HandsOn

More Gloom and Doom - RBS analyst predicting a crash from mid-July to Oct

Lili.. — Wed, 18 Jun 2008 13:16:30 GMT

Stocks, Debt Yet to Face Worst of Sell-Off, RBS's Janjuah Says

By Alexis Xydias

June 18 (Bloomberg) -- Stock and credit markets still face the worst of the slump that started almost eight months ago, according to a Royal Bank of Scotland Group Plc strategist.

An economic slowdown and inflation have put central bankers ``into a dangerous corner'' where the chance of a ``major policy error has just super-spiked,'' Bob Janjuah, a credit strategist at Royal Bank in London, wrote in a report dated June 11. A potential rally in equity indexes between late June and early July ``will be the significant opportunity this year to get short stocks,'' he wrote.

The MSCI World Index has lost 13 percent since a record in October as bank writedowns stemming from the credit turmoil approach $400 billion. The index is down 4.1 percent this month after the Federal Reserve and the European Central Bank policy makers indicated interest rates may need to increase as the threat of inflation intensifies.

``Mid-July through to October is likely to be the most bearish period we will experience in the bear market that began in the fourth quarter of last year,'' Janjuah wrote.

The Standard & Poor's 500 Index, a measure for U.S. stocks, may fall to 1,050 in the sell-off, a 22 percent decline from current levels, Janjuah wrote. The benchmark is down 14 percent since Oct. 9.

In a short sale, investors and traders borrow stock to sell it, on expectations prices will fall.

The Markit iTraxx Crossover Index, a measure that tracks the cost of protecting European corporate bonds from defaults, may climb to as high as 700 basis points, from about 472 at the end of last week, the note said. The index peaked at 653 in March, according to JPMorgan Chase & Co.

OOOPS...

uncleharley — Sat, 14 Nov 2009 16:49:56 GMT

Some of you may recall a thread that was started last july asking for projections of where the stock market was going for the rest of the year. As I recall I constructed a chart of the S&P 500 on which I drew some trend lines, some resistance & support lines, as well as Fibonacci retracement levels. I then made the projection that the S&P 500 should reach the 1225 to 1250 range by 1/1/10. At this point in time that projection seems to be a bit optomistic. The following chart demonstrates why;

http://stockcharts.com/h-sc/ui?s=$NYA&p=W&b=3&g=0&id=p15104473569&a=183437908

The above chart plots out the weekly price, volume, & momentum of the trading on the New York Stock exchange for the past several years. The chart shows nearly steady growth in price, volume, & momentum until price and momentum peaked in '07. Price and momentum then dropped on increasing volume in '08, tracking the sell off of the bear market. This year, '09, price and momentum have been rising on volume that has been decreasing for the past 12 months. Steadily decreasing volume generally indicates decreasing support or interest in the market. The chart also indicates that price and momentum may have peaked in the past several weeks.

For those reasons I no longer believe that the broader stock market has much further to go on this leg. I do not believe that this is a time to short the market, but many investors may want to take some profits or become a bit less agressive in their positions. In spite of favorable seasonal factors I do not see any more new highs for this year and possibly for next year.

Gold anyone???

uncleharley — Mon, 16 Nov 2009 18:43:43 GMT

Since central banks are net buyers of gold bullion for the first year in 20, perhaps precious metals are becoming the asset class thats going to glow.

http://www.cnbc.com/id/33960029"%22%20target=%22_blank%22%3Ehttp://www.cnbc.com/id/33960029"%3C/a%3E"

Active trading question/what I have done since June.

Mcgragor — Sat, 07 Nov 2009 19:30:36 GMT

A few months ago I started a thread on trading the market for quick swings--basicly capturing as little as .0025%, but try for more. I had some good advice given to me at the time and I implemented the strategy with TD Ameritrade back in June.

As of today, just trading in and out on a couple of stocks and ETFS, I am up 8% on my original investment.

This account represents what is normally in cash or bonds, so if I stop here, leave it in cash and don't do anything until next June, I've already beat the return on what this cash would have gained me.

