Rally Continues.. Chart Shows Glimpse of Change

Today the market is rallying. China announced a rate cut based on slower growth. Europe has repeated their stance on easy monetary policy. The Federal Reserve seems the only group that speaks of tightening its policy with their end to Quantitative Easing (QE). The rest of the world seems focused on a race toward zero interest rates. The US economy remains strong compared to the rest of the world.

The weekly Dow chart shows a few revealing items. The recent pullback to its 50 day moving average was a good buying opportunity. Based upon volume and market indicators this rally should continue. Pay particular attention to the lows during each of the past 3 market sell-offs which are underlined. In each case the market dropped but then immediately rallied back the same day. These "sell-off tails," as I call them, have telegraphed a later market pullback of greater magnitude. I don't think there is even a name for this pattern in Candlestick analysis. But this is an example of the technicals revealing something that the greater market is not.

The Dow large cap stocks are still paying dividends over 2-3% and are more stable than most banks. As the rest of the world interest rates go lower, say to 1.5%, this should attract capital to US markets, which will in turn, drive US real-rates-of-return lower. Equities should also appreciate to reflect these real rates of return on dividend yields. For example, if GE now pays a 2.5% dividend at $25 per share, its stock price theoretically will appreciate to $41.66 if world interest rates are at 1.5%, assuming no change in dividend. That is phenomenal! And that is why we are seeing the markets rally today.

Remember the "sell-off tails" because they will be important levels of support/resistance after the current rally runs its course.

Note: The above is for informational purposes only. Any decision to buy, sell, or hold a specific investment for a specific portfolio should be reviewed by your investment adviser.

Market Showing Volatility.. Is "Goldilocks" Back???

chart courtesy of www.realtimestockquotes.com

The Dow Jones Industrial Average finished Friday's trading session up 208+ points. All markets rallied on the positive jobs number.. all markets except commodities. Investors are interpreting this and other economic data to mean that the U.S. economy is healthy and is "the only game in town" when compared to the weakness everywhere else in the world. Investors are trying to take advantage of the safe haven that the U.S. markets provide. Media experts were starting to use the word "Goldilocks" economy, once again, a term which was used quite a lot in the 1990's. Goldilocks implies an economy that is "not-to-cold, not-to-hot, but just right." And gold is being declared dead.

Prior to Friday's session we saw large amounts of selling. This followed the recent "pop" to new market highs immediately prior to options expiration a week earlier. It seems probable the market's new high was due to options traders and specialists not wanting to be on the wrong side of the trade once the market finally did start to decline. The following week is when we started to see the pullback to the 50 day moving average.

The above chart shows there is still room for pullback. The Dow has not hit its 200 day moving average since about 2012. Therefore, it seems this would be a healthy stopping point for any further selling. The U.S. markets continue to be the best place to put assets at this time. Many Dow stocks are paying well above a 2% dividend and they are more financially sound than most banks. Any significant selling is still a good buying opportunity. This volatility could continue through the first quarter of 2015 as the market tries to sort out if-and-when the Fed will raise interest rates. Conversely, the lower interest rates go the further bank margins are squeezed. A strong dollar can also mean trouble for the multinationals who will be reporting earnings soon. But for now, the market prefers to entertain the "Goldilocks" idea. Until something changes the market party continues.

Note: The above is for informational purposes only. Any decision to buy, sell, or hold any specific asset for a portfolio should be reviewed by your portfolio manager.

Remembering 9/11...Victims and Their Families

Cantor Fitzgerald, the investment firm lost 658 of its 900+ employees on 9/11. Howard Lutnick, CEO was spared that day because he took his son to school. Every year on 9/11 the company donates 100% of its revenues to charities around the world. Last year they raised $12 million. A great example of taking a tragedy and turning it into something positive. Remember the victims and their families today.

Market Ready to Pull Back

Chart courtesy of www.realtimestockquote.com

As the chart shows the Dow Jones Industrial Average has had a great run since 2011. It appears we have reached a "double top" of sorts. Most of the indicators are leaning to an overbought level ready to pull back. This is not to say the bull market is over; rather, we are entering into a seasonal time of selling. It should present more buying opportunities. Several of the large cap stocks are paying dividends well above 2%. And they are more stable than most banks. This is too good to pass up.

Be wary of experts who say that the excess liquidity in the market can only be good for the market. What they are not saying is that bank margins are being squeezed the lower the interest rates. That could potentially be a problem for this market.

Note: The above is for informational purposes only. Any decision to buy, sell, or hold a specific investment should first be reviewed with your personal investment adviser.

Market Continues to Rally

Today the Dow Jones Industrial Average closed at 17,055. It is 13 points away from breaking its record high set on July 3rd. There was favorable news that Citigroup agreed to a $7 billion offer with the US Government. There is also news that the economy in Europe is sluggish and calls there are being made for more stimulus measures.

Of course this market will correct at some point. For now, the US stock market has the best risk/return ratio for investors. Here are a few reasons why interest rates will not be going up anytime soon:

1. Most economies across the world are still sluggish.

2. The US is the best place for investing in safe haven assets. As long as foreign buying of US Treasuries continues the rates will remain low.

