Rough Week on Wall Street

This week investor fear rose as they watched our political leaders of the richest country in the history of the world debate the issue of borrowing another couple trillion dollars to meet our debt obligations. Why is this happening? It’s because as a country we haven’t figured out how to live within our means. Investors shouldn’t follow their lead but to learn what to do tune into Next Week on Wall Street.

Click on this link to listen to this week's market comments: http://yourmoneytalks.podbean.com/2011/07/29/rough-week-on-wall-street/

Toying with Resistance

Markets want to go higher but unfortunately some headwinds are still causing hesitation. Investors are still waiting on Congressional leaders to resolve the debt ceiling issue. Will they get it done before the US falls into a technical default and has its AAA credit rating tarnished or will they prove inept.

Fed Chair Ben Bernanke is pumping an enormous amount of liquidity into the money supply system. Since the Quantitative Easing Program ended at the end of June, Bernanke has come up with more creative methods of putting money into our economy. He is doing his part to keep the bubble from bursting.

Treasury Secretary Tim Geithner is rumored to want to retire soon. He is furiously making the rounds attempting to push Congress to act urgently before we run short on money in 11 days. This is his one and done moment. He only needs Congress to cooperate.

The markets are not panicked. Stocks are flirting with recovery highs and the bond market is stable. Treasuries are not acting like interest rates are about to go up sharply.

Technically, stocks are at resistance and are poised to break higher should the House, Senate, and the President all agree on a comprise in time. Corporate earnings and even some of the recent economic releases have been quite positive. The trouble is other issues have been dominating center stage.

Europe may finally move out of the forefront with their Greek solution and the tempering of the problems facing other Euro zone nations. If only our leaders could agree that more immediate debt is a good solution, then we too could push our troubles off to sometime in the future.

Markets would most likely go on a tear for the second half of the year. That would coincide with what typically happens during the third year of a Presidents term. If the S&P 500 clears 1370 from it Friday’s close of 1347 – it would target 1483 or even go all the way back to the 2007 all time high of 1576.

NASDAQ is also poised to take off. It closed at 2862. There is major resistance here to 2887. Should it clear that level, the NASDAQ would target 3175 as its next objective. That would get the NASDAQ all the way back to its December 2000 levels.

Like it or not the government will raise the debt limit. If they get it done sooner the markets are poised to go higher. If they wait until after August 2^nd, and a downgrade of our credit rating, then this will be a resistance point that forces stock prices lower. We will have a much better picture in a week.

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.