Nothing scientific here...simply buy the market on dips and sell into ralley next day. If it doesn't ralley, hold or double down etc...

Buy only ETFs and good quality stocks so that if you do get stuck in a trade its not that big of a deal.

What's even more interesting, is I never had more than about 25% tops invested at one time out of this cash account to earn this return. Most of the time I was in and out of the market with less than 10%. Basicly churning the account over and over...

Yes, TD Ameritrade has made a killing off of me, but as long as I make money who cares.

Anyone else do this or something similar? I do realize that the market direction was generally up from June until Oct, so the bias was on my side and yes I probably could have made that much if not more having it in stocks the entire time, but that is not the goal for this account. This is the safety net account that lets me sleep at night when the next 2008 hits.

This is in a IRA, if it wasn't, it wouldn't be worth it since most of my trades were for 1% or less. It would be a huge headache to try and keep track of all the cost etc if it was in taxable.

Just interested in anybody's thoughts on this. I enjoy doing it, otherwise it would be a hastle.

Hands On Contest 11/9/09 to 11/13/09

HerbDeno — Fri, 13 Nov 2009 09:55:07 GMT

Will sell GE and MMM positions at the open today. Will add details after I know them.

Herb

Day-trading

NaterN — Wed, 11 Nov 2009 21:46:02 GMT

While you're not strictly day-trading, you're pretty close. As you well know, that strategy is near, if not at, the top for risk. I'm confused. Why would yoou use your "lets me sleep at night" money for that kind of activity?

HO Contest YTD returns after cob 10/30/09

rascfw — Sat, 31 Oct 2009 17:05:38 GMT

Sorry about the delay. I was busy and forgot to open the month-end post.

Contestants, please report your month-end valuations for cob 10/30/09. Place your name and total portfolio value in the title and then report a breakdown of share balances per investment in the body of your post.

example
title of post
rascfw... $10,288
body of post
1,000 BATS
2,500 SPDRS
5,000 VAMPS

Regards,
Susan

Technical Analysis for Selling A Fund

rondom — Sat, 17 Oct 2009 20:56:41 GMT

Interested how some of you determine when its time to sell a mutual fund. I suppose many would have sold everything 2 years ago before the serious paper or real loss. If you held on, maybe you have recovered more or less. I know one way some use to make a decision is to sell when the S+P 500 goes below the 200 day moving average. If you did that now and waited to break the 200 day, you would have a loss of about 20% from todays top. Some will use a percent from a recent high for the fund. If you own OAKBX now you will loose about 14% if it breaks 200 day MA. Who wants to have those losses? You might use a percent drop from a recent high. The high now is 25.28. You might say I sell if it goes 7% below the recent high. So you sell at 23.51. If you use a trendline and sell if price breaks that at about 24.50.

What do you do if anything to decide when to sell a fund?

Handson, Tracking Oct. 30, 2009

ben egbert — Fri, 30 Oct 2009 22:16:35 GMT

Everything flat to down for the month

FUND ENDING TOT RETURN

VTSMX $25.42 +21.86%

DIA_(DJIA) $97.06 +13.54%

IWM_(R2K) $56.33 +22.03%

SPY_(SP500) $103.56 +16.76%

GLOBAL $14779 +19.66%

ENERGY $45965 +29.46%

Global and Energy do not include distributions.

INDEX ENDING

SP500 1036.18

DJIA 9712.73

NASDAQ 2045.11

Last months conversation

http://socialize.morningstar.com/NewSocialize/forums/p/245543/2711011.aspx#2711011

IRA to ROTH conversions

ben egbert — Wed, 04 Nov 2009 17:10:45 GMT

I heard that we can convert IRA to ROTH this year and then average the taxes over the next two years.

I have been aggressively converting ROTH to IRA since my retirement in 2004 and have almost equalized the amount in my IRA and ROTH accounts. This is my last year before I must start taking MRD. Since my only income is SS, conversions or draws under $20,000 result in zero or near zero taxes.

So I am thinking to make a big conversion this year, then the following year start MRD. My calculated MRD will be well below $20k.

