Monday Morning Chartology--2/11/13

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The Morning Call

2/11/13

The Market

           

    Technical

       Monday Morning Chartology The S&P continues to hug the upper boundary of its short term uptrend; and Friday it closed above the upper boundary of the very tight trading range of the last two weeks.  This price action suggests to me that 14140/1576 remains an upside target.

          

GLD remains inside a pennant pattern formed by the lower boundary of a very short term uptrend and the upper boundary of a short term downtrend.  Technically, analysts assume that a break of one of these boundaries will mark the near term move in the direction of the break.

           

            Russia adding to its gold reserves (medium):

            http://www.zerohedge.com/news/2013-02-10/russia-flips-petrodollar-its-head-exporting-crude-buying-record-gold

            VIX remains in an intermediate term downtrend---a positive for stocks.

            Some history of February pin action from Stock Traders Almanac (short):

            http://blog.stocktradersalmanac.com/post/DJIA-DIA-February-Expiration-Week-Up-6-of-Last-7

            Another sentiment indicator (short):

            http://advisorperspectives.com/dshort/guest/Blair-Jensen-130211-Gauging-Investor-Sentiment-with-Twitter.php

            Update on ‘the best stock market indicator ever’:

            http://advisorperspectives.com/dshort/guest/John-Carlucci-Best-Indicator-Ever-Update.php

    Fundamental

    

      Investing for Survival---A Defensive Strategy from Adam Taggart

• Exchange paper assets for tangible ones. Acquire exposure to the precious metals; we recommend having at least 10% of your net worth in gold and silver (for those new to owning precious metals, you may want to read our buyer's guide). Above that, if possible, invest in productive hard assets. Holdings like farmland, timberland, energy deposits, and mineral/water rights are assets that will produce units that will generate an income for you.
• Find a sympatico adviser to manage any remaining paper wealth. For many reasons, most of us will still keep a percentage of our wealth in the stock and bond markets (in retirement/pension accounts, 529 plans, etc). If you're in the defensive camp, make sure the adviser managing your money is, too. There are several we endorse, but we're impartial about whether you work with them or not. The important point here is to work with the adviser whose outlook is most closely aligned with yours.
• Cultivate resiliency. Most Peak Prosperity readers are well-aware of our recommendations here. Start at the individual level to prepare both physically and emotionally so that whatever the future brings, your quality of life is as least impacted as possible.
• Cultivate community. Whatever your plans, a support network will help you achieve them better, and likely faster, too. Plus, it gives you the added insurance of assistance should your best-laid plans not play out as you expect them to (which happens frequently). Invest in fostering collaborative relationships in your neighborhood, or join existing communities relevant to your location or interests.
• Defend your income stream(s). Assess your employment situation – how vulnerable is your income? Explore ways to make yourself more valuable to your employer, add additional source(s) of income, and/or create your own business. Steady income makes challenging times much easier to bear by giving you the flexibility to explore different approaches that may work better for the new reality. Without that ability to absorb failure, your options are often much more limited.

If you take the above steps, regardless of what happens, you'll be able to sleep at night knowing that you've acted conscientiously according to your convictions. And in the event the bulls turn out to be 'right', few of these steps will serve you poorly. In a secular bull market, hard assets should still appreciate measurably. And personal and community resiliency is always a net positive, regardless of the economic environment.
But if the bulls turn out to be the ones in error, the value of these actions could be priceless.

 News on Stocks in Our Portfolios

 

TC Pipelines (TCP): Q4 EPS of $0.56 misses by $0.07.

Economics

   This Week’s Data

   Other

            Robert Shiller on housing (short):

            http://pragcap.com/robert-shiller-dont-invest-in-housing

            The G20 meet this week; the currency war will be topic numero uno (medium):

            http://www.zerohedge.com/news/2013-02-11/quiet-start-g-20-currency-warfare-conference-week

            Adding to the currency problem is a new proposal from Italy to issue a local currency (medium):

            http://www.zerohedge.com/news/2013-02-10/berlusconi-ally-supports-alternative-currency-euro

            Will Egypt follow Venezuela devaluing its currency (medium):

            http://www.zerohedge.com/news/2013-02-10/egypt-runs-out-dollars-it-next-devaluation-bandwagon

Politics

  Domestic

  International

           

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.