Toying with Resistance

This week Jerry discusses the markets anticipation to the debt ceiling dilemma. The stock market is near its recent highs and currently stands at resistance. If Congress gets this issue resolved before August 2nd markets could stage a pretty big rally in the second half of the year. However if a compromise on the debt ceiling is not achieved in a timely manner – we may have seen the highs for a while as we would be entering a new paradigm. Get your fill by tuning into “Money Talks with Jerry Slusiewicz” today.

Click on this link to listen to this week's market comments: http://yourmoneytalks.podbean.com/2011/07/22/toying-with-resistance/

All Eyes on Washington

This week Jerry examines the relationship of stocks, bonds, and Precious metals to the Debt Ceiling crisis and possible outcomes. While we are all hopeful for a positive resolution, but this is not a time to take undue risks with your money. Tune in to Money Talks for more information and get your free portfolio review today.

Click on this link to listen to this week's market comments: http://yourmoneytalks.podbean.com/2011/07/15/all-eyes-on-washington/

No Pause

This week markets continued on a follow through from last week’s big rally. Friday’s jobs numbers would have knocked the strongest of markets for a large setback, but while markets were down Friday – they really barely flinched. Get Jerry’s historical market comparisons and his view on the “debt ceiling” issue by listening to Money Talks today.

Click on this link to listen to this week's market comments: http://yourmoneytalks.podbean.com/2011/07/08/no-pause/

The Bulls are Back

This week markets charged ahead after the resolution of the Greek bankruptcy issue. The US must fall in line fairly quickly to raise the debt ceiling - it is just a matter of which party will dictate the terms. Stocks were up all five days recovering most of the losses that happened in the second quarter. There is a rotation of sector leadership taking place. Find out more on Money Talks!

Click on this link to listen to this week's market comments: http://yourmoneytalks.podbean.com/2011/07/01/the-bulls-are-back/

Reasons for Lower Oil Prices

Americans are about to let out a big cheer because pretty soon gas at the pump should be a lot cheaper. Oil as measured by the S&P GSCI Crude Oil Index is down over 7% today! Since its peak on May 2^nd it is 21% lower. Now who says that there wasn’t a risk premium attributable to Osama bin Laden? (I believe it was just a coincidence that oil peaked the same day the Navy Seals took him out).

The amazing thing is that Americans are just satisfied that gasoline prices at the pump are heading lower. No one seems to be questioning the rate of decline. We should be outraged! Since the National average for regular gas hit close to $4 per gallon in early May, it should be around $3.16 today. However it is significantly higher than that.

Don’t give me this mega oil industry jargon about lag time for prices, crack spreads, and summer blending issues, because when the price of oil was rising the gas stations were raising their prices daily just to keep up. The rate of change should follow price in both directions.

So why are prices declining? Aren’t there multiple protests and even war zones in several of the oil producing countries? Apparently that does not outweigh the slowing rate of growth for the global economy.

Domestically all of the economic reports for the last few months point to a slowdown or in some cases a return to negative growth. Clearly the US housing market has slipped into double dip territory with prices lower today than at any point in the recovery.

The fears of inflation due to rising food and energy prices may soon get knocked off by a rising fear of deflation. Governments are continuing their attempt to stave off defaults around the globe due to lack of economic growth. Food prices may remain high as production factors, weather, and a growing global population put a crimp into supplies.

Fear is starting to grip investors and for good cause. Institutions are in sell mode. This is very evident when looking at the trading volume on down days versus the market’s rally day volumes.

Apparently investors like bailouts and other socialistic government interventionist programs that attempt to prop up markets. Collectively investors are hoping for a Greek bailout package to be put together this weekend so we can “kick the can down the road” once again.

Higher taxes and stringent austerity programs are not going to create growth for Greece. All a bailout is doing is delaying the inevitable. However as long as a Greek default is not today’s problem, it seems investors will be satisfied even though it is clear they don’t have enough money to meet their current obligations. Apparently that is just a minor detail.

