What Has Happen to America's Moral Compass?

Malaysia is one of eleven countries involved in the Trans Pacific Partnership (TPP). So, what is the problem? The TPP (fast-track authority) recently passed by Congress stipulates that the United States can not make trade agreements with countries that violate human rights, which means countries with Tier-3 status. And, guess what? Malaysia has a Tier 3 and would not be eligible for the TPP. No problem, because the Obama Administration found a very easy fix. That is, simply change Malaysia's rating to a Tier-2, even though there is little change in its actual performance of human trafficking, slavery, sex slaves, mass graves, and abuse of workers.  Very sad, indeed. That is, when corporate profits become more relevant than human lives. Yes, because TPP is all about ways to lower labor costs to enhance the proverbial bottom-line, profits.

Forget All the Daily Noise. Focus on the Weekly EMAs -- Trend is Still Bullish

Where are the Arrest Warrants?

Who could have seen that coming?  U.S. equities rallied on the basis of an entirely manipulated Chinese stock market rally overnight, which was caused by those arrest warrants for short sellers, hope for a last minute Greek deal, which was dashed by calls for a massive EUR 80billion bailout that Germany will never allow, and, of course, the Iran nuclear deal fiasco. 

Then, as usual, reality rather than hope takes center stage. The outcome so far is that the DJIA has just experienced a 500-point-pump-and-dump as this morning's exuberant TV anchors are suddenly silenced by the new found reality that China, Greece, and Iran do matter. (Zero Hedge)

As of 2 PM (CST), the DOW is up 47 points with one hour of trading to go.

How Does a Government Stop a Stock Market Crash?

According to the Chinese government and the Peoples Bank of China (PBOC), simply threaten to arrest "short sellers."  Interesting to note that as soon as the news broke about those "evil short sellers" the Shanghai Composite Index took off to close up 5.8% higher, which is the largest percentage increase since March 2009.  However, since June until today, the Shanghai Composite Index had been down 32%.

Global markets immediately took the clue and took off.  (Our DJIA futures are up over 1% at 8 AM.)  So, we know that the best friend of Wall Street has been the Federal Reserve System, which has pumped trillions of dollars of liquidity into the global financial system since 2009. Now, we can add another best friend to Wall Street, who are governments now declaring that anyone who shorts a stock is evil and should be immediately arrested. Presto! We now have a permanent bull market that will last into infinity.  Aren't governments wonderful?

Prior today's announcement of arresting anyone for shorting stocks, these are the measures taken by China in trying to halt the stock market decline:

1. Ban on major shareholders, corporate executives, and directors from selling stock for six months
2. Freeze more than half of the listed companies from trading (approximately 1,400)
3. Reduce margin requirements on stocks
4. Block fund redemptions (one could not redeem one's mutual fund shares).

Price Trend vs. Momentum (Buying Pressure) Trend

Innumeracy: An Acute Encephalon Problem

I believe that Americans are unable to use basic mathematics as it pertains to economics and personal finance. But, I find it most disconcerting among those individuals who are reasonably educated. You can not spend more than you make. Period. Oh, but you say I can borrow and/or max out my credit cards. Yes, but all what you are doing is bringing forth current consumption at the expense of future consumption. Soon or later that debt must be paid. Yes, I know a lot of that debt can be caused by medical situations. (That is a separate issue for discussion, which is caused by the medical monopoly in this country.) 

Just take our government for instance. (It doesn't make any difference if we are talking about Democrats or Republicans. The both have this encephalon problem when it comes to innumeracy.) That is, since 2011, total federal debt has increased by 27%, while GDP has increased by 14%.  Federal debt is increasing nearly double what our economy is producing.  Do we, as a nation, have a debt problem?  A rhetorical question, indeed; however, the debt problem has permeated every level of society. Once again, you can not spend more that what you make on into infinity. 

Is Today's $14 on $SLV a "False Flag," or Continuation of Stage 4?

