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!