Friday, June 3, 2011

WHERE’S THE DEADCAT BOUNCE?

We left the month of May on a high note and, only one day later, stumbled into the month of June with the major indexes plunging to their lowest levels since last summer. The weak ADP report was the main culprit and forced economists to hastily revise their payroll growth estimates.

Other economic reports lacked positives and combined forces by leaving the market in the dust, as I posted on Tuesday. Usually, a sharp sell-off is followed by a bounce, but that did not happen, very likely in anticipation of Friday’s uncertain jobs report.

While the markets held fairly steady on Thursday, a rebound never materialized. Today’s jobs numbers showed that the economy has hit “a brick wall,” as one analyst put it. In light of the fact that only 54,000 new jobs were created, and the unemployment rate inched up to 9.1%, it was no surprise to see the major indexes head straight down at the opening.

Rally attempts were rebuffed in the end, and the S&P 500 closed down 2.5% in his holiday shortened week. Technically speaking, some damage was done as the S&P broke through its 50-day moving average and a key support level at 1,310. For the time being, at least the psychologically important 1,300 level held – but barely.

Opinions abound as to how much of an economic slowdown we can expect and if further weakness is in the cards. No one knows of course, but the markets certainly will adjust to a life with less growth. That means any further disappointments with upcoming economic reports are likely to be reflected in softer stock prices or, depending on the severity, a total trend reversal. Any more stress from the European debt crisis will very likely accelerate this process.

While our Trend Tracking Indexes (TTIs) remain in bullish territory, they have moved closer to their long-term trend lines as today’s numbers show:

Domestic TTTI: +3.46% (last week +4.47%)

International TTI: +1.67% (last week +2.38%)

None of next week’s economic reports due out will have the same impact as today’s jobs report. The markets should be able to find some footing, as long as outside events, such as the European debt soap opera, are not exerting too much undue influence on the domestic scene.

Again, this is the time to watch your trailing sell stops and execute them, if you do your own investing. Don’t take any chances by hoping that a major trend reversal can’t happen. It most certainly can; history has shown us that it pays to be prepared.

Ulli…

————————————————————-

Back issues of the Fund Tracker are available on the web at:

http://www.successful-investment.com/newsletter-archive.php

Do you have a question regarding your mutual fund investments?

I will always give you my unbiased and honest opinion. How can you be sure?

First, this is a free newsletter and it will not affect my renewal rates.

Second, I am not running for office and do not have to hide my thoughts in evasive language designed to obscure what I really mean.

So, feel free to send your questions to: ulli@successful-investment.com

All Reader Q & A’s for this Buy Cycle are now listed at our web site! Check it out at:

http://www.successful-investment.com/q&a.php

WOULD YOU LIKE TO HAVE YOUR INVESTMENTS PROFESSIONALLY MANAGED?

Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly or get more details at:

http://www.successful-investment.com/money_management.htm

We are located at:

18685 A-Main Street, #606

Huntington Beach, CA 92648

Until next week.

Ulli…

Return to Newsletter Archive

=============================

Ulli G. Niemann

Registered Investment Advisor

714.841.5804

http://www.successful-investment.com

=============================

Friday, May 27, 2011

AGAINST THE WIND

It was a repeat performance of the prior week, as the markets started out to the downside on Monday and spent the last four trading days trying to climb back. In the case of the S&P 500, it was aimless meandering within a narrow trading range as the index ended up giving back 2 points.

The entire month, the major indexes have been tiptoeing on a balance beam, and it appeared that at anytime the downside could come into play big time. It did not happen yet, but even Dr. Doom, Nouriel Roubini, chimed in with a similar tune in “Stocks teetering on ‘tipping point’ of correction.”

However, for May it looks as though the market will have its first down month since November. Economically speaking, there were no reports with any star power effect that could have moved the indexes; it was simply mediocre news, not enough to make a difference one way or the other.

Today’s figures reflected that going nowhere attitude as the dollar was lower, pending home sales dove, but consumer sentiment rose. Maybe the European debt crises has traders on edge as concerns about a Greek default remain headline news, while Ireland, Spain, Portugal and Belgium are on deck waiting for their turn in the dubious spotlight.

The small movement of our Trend Tracking Indexes (TTIs) reflected market sentiment, and we remain fairly close to last week’s numbers as far as distance to the long-term trend lines is concerned:

Domestic TTTI: +4.47% (last week +4.41%)
International TTI: +2.38% (last week +2.59%)

The markets will be closed on Monday for Memorial Day weekend after which will be facing a good sized menu of economic reports, including Consumer Confidence, Construction spending, Auto sales, Initial claims and Productivity, just to name a few.

The highlight will be Friday’s unemployment report, which may shed some light as to whether economic conditions are worsening or holding steady.

Have a pleasant Memorial Day weekend.

Ulli…

————————————————————-

Back issues of the Fund Tracker are available on the web at:

http://www.successful-investment.com/newsletter-archive.php

Do you have a question regarding your mutual fund investments?