Of course I will do nothing until I see my tax preparer. There is no way I will attempt to understand tax code on my own. Just starting a conversation here on what seems a good topic.

HO Contest 11/02/09 thru 11/6/09

uncleharley — Wed, 04 Nov 2009 14:15:09 GMT

Post your trades here.

What effect will CIT bankruptcy have on market tomorrow?

ben egbert — Mon, 02 Nov 2009 01:18:33 GMT

Just a topical question, I have no plans to do anything, but this seems a fairly major if not totally unexpected deal.

HO Contest 10/26/09 to 10/30/09

uncleharley — Mon, 26 Oct 2009 17:13:01 GMT

Contestents please post your trades here

sharp increase in foreclosures next year as 5 year option ARMs start to readjust

Santa Cruz — Fri, 23 Oct 2009 21:13:16 GMT

September 23, 2009

San Francisco could see a sharp increase in foreclosures next year as 5 year option ARMs start to readjust

Thousands of Bay Area homes have a ticking time bomb embedded in their mortgage. The homes were purchased with loans known as option ARMs, short for adjustable rate mortgages.

Next year, many option ARM payments will begin to readjust, slamming borrowers with dramatically higher monthly mortgage bills. Analysts say that could unleash the next big wave of foreclosures - and home-loan data show that the risky loans were heavily used in the Bay Area.

That's because option ARMs let borrowers choose to make very low payments for the first five years. During that initial period, borrowers can pick their payment option - they can pay interest and principal, interest only, or a minimum monthly payment that doesn't even cover the interest.

Fitch said 94 percent of borrowers elected to make minimum payments only. The shortfall gets added to their loan balance, which is called negative amortization. The amount they owe can grow substantially.

unemployment 1948 1958 1974 1881 1990 2001 and 2007

Santa Cruz — Tue, 13 Oct 2009 03:53:23 GMT

The Buck Drops Here????

uncleharley — Fri, 16 Oct 2009 01:58:05 GMT

We have been bombarded by predictions of gloom and doom for the USD and our economy for several years if not decades. Many of these preditions have been well thought out and others have been silly. Most of them come from perma-bears that are focused more on politics than anything economic. The link below takes us to an article on Bloomberg.com where the currencey trader of the 3rd largest bank in Japan expressing his opinion of where the buck is going and what he bases his prediction on. It is worth the read, even if you don't believe him.

http://www.bloomberg.com/apps/news?pid=20601109&sid=a_A5nqmw9Dq8

PIMCO Dumps $80 Billion of Fed-Sponsored Agencies On Taxpayer's Lap; Makes Over $1 Billion

Santa Cruz — Wed, 21 Oct 2009 16:32:42 GMT

Is this true

Tyler Durden=fight club!!!

PIMCO Dumps $80 Billion of Fed-Sponsored Agencies On Taxpayer's Lap; Makes Over $1 Billion

Submitted by Tyler Durden on 10/20/2009 17:16 -0500

As everyone else has been cheering the revival of the housing bubble, one person has been busy offloading a significant portion of his exposure to housing: Bill Gross. And the direct sponsor of billions of dollars hitting Mr. Gross' Wells Fargo banking account, why, the US taxpayer of course, courtesy of the Fed's printing press which continues keeping prices artificially high. With the Fed en route to purchase nearly one and a half trillion in Agency and MBS paper (for now), it has found eager sellers in the face of PIMCO. MarketWatch reports that PIMCO sold $30 billion in agency paper in September alone, and has sold over $80 billion year to date.

Total Return Fund's holdings of mortgage-related securities fell from 38% of the portfolio on Aug. 31 to 22% on Sept. 30, the latest date for which figures are available. On July 31, 47% of the fund was in mortgages -- the fund's largest category holding at that time.

The fund's assets under management on July 31, Aug. 31 and Sept. 30 were $169 billion, $177.5 billion and $185.7 billion, respectively.

The last time Total Return Fund had less allocated to mortgages was Feb. 28, 2005, when the level was 19%. The fund's assets under management at that time were $75.8 billion.

