Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Copper/Gold Ratio Would Change the Macro - 21st Oct 20
Are We Entering Stagflation That Will Boost Gold Price - 21st Oct 20
Crude Oil Price Stalls In Resistance Zone - 21st Oct 20
High-Profile Billionaire Gives Urgent Message to Stock Investors - 21st Oct 20
What's it Like to be a Budgie - Unique in a Cage 4K VR 360 - 21st Oct 20
Auto Trading: A Beginner Guide to Automation in Forex - 21st Oct 20
Gold Price Trend Forecast into 2021, Is Intel Dying?, Can Trump Win 2020? - 20th Oct 20
Gold Asks Where Is The Inflation - 20th Oct 20
Last Chance for this FREE Online Trading Course Worth $129 value - 20th Oct 20
More Short-term Stock Market Weakness Ahead - 20th Oct 20
Dell S3220DGF 32 Inch Curved Gaming Monitor Unboxing and Stand Assembly and Range of Movement - 20th Oct 20
Best Retail POS Software In Australia - 20th Oct 20
From Recession to an Ever-Deeper One - 19th Oct 20
Wales Closes Border With England, Stranded Motorists on Severn Bridge? Covid-19 Police Road Blocks - 19th Oct 20
Commodity Bull Market Cycle Starts with Euro and Dollar Trend Changes - 19th Oct 20
Stock Market Melt-Up Triggered a Short Squeeze In The NASDAQ and a Utilities Breakout - 19th Oct 20
Silver is Like Gold on Steroids - 19th Oct 20
Countdown to Election Mediocrity: Why Gold and Silver Can Protect Your Wealth - 19th Oct 20
“Hypergrowth” Is Spilling Into the Stock Market Like Never Before - 19th Oct 20
Is Oculus Quest 2 Good Upgrade for Samsung Gear VR Users? - 19th Oct 20
Low US Dollar Risky for Gold - 17th Oct 20
US 2020 Election: Are American's ready for Trump 2nd Term Twilight Zone Presidency? - 17th Oct 20
Custom Ryzen 5950x, 5900x, 5800x , RTX 3080, 3070 64gb DDR4 Gaming PC System Build Specs - 17th Oct 20
Gold Jumps above $1,900 Again - 16th Oct 20
US Economic Recovery Is in Need of Some Rescue - 16th Oct 20
Why You Should Focus on Growth Stocks Today - 16th Oct 20
Why Now is BEST Time to Upgrade Your PC System for Years - Ryzen 5000 CPUs, Nvidia RTX 3000 GPU's - 16th Oct 20
Beware of Trump’s October (November?) Election Surprise - 15th Oct 20
Stock Market SPY Retesting Critical Resistance From Fibonacci Price Amplitude Arc - 15th Oct 20
Fed Chairman Begs Congress to Stimulate Beleaguered US Economy - 15th Oct 20
Is Gold Market Going Back Into the 1970s? - 15th Oct 20
Things you Should know before Trade Cryptos - 15th Oct 20
Gold and Silver Price Ready For Another Rally Attempt - 14th Oct 20
Do Low Interest Rates Mean Higher Stocks? Not so Fast… - 14th Oct 20
US Debt Is Going Up but Leaving GDP Behind - 14th Oct 20
Dell S3220DGF 31.5 Inch VA Gaming Monitor Amazon Prime Day Bargain Price! But WIll it Get Delivered? - 14th Oct 20
Karcher K7 Pressure Washer Amazon Prime Day Bargain 51% Discount! - 14th Oct 20
Top Strategies Day Traders Adopt - 14th Oct 20
AMD is KILLING Intel as Ryzen Zen 3 Takes Gaming Crown, AMD Set to Achieve CPU Market Dominance - 13th Oct 20
Amazon Prime Day Real or Fake Sales to Get Rid of Dead Stock? - 13th Oct 20
Stock Market Short-term Top Expected - 13th Oct 20
Fun Stuff to Do with a Budgie or Parakeet, a Child's Best Pet Bird Friend - 13th Oct 20
Who Will Win the Race to Open a Casino in Japan? - 13th Oct 20
Fear Grips Stock Market Short-Sellers -- What to Make of It - 12th Oct 20
For Some Remote Workers, It Pays to Stay Home… If Home Stays Local - 12th Oct 20
A Big Move In Silver: Watch The Currency Markets - 12th Oct 20
Precious Metals and Commodities Comprehensive - 11th Oct 20
The Election Does Not Matter, Stick With Stock Winners Like Clean Energy - 11th Oct 20
Gold Stocks Are Cheap, But Not for Long - 11th Oct 20
Gold Miners Ready to Fall Further - 10th Oct 29
What Happens When the Stumble-Through Economy Stalls - 10th Oct 29
This Is What The Stock Market Is Saying About Trump’s Re-Election - 10th Oct 29
Here Is Everything You Must Know About Insolvency - 10th Oct 29
Sheffield Coronavirus Warning - UK Heading for Higher Covid-19 Infections than April Peak! - 10th Oct 29
Q2 Was Disastrous. But What’s Next for the US Economy – and Gold? - 9th Oct 20
Q4 Market Forecast: How to Invest in a World Awash in Debt - 9th Oct 20
A complete paradigm shift will make gold the generational trade - 9th Oct 20
Why You Should Look for Stocks Climbing Out of a “Big Base” - 9th Oct 20
UK Coronavirus Pandemic Wave 2 - Daily Covid-19 Positive Test Cases Forecast - 9th Oct 20
Ryzen ZEN 3: The Final Nail in Intel's Coffin! Cinebench Scores 5300x, 5600x, 5800x, 5900x 5950x - 9th Oct 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Stock Market Final Friday of 2013 – No Worries?