I will always give you my unbiased and honest opinion. How can you be sure?

First, this is a free newsletter and it will not affect my renewal rates.

Second, I am not running for office and do not have to hide my thoughts in evasive language designed to obscure what I really mean.

So, feel free to send your questions to: ulli@successful-investment.com

All Reader Q & A’s for this Buy Cycle are now listed at our web site! Check it out at:

http://www.successful-investment.com/q&a.php

WOULD YOU LIKE TO HAVE YOUR INVESTMENTS PROFESSIONALLY MANAGED?

Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly or get more details at:

http://www.successful-investment.com/money_management.htm

We are located at:

18685 A-Main Street, #606
Huntington Beach, CA 92648

Until next week.

Ulli…

Return to Newsletter Archive

=============================
Ulli G. Niemann
Registered Investment Advisor
714.841.5804
http://www.successful-investment.com
=============================

Friday, May 20, 2011

A BULL IN THE HEADLIGHTS

This past week’s market activity resembled the same theme as we’ve seen lately. An early sell-off followed by a recovery attempt, and then a close within a few points of the unchanged line.

While it was a volatile ride again, the bulls appeared to be frozen and can’t seem to find their bearings thereby yielding the trading floor to the bearish crowd. However, neither bulls nor bears have been making any serious headway, which means we’re stuck in no man’s land.

While first quarter earnings were strong, recent economic data were not exactly a chest pounding event keeping the markets in neutral.

Taking center stage was the European debt crisis, which seems to be on the cusp of a major event taking place. First, new words like “re-profiling” and “soft restructuring” were introduced this week intended to put some lip stick on that pig. Of course, everybody knows that over-indebted countries such as Greece, Ireland and Portugal can’t and won’t pay back the burden the ECB has put on them.

It’s just a matter of time, before the first default takes place. Second, Fitch’s downgrade of Greek debt today pushed the Euro lower against the dollar, while gold rallied sharply with the gold ETF (GLD) adding +1.26% today. Again, gold functions not as much as a hedge against inflation but against uncertainty, of which we are seeing plenty with the euro zone debt crisis. Today’s move in gold makes me wonder what that precious metal will do in terms of rallying once an actual default occurs and how much of that bullishness will affect the dollar. The problems

are not just with the countries mentioned above. As I am writing this, I am watching a live feed from Spain with huge demonstrations, which already have spilled over into Italy.

In regards to our Trend Tracking Indexes (TTIs), the picture remains murky and divided as the domestic TTI stayed about even, while its international counterpart lost. Here are the week ending numbers as they relate to the respective long-term trend lines:

Domestic TTTI: +4.41% (last week +4.58%)
International TTI: +2.59% (last week +3.31%)

Next week, we’ll be facing economic reports about New Home Sales, Durable Orders, GDP and Personal Income, just to name a few. Throw in more unexpected news from the euro zone, and you have a recipe where anything goes.

In case there are any effects on our sell stops, I will update those via a blog post. Be sure to tune in regularly.

Have a great week.

Ulli…

————————————————————-

Back issues of the Fund Tracker are available on the web at:

http://www.successful-investment.com/newsletter-archive.php

Do you have a question regarding your mutual fund investments?

I will always give you my unbiased and honest opinion. How can you be sure?

First, this is a free newsletter and it will not affect my renewal rates.

Second, I am not running for office and do not have to hide my thoughts in evasive language designed to obscure what I really mean.

So, feel free to send your questions to: ulli@successful-investment.com

All Reader Q & A’s for this Buy Cycle are now listed at our web site! Check it out at:

http://www.successful-investment.com/q&a.php

WOULD YOU LIKE TO HAVE YOUR INVESTMENTS PROFESSIONALLY MANAGED?

Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly or get more details at:

http://www.successful-investment.com/money_management.htm

We are located at:

18685 A-Main Street, #606
Huntington Beach, CA 92648

Until next week.

Ulli…

Return to Newsletter Archive

=============================
Ulli G. Niemann
Registered Investment Advisor
714.841.5804
http://www.successful-investment.com
=============================

Friday, May 13, 2011

BEARISH FOOTPRINTS

Mixed economic data throughout the week kept the markets bouncing around in a trading range with no clear direction. Compared to last Friday’s close, the S&P 500 ended down 2 points.

Expectations for an expanding economy remain widespread, but a continued slowdown has become a distinct possibility, which would limit any upside growth and certainly will impact equity prices. As to when and how much remains the big unknown.

Consumer prices rose 0.4% in April, which was in line with expectations after an increase of 0.5% in March. Excluding the volatile food and energy components, the core rate gained 0.2% and 0.1% respectively.

While the consumer sentiment unexpectedly rose to 71.4 in May, from 69.8 in April, higher food and energy costs seem to put a limit on discretionary spending. Absent any improvement in prices, this too will eventually affect the direction of equities.