PIMCO is not shy in disclosing it is more than happy to take US taxpayers for the proverbial ride:

"Pimco's significant overweight to high-quality, agency mortgage-backed securities has recently been strongly positive for returns. With MBS valuations having richened substantially, and the Federal Reserve's mortgage-purchase program slated to end in March of next year, Pimco plans on moving to an underweight in an effort to benefit from an expected cheapening of agency MBS."

PIMCO's Total Return Fund had about $120 billion in MBS, or 86% of total holdings, on February 28. The number has declined to a meager $40 billion at September 30. A Price/Yield for an indicative Fannie 30 Year 5% MBS, indicates that on average the price for comparable securities has risen by about 200 bps, ignoring the current yield. Therefore, PIMCO has likely made well over $1 billion in profit on the $80 billion in mortgage-related securities it has sold off. The invoice to the US taxpayer is already in the mail and is expected to be paid for at some point in the next decade when demand for US securities drops off a cliff once the Fed stops monetizing.

Why I Am Bearish for US Equities

lucasd6 — Fri, 09 Oct 2009 03:14:16 GMT

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What Would It Take?

lucasd6 — Mon, 19 Oct 2009 22:15:24 GMT

This is intended to be the third post of the series "Why I'm Bearish..." and "OK, What If..".

In the first post, I showed a potential cascade effect caused by our very large - and continuing - deficits and what I suggested would be a period of high inflation.

Many thoughtful posters did not agree.

I then referred to a post by rayden on the Market Insight forum that suggested a dire future based on deflation and massive debt foreclosures.

Many thoughtful posters offered additional suggestions but no direct refutation.

I now ask all of you thoughtful posters what it would take for you to change your view?

My view could be changed by a number of things:

(1) Congress gets real and sincerely attacks the deficits, (2) lenders start lending like crazy for whatever reason, (3) coporate profits begin to rise at a significant rate and reach a level sufficient to justify 1000 on the S&P 500 Index,
(4) unemployment pulls a 180 and dwindles to normal levels within a year,
(5) gold and commodities (especially oil) begin to tumble,
(6) the Fed declares that it really does support a strong dollar and actually does something consistent with that view.

I'm sure there are others, but that's a start.

Don

Any one reducing stock exposure?

edwinc — Mon, 14 Sep 2009 19:25:45 GMT

This market is making me nervous. I think we may see a correction sooner than later. Have been holding my position still so far, except for a few financials. I am thinking of reducing some of my stocks, which are up 50% since my purchase the last few months? What do you all think?

U.S. FORECLOSURE ACTIVITY INCREASES 5 PERCENT IN Q3

Santa Cruz — Thu, 15 Oct 2009 20:53:23 GMT

U.S. FORECLOSURE ACTIVITY INCREASES 5 PERCENT IN Q3
By RealtyTrac Staff

U.S. Foreclosure Activity Sets New Quarterly Record, Up 23 Percent From Q3 2008

IRVINE, Calif. – Oct. 15, 2009 — RealtyTrac® (realtytrac.com), the leading online marketplace for foreclosure properties, today released its U.S. Foreclosure Market Report™ for Q3 2009, which shows that foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 937,840 properties in the third quarter, a 5 percent increase from the previous quarter and an increase of nearly 23 percent from Q3 2008. One in every 136 U.S. housing units received a foreclosure filing during the quarter — the highest quarterly foreclosure rate since RealtyTrac began issuing its report in the first quarter of 2005.

Foreclosure filings were reported on 343,638 properties in September, a 4 percent decrease from the previous month but a 29 percent increase from September 2008. Despite the monthly decrease, September’s total was still the third highest monthly total since the RealtyTrac report began in January 2005, behind only July and August of this year.

“Bank repossessions, or REOs, jumped 21 percent from the second quarter to the third quarter, corresponding to jumps in defaults and scheduled auctions in the previous two quarters,” said James J. Saccacio, chief executive officer of RealtyTrac. “REO activity increased from the previous quarter in all but two states and the District of Columbia, indicating that lenders may be starting to work through some of the pent-up foreclosure inventory caused by legislative delays, loan modification efforts and high volumes of distressed properties.”

