september to november. The week we are in now has a bad history. This week has been down seventeen times the last twentytwo years. It doesn`t mean it will happen again, but it`s something to keep in mind.

Take a closer look at the chart below. NYMO, or McClellan oscilliator, a measure of overbought/underbought conditions in the markets. It is at it`s highest since july 2011. At that point the market plummet 20%! It doesn`t mean that it will happen again, and I am not trying to make you afraid. It`s just statestics.

NYMO

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 | September 20, 2013 · 11:35 am

“Quadruple Witching”

The news from the FED was good news for the markets. As you already know, the FED will continue to print money and that is stock, commodities and bond markets. More fresh money into the markets means more money into stocks, commodities and bonds.

A new FED chairman/woman will take place early in 2014. When is the tapering going to take place? It should be now, but it didn`t start now, and I don`t think it will be before the next FED chairman/woman is on place. In the meantime; investors are trying to figure out when it will happen, because it will affect the markets.

Options programs expires today, and that happens four times a year. Equity options, stock index futures, stock index options and single stock futures are expiring too. This moments tend to move the markets, but sometimes it only goes sideways. This happenings is called “Quadruple Witching”.

I will keep an eye on the crude oil today. Trading range for crude oil has been between 102 and 110. It is time for a breakout because this trading range has been a sideways trading range for eight weeks now.

Technical resistance in Gold are at $1400. Support at $1307. Right now the price is $1364. I will look for breakout on this targets, and a close above $1400 are bullish. I see a strong support on $1307. Gold have been in an downtrend for a long time now.

Take a close look at the SPY index. MACD is bullish, but the RSI is high. Normally when it breaks the upper bollinger band, it`s a game changer. You can see in the chart how it worked back in may. Next week I will have a very special history about next week. In the meantime, I will spend this weekend trying to figure out what FED people are thinking right now.

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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