Stock-Markets / Stock Markets 2013 Dec 27, 2013 - 03:56 PM GMT

By: PhilStockWorld

Stock-Markets

1.3M US Citizens get cut off tomorrow.

That's right, we're finally pulling the plug on those lazy, unemployed leeches that have been draining $300M a week from us job creators (though, obviously, we didn't create jobs for them!). That's $15.6Bn a year – enough money to pay for 3 nuclear submarines! And what's more important to America – feeding 1.3M families (1% of the workforce) the week after Christmas or having 1% more submarines in our fleet? The choices couldn't be more clear for our Congress!


This is a real, substantial victory for our Repbulican way of life. Clearly a lack of jobs is not the fault of the system that has exported over 3M jobs overseas in the last decade alone but a failure of the weak, who didn't work hard enough or pray hard enough to make the cut. Come on, we all know one of them, the so-called "unemployed," who have been sucking at the Government teat for too long, when all they have to do is get off the couch and go back to work!

As the great and powerful Ronald Reagan once said: "Unemployment insurance is a pre-paid vacation for freeloaders." Moderate Republicans urged Boehner and House Majority Leader Eric Cantor (R-Va.) to rescue jobless benefits for the longterm unemployed earlier in December, saying the issue was "important to many American families." But Boehner would only consider the proposal if cuts were made elsewhere and job growth guaranteed, and the measure ultimately did not make it into Sen. Patty Murray (D-Wash.) and Rep. Paul Ryan's (R-Wis.) budget deal.

"Speaker Boehner and fellow Washington Republicans are hopelessly out-of-touch, and their decision to Scrooge over a million unemployed Americans three days after Christmas is the latest and among the worst examples of it," Jeremy Funk, communications director of Americans United for Change, said. "All these struggling Americans got from the GOP for Christmas was a ‘Get Employed Soon’ card."

Funk warned cuts to jobless benefits for the long-term unemployed would only put more Americans out of work, and bring a chain reaction of economic fallout in 2014. And, of course, there's nothing to be done about it now, Congress left for vacation without extending the benefits – there's nothing to be done about it now.

XRT WEEKLYThe good news is, this will drop our unemployment rate down below 6% as these freeloaders will no longer be counted as unemployed – problem solved! And every week, more and more people will lose their benefits – it's the gift that will keep on giving in 2014 and one of the reasons we've been a bit skeptical of this rally, even as we make record highs into the year's end.

As you can see from Dave Fry's XRT chart (we're short), no amount of bad news is going to knock back these indexes as we move into the last few days of the year – the numbers next year's sales brochures will be based on, so the investment advisers can reel in the next batch of suckers who want to chase this year's performance.

The retail sector is up 28% this year, about what the rest of the market is seeing, and the fact that earnings are not even up 5% doesn't seem to bother anyone. After all, what's a little 23%+ multiple expansion between friends? Of couse, when you can buy the stocks with monopoly money printed fresh by the Fed every month – you can expect to pay a little extra for stocks based on your declining Dollars.

UUP WEEKLYJust this morning, in fact, the Dollar crashed 1%, to 79.82, falling below that key support on Dave's UUP chart. Logically, a declining Dollar makes for a stronger Yen and that should hurt the Nikkei (we're short), but no such luck. It should raise the price of gold (we're long), but no luck there either and it should raise the levels of the Dollar-priced indexes (we're short) but those are flat. Interesting times indeed!

Of course the weak Dollar is pushing 10-year notes up over 3%, causing 30-year mortgage rates to tip over the 4.5% line, up from 3.35% a year ago – another 23%+ expansion (34%, actually)! If you, like our Fed, believe that 34% annual jumps in Mortgage Rates and Treasury yields are non-inflationary, then TBills are certainly the way to go!

In July 2012, the 10-year yield was 1.38%, less than 1/2 of the current rate, we finished last year at 1.78%, so up 68% in the past 12 months. Keep in mind this is DESPITE the Fed pouring over $1Tn into the market in a specifically targeted program with the stated goal of keeping long-term rates DOWN!

Dave's TLT chart indicates a floor at around $102 on TLT and that held up yesterday but we're down 16% since June and people who have been that badly burned by the bond market are going to be slow to return. Of course, that is also part of the Fed's plan as investors are given no alternative but to invest in US equities and, as I often say, that is the entire extent of our long-term bullish premise.

Short-term, we have been stunned by the lack of even a small correction as the S&P has climbed 10% since October, outpaced by the Nasdaq, which is now just under 4,200, up 27% from 3,300 in June and up 15% from 3,650 in October.

Certainly we can get used to our indexes making 15% per quarter. According to the MSM, this is not an indication of a bubble, merely a strong, healthy market in a non-inflationary environment. Why would we worry that this kind of growth is unsustainable, especially when GDP is growing 1% per quarter, this all makes perfect sense, I suppose. The Investors "Intelligence" Survey shows us just how exuberant we're getting:

Wow, almost 20% more so than 1999 and cracking over 2007 with ease as well. Clearly bears are in season and we'll have to wait just a little while until the last of them are hunted down and killed. In fact, the VIX hit 11.69 overnight, it's lowest level since early 2007. That's making it very cheap to buy puts (and destroying the value of any puts you do own) but, then again, what kind of fool would want to buy a put in a bull market – especially one that's about to cut 1.3M losers off the befefit rolls?

Have a great weekend,

- Phil

Click here for a free trial to Stock World Weekly.

www.philstockworld.com

Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

© 2013 Copyright  PhilStockWorld - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

PhilStockWorld Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules