Monday, May 21, 2012

The Morning Call + Subscriber Alert + A classic Dow Sell signal



The Market
Technical

Monday Morning Chartology


As you can see, the S&P is approaching a range with multiple support levels. With this kind of congestion, I expect a slow down in the rate of decline and, hopefully, the establishment of a new lower boundary of its short term trading range.




GLD makes a great rebound. Notice the similarity to the late December/early January sell off and bounce.
http://www.zerohedge.com/news/why-has-gold-fallen-price-and-what-outlook





The VIX soared again on Friday. While it has not quite met the time element of our time and distance discipline, it has more than satisfied the distance element, thus confirming the break above the upper boundary of its short term trading range. This is not a positive for stocks.




We now have a classic Dow sell signal (short):
http://blog.stocktradersalmanac.com/post/DJIA--DJT-Breach-Recent-Lows-Trigger-Dow-Theory-Sell-Signal

Fundamental

The latest from David Rosenberg (medium):
http://www.zerohedge.com/news/david-rosenberg-despair-begets-hope

Subscriber Alert

The following stocks have traded below the upper boundary of their Buy Value Range and are, therefore, being Added to their respective Buy Lists. Our Portfolios own shares in all these stocks. None will be Bought today.

In the Dividend Growth Portfolio: United Parcel Services (UPS-$74)

In the High Yield Portfolio: United Parcel Services (UPS-$74) Kinder Morgan Energy Ptrs (KMP-$77)

In the Aggressive Growth Portfolio: Blackrock (BLK-$172), Staples (SPLS-$13)


Economics

This Week’s Data

Other


US manufacturing continues to improve (short):
http://mjperry.blogspot.com/2012/05/future-of-american-manufacturing-looks.html

US debt and economic growth (5 minute video):
http://www.zerohedge.com/news/biderman-malinvestment-and-diminishing-returns-intervention

Is the Fed already in the midst of Twist 2 (medium):
http://www.zerohedge.com/news/time-operation-twist-1-over-fed-will-have-quietly-completed-40-operation-twist-2-well

Politics

Domestic


Missile defense for wimps (medium):
http://www.nationalreview.com/articles/300198/missile-defense-wimps-clifford-d-may


Steve Cook received his education in investments from Harvard, where he earned an MBA, New York University, where he did post graduate work in economics and financial analysis and the CFA Institute, where he earned the Chartered Financial Analysts designation in 1973. His 40 years of investment experience includes institutional portfolio management at Scudder, Stevens and Clark and Bear Stearns. Steve's goal at Strategic Stock Investments is to help other investors build wealth and benefit from the investing lessons he learned the hard way.