From my post of Wednesday, July 1, I indicated the importance of $14 on $SLV. At that time, $SLV was $14.94. Well, today $SLV is currently at $14.37 (12:52 PM), which is down 4.14% from yesterday's close. To say the least, the "Bearish Triple/Spread Formation" is now a reality. However, saying that, $SLV has been in a major Bear trend (Stage ) since April 2011 with a price of $48. Since that time, $SLV has declined 70%. So, could this break today be a "False Flag?" I know silver bulls are definitely hoping in this break being a "False Flag," not a continuation of Stage 4. Saying that, I am definitely tempted to purchase some "junk silver" at these price levels. Stay tuned.

Greece Closes Access to All Safety Deposit Boxes

If it can happen in Greece, your access to safety deposit boxes here in the United States can also be denied. Yes, it is a real possibility.  If you have a safety deposit box, I would highly recommend that you close it. The Greek closure to safety deposit boxes is the so-called "shot-accross-the bow."  Our government can simply restrict your access, just like in Greece. 

A while back I had a post entitled, "Do You Know the Legal Ramifications of Your Bank Deposits?" In that post, I made the following comments, which is germane in regard to the Greece's "Safety Deposit Boxes:" For nearly 200 years, the courts have sanctioned an interpretation of the term “deposits” to mean not funds that you deliver for safekeeping but a loan to your bank.  Let me repeat that in another way.  Your bank balance, then, is an IOU from the bank to you, even though there is no loan contract and no required interest payment. Thus, legally speaking, you have a claim on your money deposited in a bank, but practically speaking, you have a claim only on the loans that the bank makes with your money.  If a large portion of those loans (securities) is tied up or becomes worthless, your money claim is compromised.  A bank failure simply means that the bank has reneged on its promise to pay you back.  The bottom line is that your money is only as safe as the bank’s loans and securities. If the bank’s portfolio collapses in value, the bank is broke; and its depositors’ savings are gone, or as Greeks are finding out access to one's safety deposit boxes can be simply denied by the government." 

Now, why would the government deny you access to what is yours? Could it be what the government thinks is in those boxes? In other words, beware.

Who is Troika?

First, the definition is as follows: "Any group of three persons, nations, etc., acting equally in unison to exert influence, control, or the like." Second, why did I ask the question on "Who is Troika?" The answer deals with Greece.  Troika is currently made up of the European Central Bank (ECB), the European Commission (EC), and the International Monetary Fund (IMF).  Troika is a commission that is charged with monitoring the Euro debt crisis.  It, also, is responsible for making recommendations on policies to help solve the Euro debt crisis, so they have a tremendous amount of influence and power. 

Therefore, this is the body that is trying to control the outcome of the Greece debacle. However, the Greek people can decide their own fate this coming Sunday, July 5, with a "no vote" to the terms of the bailout deal as promulgated by Troika. 

How Many Jobs Does it Take?

How many new jobs must be created each month to take up the "new" entrants going into the civilian labor force?  The following table provides one with the answer to the question.    As you can determine, we have 2,849,000 more individuals in the civilian, non-institutional, population (sixteen years and above) than in June 2014. A simple division tells us that the quotient is 237,417.  Therefore, just to keep even with the "new" entrants into the labor force, the U.S. needs to create 237,417 "real" jobs each month. You noticed that I said "real" jobs, not the so-called bogus jobs put forth by the Bureau of Labor Statistics through the "birth-death rate" of businesses.

Labor Participation Rate: 36 Year Low

Why is the Labor Force Participation Rate important? It is important because those that are employed pay taxes.  Likewise, those that are not employed do not pay taxes. It really is that simple. So, if you are looking for a good indicator of economic health, look no further than the Labor Force Participation Rate.

Where the Jobs Have Gone!

Since 2007/08, America has lost 1.4 million manufacturing jobs. You know those jobs that pay extremely well. However, American has gained 1.4 million waiters and bartenders. You know those minimum wage jobs. (See the following chart.) But wait, it really gets better. Part-time jobs in June surged by 161,000, while full-time jobs plummeted by 349,000. However, you will never hear these statistics from the main-line media, which is really a very sad commentary on where America currently stands.

$SLV: Point & Figure Chart

For those of you that have been following my blog over time, know that I do favor "Point & Figure Charts" over the typical Bar Charts.  The reason being is that on a "Point & Figure Chart" the various stages are much more easily defined than on "Bar Charts." What do I mean by stages? Stage 1 is the accumulation phase. Stage 2 is the advancing stage. Stage 3 is the distribution phase. Stage 4 is the declining phase. All stocks go through these stages.

In regard to $SLV, one can ascertain that it is either at the end of Stage 4 and, just maybe the start of the accumulation phase (Stage 1). If Stage 4 is not complete, $SLV does have a downside price object (PO) of near $8. As I write this post, $SLV is slightly below $15. Now, I am not saying that $SLV will reach $8. I am only providing you with what the chart is indicating. By the way, the formation that is "circled" is a "Bearish Triple/Spread Formation," which is very bearish. However, my experience with this type of formation late in Stage 4 is that it might be a "false flag signal." That is why I will be tracking $SLV very closely.

Silver (SLV): Merits of the 15/40-wk Exponential Moving Average in One Chart

Note: Double-click on the chart to enlarge it.

Global Debt Levels (All Time High) = Sovereign Debt Debacle for 2015

Greece, Italy, Puerto Rico, Spain, and Ukraine are the evidence (proverbial tip of the iceberg) of the much larger "sovereign debt crisis."  Greece will undoubtedly default today on its loan to the IMF today.  Puerto Rico (U.S. Territory) and Ukraine are threatening to default on its debt payments. Likewise, if Greece defaults, I believe Italy and Spain are next in line to follow. The world is heading into a global financial debt debacle that will be far worse than 2007/08 sub-prime mortgage crisis. In other words, lessons of the past have not been learned; and the world will repeat them. 

All global debt levels are out of this world. Simply look at the U.S. with its $18+ trillion national debt, or the $1 trillion student loan debt, which approximately 90% is guaranteed by the U.S. government.  And, what about the size of financial derivatives (credit default swaps -- debt)? According the Bank of International Settlements, these derivatives amount to over $700 trillion. I don't know about you, but I can not comprehend in my finite mind that size. 

Along with the sovereign debt problem, global equity markets are grossly overvalued, which primed for a huge correction. But, before a major equity crash of over 50%, I believe the sovereign debt crisis will take "center stage."

$INDU's Daily 200-day EMA -- Taken Out!

The weekly 15/40-wk EMA remains in a bullish trend. One reminder of the weekly EMA data is that since it is weekly the calculation is done on the close of the market on Friday. This procedure eliminates all the noise that occurs on a daily basis. Therefore, the EMA signals that I use to generate buys and sells on based on Friday's numbers. Saying that, I do use daily readings (See the following chart.) to get a feel for the short-term market moves. As you can see from the following chart, the support at 17,650 was taken out today.  Can anyone say, Grexit? Where do we go from here? For the near term, 17,000, which is the February low, seems like a good possibility. However, my main technical tool for making investment decisions is the "15/40-wk EMA." That is, when the 15-wk EMA > 40-wk EMA, the primary trend is up (bullish), which is still the status as of today. When the 15-wk EMA < 40-wk EMA, the primary trend is down (bearish). Of course I will update the weekly EMA chart of the $INDU after the market closes on Friday.

If you can not make out the information on the chart, simply double click the chart to enlarge it. 

$INDU: Daily Critical Support Levels

Exponential Moving Average Strategy: Revisited

U.S. markets open in approximately ten hours.  What influence will the Greek debacle have on our market? EURUSD opened $1.09. Not good for the euro but good for the dollar. Global investors are very nervous that the Greek problem will lead to a contagion for other European countries, especially Spain.  What about our stock market, S&P 500? Well, for those of you that have been following my blog for quite some time, you know all about my "Exponential Moving Average Strategy." 