3. The Fed and US Treasury continue their cycle of repaying old debt with more new debt. History may reveal this as the greatest pyramid scheme in history. They will not be the ones to orchestrate a rate hike knowing that their old debt will be paid off at higher rates. So far it has been working for them.

There are still tremendous investing opportunities in this market. Particularly the dividend paying blue chip stocks. Many of these companies are paying a 3% dividend and they are more stable than most banks.

Sometimes Life Happens...

On June 2, 2014 my life changed forever. I found myself in the emergency room, lying on a stretcher, having a discussion with the doctor. "It looks like you have leukemia," were his words to me. All I could do was lay there and receive it. I had suspected something was wrong which brought me to the hospital in the first place. That morning as I was ready to begin my day, I found I could not walk from one room to another without being extremely tired and had a rapid pulse. My symptoms started a few weeks earlier when people at work told me, "You don't look right." "But I feel fine," I thought. There were the simple aches and pains. I thought they were just from working around the house, maybe a little over exertion. That fateful morning I was already on my way to work. I thought about maybe working a half-day, and then going to see my doctor. Instead I decided to turn around and go to the ER. I am glad I did!

The doctor told me it looked like I have Chronic Lymphocytic Leukemia, or CLL. More tests would have to be done. My blood counts were extremely bad. My body was destroying its own red blood cells which were down to about 1/3 of normal. My white blood cells (WBCs) were extremely high. My platelets were almost non existent. It was a miracle I was still walking, talking, and even driving! They began to transfuse four units of blood into me. A bone marrow biopsy later confirmed the diagnosis.

I found myself talking to the Oncologist. The good news is that CLL is treatable. There are new chemotherapy medications which are available. I thought to myself: "Chemo? That is for sick people!" And I was extremely sick. The chemo was to begin the following week.

More importantly, as I lay on that stretcher, I turned to my Maker. I gave it all over to Him. I thought, "Lord, you have saved me in the past from some situations where I should be dead. You would not save me from those just to have this end in defeat. That is not how you work. I don't know what your plan is for me, but I will trust you."

As I am writing this I have completed three chemotherapy treatments out of six. I go again this week for my fourth treatment. The last three treatments are spaced one month apart. The side effects I experienced were like having a bad flu: nausea, vomiting, fever, chills. The first treatment had the worst side effects. The others had almost none. I received a total of seven units of blood. My lab work is looking better now and I am able to do more physical activity. My body does not seem to be destroying its red blood cells anymore. I am getting stronger every day. Many friends and family have prayed for me. Prayer is powerful!

I am starting a new blog: Combat Cancer which will have more info on this topic. Stay tuned for more about my comeback!

Market Poised to Move Yet Higher

charts courtesy of www.realtimestockquote.com

Both the Daily and Weekly Dow charts show the market is poised to move higher. This keeps in line with our forecast for a continuation of the rally until next month. The traditional "sell in May, go away" seems to apply this year. Yes, there was some market volatility due to the geopolitical situation across the world. There is always a risk of volatility and should presently be used as a buying opportunity. The market is still awash in liquidity due to the Fed and Treasury continuing to print and borrow money to service the National Debt. The Fed will not be raising interest rates anytime soon because they do not want to squash the tepid growth which we are seeing in the economy. You can be sure they are continually monitoring their policy of buying and selling US Treasuries on the open market to coincide with this fact.

Here are some excellent dividend paying blue chip stocks which are available to investors who are willing to take some market risk. Remember the bank savings and treasury rates are paying less than 1% annually. The following stocks are paying over a 2% dividend and are more stable than most banks:

AT & T paying 5.4% with stock price of $34.30

CSCO paying 3.4% with stock price of $21.64

F paying 3.2% with stock price of $15.47

GE paying 3.4% with stock price of $25.40

The above information is for information purposes only. Any decision to buy, sell, or hold a specific investment for a specific portfolio should be reviewed with your investment advisor.

Dow Up 28%

chart courtesy of www.realtimestockquotes.com

This market continues to show signs of a continuation of the rally which started in December 2012 at about the 12,500 level. The daily chart seems to show the makings of a head and shoulders top. However this is not seen very well on the weekly chart. We can expect the rally to continue through spring for the traditional "sell in May, then go away."

Here are a few reasons why this market will continue to rally:

1. Earnings have started to come in weaker for some companies. Economic growth forecasts have been revised downward. This will neutralize any chance of the Fed tapering its policy of printing money.

2. The Fed has NO CHOICE but to keep the liquidity faucets running. If it begins to taper the whole "house of cards" will come down. The borrowing and printing of money to keep servicing our national debt will some day be known as one of the biggest pyramid schemes. This column wrote about the documentary titled, "The End of the Road: How Money Became Worthless" where this policy is explained in very simple terms. Everyone should watch this great documentary. You can order a copy from amazon.com at the following link.

http://www.amazon.com/s/ref=nb_sb_ss_i_0_16?url=search-alias%3Dmovies-tv&field-keywords=end+of+the+road+how+money+became+worthless&sprefix=end+of+the+road+%2Cmovies-tv%2C303

3. Many Dow stocks are still paying 2-3% dividends. These companies are more stable than most banks. This is better than most of the longest term fixed income investments which are available.

The above information is for educational purposes only. Any decision to buy, sell, or hold, any specific investment for your portfolio should be reviewed with your investment advisor.