Nevada, Arizona, California post top state foreclosure rates in third quarter
Nevada continued to document the nation’s highest state foreclosure rate in the third quarter, with one in 23 housing units receiving a foreclosure filing — nearly six times the national average. Foreclosure filings were reported on 47,925 Nevada properties during the quarter, an increase of nearly 10 percent from the previous quarter and an increase of nearly 59 percent from the third quarter of 2008. Nevada REO activity in the third quarter increased 29 percent from the previous quarter and scheduled auctions increased 26 percent from the previous quarter, but defaults decreased 8 percent from the previous quarter.

Arizona posted the nation’s second highest state foreclosure rate in the third quarter, with one in every 53 housing units receiving a foreclosure filing, and California posted the nation’s third highest state foreclosure rate, also with one in every 53 housing units receiving a foreclosure filing during the quarter.

Other states with foreclosure rates ranking among the top 10 in the third quarter were Florida, Idaho, Utah, Georgia, Michigan, Colorado and Illinois.

Six states account for more than 60 percent of nation’s third quarter total
California, Florida, Arizona, Nevada, Illinois and Michigan accounted for 62 percent of the nation’s total foreclosure activity in the third quarter, with 579,541 properties receiving foreclosure filings in the six states combined.

With 250,054 properties receiving foreclosure filings during the quarter, California accounted for nearly 27 percent of the nation’s total. The state’s foreclosure activity decreased nearly 2 percent from the previous quarter thanks to a 10 percent drop in default notices, but scheduled auctions increased 4 percent from the previous quarter and REOs increased 12 percent from the previous quarter.

Florida foreclosure activity decreased less than 1 percent from the previous quarter, but the state still posted the second highest foreclosure activity total for the third quarter. Foreclosure filings were reported on 156,924 Florida properties, a 23 percent increase from Q3 2008. Default notices in Florida decreased 6 percent from the previous quarter while scheduled auctions increased 5 percent from the previous quarter and REOs increased 16 percent from the previous quarter.

WE the People

rascfw — Fri, 16 Oct 2009 00:29:06 GMT

LET FREEDOM RING

This is not the Politics forum, so I cordially invite you ALL to go to my one and only post there. It is important and about our basic rights as WE the People...

http://socialize.morningstar.com/NewSocialize/forums/p/246495/2717740.aspx#2717740

Regards,
Susan

FYI.... Your Mind & Your Money

rascfw — Thu, 15 Oct 2009 01:33:22 GMT

I was moseying thru my November 2009 issue of Kiplinger's Personal Finance and found what sounds like a golden nugget....

On Monday, Oct 19th, the first show of a year-long special series called Your Mind & Your Money will premier on PBS's Nightly Business Report. The series is a joint effort offered by PBS and Kiplinger's and funded by the FINRA Investor Education Foundation. The subject? Exploring the "psychological glitches that trip up investors." Throughout the next year, Kiplinger's will have articles complementing the series both in their magazine, Kiplinger's Personal Finance, and on their website, www.kiplinger.com.

For those who are interested, here's a few links to the Nightly Business Report website...

home and search options
www.pbs.org/nbr and www.pbs.org/search

article reviewing the debut of Your Mind & Your Money
www.pbs.org/nbr/site/onair/upcoming/series

pdf for Nightly Business Report's October viewer's guide
www.pbs.org/nbr/site/onair/upcoming/calendar.pdf

BEST of all, here's a link direct to NBR's "Your Mind" data, blogs, videos, etc. If you miss anything, you can read or watch it here....
www.pbs.org/nbr/site/features/special/subdir/mind_and_money_lessons

This series sounds major cool to me!

Regards,
Susan

HO contest, Oct 12-16 trades

rascfw — Thu, 15 Oct 2009 00:55:14 GMT

(I know, I know... I'm late)

Contestants, please report this week's trades here.

Regards,
Susan

is this chart right?

Santa Cruz — Tue, 13 Oct 2009 03:42:11 GMT