This investment strategy states that when the S&P's 15-wk EMA > 40-wk EMA, the trend is bullish. Likewise, when the S&P's 15-wk EMA < 40-wk EMA, the trend is bearish. The following chart illustrates how useful this strategy has been since 1996. Currently, the market remains in a bullish trend, which has been the trend since the late 2011. So, what if the Greek contagion spreads to U.S. markets? Simply focus on the EMA strategy and let it be your investment guide going forward.

Oh, How True!

$SLV: Critical Price Junction!

Higher Interest Rates Ahead?

Loan-to-Value Ratios are Higher Today Than During the Sub-prime Mortgage Debacle of 2007/09

Fannie Mae and Freddie Mac are the primary purchaser of single-family mortgages since the housing bubble debacle back in 2008/09. The FHA, on the other hand, is an insurer, not a loan purchaser. What this means is that today's mortgage risk, based on LTV and FICO, is higher than during the previous mortgage debacle. Lessons of the past have not been learned. Once again, this is not going to end well! But, then again, no one seems to be that concerned.

Wall Street is Great, Main Street (Employment) is Bleak

The following chart from Charles Smith needs no further comments or explanations:

Coefficient Correlation Between S&P 500 and Apple (AAPL)

I guess if we want to determine the future course for the market, as measured by the S&P 500, we better start tracking AAPL, which I will on future posts.

$INDU Moving Higher From Oversold "Full Stochastics" Levels Mentioned Yesterday

$INDU Update: Daily Basis Chart

Health Insurance Cancelled? No Problem!

A Real Eye Opener (Shocker) From the Latest BLS Report on Job Additions

The BLS is defines a "foreign-born worker" as follows:  Persons who reside in the United States but who were born outside the country or one of its outlying areas to parents who are not U.S. citizens. The foreign born include legally admitted immigrants, refugees, temporary residents, such as students and temporary workers, and undocumented immigrants. The survey data, however, do not separately identify the number of persons in these categories. 

Now the analysis is as follows: The recovery from the subprime debacle, as I commonly refer to the last recession, has almost entirely benefited "foreign-born workers" at the expense of "native-born Americans." The number of foreign-born workers added, according to the BLS, was 2,288,000 and the number of native-born workers added was 727,000, or, as the chart states, 3 TIMES MORE FOREIGN-BORN WORKERS THAN NATIVE-BORN WORKERS.

Please be mindful that I am not trying to side with either camp on the illegal immigration debate. I am simply trying to present the facts as reported by the Bureau of Labor and Statistics (BLS), which I was not aware that the BLS gathers such statistics. Saying that, I was simply shocked by the magnitude of the jobs added by foreign-born workers vs. native-born workers. 

Where's My Raise?

If you are a production worker, your wage raise is virtually non-existent for 83% of the working population.  And, since 2007, that raise, if you were one fortunate enough to receive one, is significantly below the raises between 2008/08 (4%). This is occurring in an environment where the so-called unemployment rate stands at 5.5%. (I don't believe anyone really believes percent being put forth by the Bureau of Lies and Scams.) 

The Wall Street Journal reports that the median household income, adjusted for inflation, was $51,939 in 2013. In 1988, that adjusted median income was $51,514.  Therefore, over the past 25 years, there has literally been no increase in one's median income.  Wow!  In spite of all the spin coming from the BLS and FED that the economy is on sound footings and improving on a daily basis, the working population (Main Street) suffers dearly.  

Reincarnation of the Home Equity Loan

Does anyone remember the "home equity" craze leading up to the subprime debacle of 2007/08? I guess not! Now, the banks are promoting the equity in your car as a source of funds that one can borrow against. 

Just look at that charming couple in the above picture. Why are they smiling? Well, after using up their home equity loan and taking out a reverse mortgage, they found a new source of spending in their cars. Wow! We continue to learn nothing from history. This "cash out auto loan" is not going to end well, at all!