Looking across the Atlantic, the Eurozone GDP grew by a better than expected 0.8% in the 1st quarter of 2011. However, concerns about Greece’s unsustainable debt level occupied front page news.

More meetings are scheduled to discuss additional options for Greece. To my way of thinking, it’s now just a matter of time that the heretofore avoided term “restructuring” (translation: partial forgiveness of debt) will have to become part of the vocabulary.

Our Trend Tracking Indexes (TTIs) meandered as well, but more weakness has become apparent in the international arena as the positions relative to the long-term trend lines show:

Domestic TTTI: +4.58% (last week +4.76%)
International TTI: +3.31% (last week +4.72%)

Next week, we’ll be facing an economic calendar that includes Housing Starts, Building Permits, Industrial Production, Initial Claims, Existing Homes Sales and Leading Indicators among others. Any positives might help the major indexes break out of the current sideways pattern.

Despite this week’s bounciness in the market, no trailing sell stops were triggered. Looking at the various holdings, my guess would be that the next one on the chopping block will be energy (VDE), which will definitely head further south should any economic reports showing a slowdown materialize.

I will update any sell stop issues concerning our holdings via a blog post. Stay tuned.

Have a great week.

Ulli…

————————————————————-

Back issues of the Fund Tracker are available on the web at:

http://www.successful-investment.com/newsletter-archive.php

Do you have a question regarding your mutual fund investments?

I will always give you my unbiased and honest opinion. How can you be sure?

First, this is a free newsletter and it will not affect my renewal rates.

Second, I am not running for office and do not have to hide my thoughts in evasive language designed to obscure what I really mean.

So, feel free to send your questions to: ulli@successful-investment.com

All Reader Q & A’s for this Buy Cycle are now listed at our web site! Check it out at:

http://www.successful-investment.com/q&a.php

WOULD YOU LIKE TO HAVE YOUR INVESTMENTS PROFESSIONALLY MANAGED?

Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly or get more details at:

http://www.successful-investment.com/money_management.htm

We are located at:

18685 A-Main Street, #606
Huntington Beach, CA 92648

Until next week.

Ulli…

Return to Newsletter Archive

=============================
Ulli G. Niemann
Registered Investment Advisor
714.841.5804
http://www.successful-investment.com
=============================

Friday, May 6, 2011

WHACKING THE BULLS

After last week’s strong rally, it was time for the bears to show some muscle and pull the major indexes back into reality territory. After 4 days of selling, euphoria about today’s better than expected jobs report pulled the market out of the doldrums via a sharp opening upside spike.

I am not sure if this was a partial dead cat bounce, but sentiment changed in a hurry on news reports that Greece may abandon the European Union and create its own currency. That took the starch out of the upward momentum and, while we ended up closing in plus territory, we came way off the highs for the day.

Yesterday’s selling pushed one our holdings, the commodities index (DBC), below its trailing sell stop by a slight margin. As is my custom, I watched the market open this morning with DBC making a nice rebound. Upward momentum faded as the session progressed, and I ended up liquidating this position before it headed further south again. None of our other holdings were affected by this past week’s market slide.

Employment growth provided the initial boost with payrolls growing by 244,000, which was far better than the consensus range of 185,000 to 200,000. However, the unemployment rate inched up from 8.9% to 9%.

Gold rebounded today, but crude oil and silver continued to slide with oil having lost 14.7% this week, while silver gave back 27.4%. Interest rates rose along with the dollar index.

Our Trend Tracking Indexes (TTIs) pulled back a little from last Friday’s close but remain in bullish territory by the following percentages:

Domestic TTTI: +4.76% (last week +5.98%)

International TTI: +4.72% (last week +7.10%)

While the better than expected unemployment report took center stage, worries persisted about Thursday’s disappointing jobless claims report, which may affect the jobs picture in May or June.

As a result, and absent any major negative events, we may see the market trade in sideways pattern until a better picture about the true economic strength, or lack thereof, emerges.

Have a great week.

Ulli…

————————————————————-

Back issues of the Fund Tracker are available on the web at:

http://www.successful-investment.com/newsletter-archive.php

Do you have a question regarding your mutual fund investments?

I will always give you my unbiased and honest opinion. How can you be sure?

First, this is a free newsletter and it will not affect my renewal rates.

Second, I am not running for office and do not have to hide my thoughts in evasive language designed to obscure what I really mean.

So, feel free to send your questions to: ulli@successful-investment.com

All Reader Q & A’s for this Buy Cycle are now listed at our web site! Check it out at:

http://www.successful-investment.com/q&a.php

WOULD YOU LIKE TO HAVE YOUR INVESTMENTS PROFESSIONALLY MANAGED?

Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly or get more details at:

http://www.successful-investment.com/money_management.htm

We are located at:

18685 A-Main Street, #606

Huntington Beach, CA 92648

Until next week.

Ulli…

=============================

Ulli G. Niemann

Registered Investment Advisor

714.841.5804

http://www.successful-investment.com

=============================