Oil prices are falling – fast. Aggressive investors can capitalize by buying into the ProShares UltraShort Crude Oil ETF (SCO). SCO broke above its recent base today when it cleared $49.49. The price target for SCO applying some technical analysis techniques is $63 to a $66 per share.

Fundamentally, if the problems in the oil producing regions do not spread any further oil prices could decline. In addition should our economy continue to slog along with slow or no growth, this trade to make sense for today’s investors.

SCO is a two time leveraged inverse fund, so it is not for the faint of heart. It will move at a rate that is twice as fast in the opposite direction of oil prices as measured by the Dow Jones- UBS Crude Oil Sub-Index. Over time leveraged funds do not track an exact inverse rate – but it will move!

SCO was at $51at the time of publication. Use $44.50 as an exit point should oil prices begin to rise again and the economy begin to accelerate.

Reasons to Cheer

This week markets closed almost flat on the week depending on which index you review. Prospects for a Greek bailout package getting approved and fast falling oil prices should give investors a reason to cheer next week. Find out more by tuning into Money Talks today!

Click on this link to listen to this week's market comments: http://yourmoneytalks.podbean.com/2011/06/17/reasons-to-cheer/

Bullish or Bearish?

The major market indices are all down around three percent for the month of May which coincides with the amount they are off from their recent recovery highs. As a percentage that really is not a lot to be concerned about.

However a review of the most recent economic data, the picture gets a little fuzzy. A few weeks back was the ISM Services report plunged from 57.3 to 52.8. Anything over 50 demonstrates growth, but the consensus was for an improvement to 57.8 and this obviously indicates we are heading in the opposite direction. It is important to note that 80% of our economy is dependent on the services sector.

On the manufacturing side of the ledger the situation actually looks even worse. The Empire State Manufacturing Index, the Philadelphia Fed Manufacturing, and Durable Goods Orders all came in the last couple weeks at their lowest levels in many months. It clearly indicates that the rate of the economic recovery is shrinking and unless something changes, could fall into negative territory.

The Conference Board’s Index of Leading Economic Indicators reported its first negative reading in nine months falling to a negative 0.3% for April. The much anticipated upward revision for first quarter GDP fizzled as it stayed at an unimpressive 1.8% this week. That is down from the 3.1% GDP growth reported for the fourth quarter of last year.

Meanwhile housing remains at depressed levels as prices continue to fall and sales of both new and existing homes are down in the double digit levels from a year ago. This occurred while the economy was actually getting stronger.

Emerging market and the so called BRIC countries (Brazil, Russia, India, and China) are all down more than our markets which is causing some concerns among investors as many thought that the BRIC’s would lead the global recovery this year. With commodities off as much as they are many of these resource rich nations have fallen hard.

Still encouraging the bulls is the fact that the Fed’s Quantitative Easing Program still has a month to go. It doesn’t hurt stocks that the Fed kicked in an extra $31 Billion in the last five days to the Primary Broker Dealers to do with as they please. Rumors that another round of Quantitative Easing may occur also helped juice the markets in the last couple of days. At the very least the bad economic reports lately are pacifying all concerns about an interest rate hike coming anytime soon.

Markets had also reached oversold levels this week and were due for a bounce. How big that bounce turns out to be remains the big question. On a technical level markets paint two opposing pictures. On one hand a breakdown of the uptrend from the March 16^th low has occurred – which is negative.

However another obvious pattern in the charts is that of a flag formation. Flags generally fly at half mast. This means that there is likely a case for the markets to break out of the downward flag slope and most likely rise to even higher highs for the year.

It must be noted that the Dow has been down the last six years in a row in the month of June. However, there is a high propensity for markets to rise going into three day Holiday weekends. Plus the end of the month may give the bulls some strength. So is the current market bullish or bearish? Time will tell.