Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your 1 p.m. market update for Friday, the 22nd of July.
As we go into this Friday, equities appear to be higher for the week as do gold and silver. That is quite a conundrum!
The lack of any decision out of Washington DC continues to be an embarrassment for most US citizens. It would appear the folks in Washington DC are more interested in keeping their jobs than doing what's right for the country. I get the sense that there's a deep and growing anger across this great land that revolves around DC's failure to come to a debt resolution.
Never have so few ideologues been in control of the lives of so many people. It is pathetic to see, in my humble opinion.
We will want to watch the close in gold today. A close over $1,603 in spot gold would represent a new high close for this market, which would underscore the gravity of the financial system.
Now, let's go to the markets and see how we can protect and grow your money in 2011.
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S&P 500
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 90
The parabolic or PSAR is just above the high so far today, and sits at 1347.00. We need to see this market make new highs before we can abandon what we think may be a significant top. Barring any dramatic news, this index will close higher for the week (last week's close was 1316.14).
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SILVER
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 85
The silver market continues to oscillate and we now have support coming in at $38 an ounce in the short term. A close in the spot market over $40.28 today will be viewed as extremely positive. For the week, silver is trading higher. We are expecting this market to reach its highs towards the latter part of Q3 and early Q4. The intermediate target for silver based on the Fibonacci count of 61.8% is $42.98.
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GOLD
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 100
As of this writing, gold is around the $1,600 level, however a close over $1,603 today would be a new high close for the move. For the week, gold is higher and remains in a bullish configuration with our Trade Triangle technology. There appears to be good support coming in at the $1,580 level. We continue to like this market from the long side. We are looking for gold to move higher until the end of Q3 and possibly into Q4. Intermediate targets for gold are $1,640 and $1,650.
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CRUDE OIL
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 70
We have been talking about an "Energy Field" for some time in crude oil and this could be the kickoff of a fairly substantial move. There is about a five dollar risk in this particular trade. A close over $100 is need in my opinion to start this market on the upside. Our Trade Triangle Technology is positive in the intermediate term.
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DOLLAR INDEX
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 70
At the present time, we still see this market as being in a broad trading range and lacking any real direction. The fact that the dollar is at the lower end of the Donchian trading channel could present a bounce on the upside for the dollar. The Dollar index remains below its 200 day moving average. Resistance remains at 75.50 and support comes in today at 74.00.
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REUTERS/JEFFERIES CRB COMMODITY INDEX
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 55
This index appears to be winding up for breakout on the upside. However, it is not there yet and won't be until we see a move over the 352 level. We still believe that this index is building a powerful energy field that will be capable of propelling it to higher levels later in the year. At the present time, our Trade Triangle technology is mixed. Resistance is between 349 and 350. Support comes in at 342.
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If you haven't watched our earlier 1 PM updates, check them out on this blog.
Just in case you missed this week's MarketClub TV show it is available on the blog right now to watch. It was a fun show with lots of participation from everyone. Thank you so much for all the questions you sent in!
Be part of our next show by calling 410-867-2100 extension 129 and (1) leave us a message, (2) tell us how you use MarketClub, (3) ask a question about the market or (4) comment on anything to do with the markets.
Call today and be automatically entered to win a one-year membership to MarketClub. The winner will be announced on the show.
As always, we rely on our market proven Trade Triangle technology for catching the big moves.
Every success,
Adam Hewison
President of INO.com
Co-founder of MarketClub
Thomas:
If you decide to ride it out, bear in mind that it might take several years, and in the meanwhile the dollar continues to become worthless--during which time, AA might go into receivership. Think PanAM, TWA... also great companies that went bust (which was also inconceivable at the time).
If you decide to sell, I have found that the best time to sell, to be in the 9:30-11:30 time slot (NY time) when the DOW is moving up.
If you go the bullion route--stick to Maple Leafs, Eagles, Buffalos, Philharmonics, Koalas, and smelted Mint bars. Stay away from numismatics, or commemoratives--you should obtain either .999 or .9999 pure 1 oz. gold or silver (preferably both). Check out http://bullion.nwtmint.com/ Northwest Territorial Mint and also Scottsdale Silver http://store.scottsdalesilver.com/page/24/index
Good luck to you.
Debt ceiling does not have to be raised... they just have to stop spending... a 50% haircut would suffice... we're borrowing about 40% of every dollar we spend....
Just ask me I'll tell you what to cut....
The Cuts are what the market is looking for.... 4+ trillion or so to start....
Nobody cares whether the debt ceiling is raised...
They need to cut 15 trillion over the next 10 years as a minimum...
They ought to give everyone a check for the money they have put into medicare and social security and just scrap the programs... Cut every other sort of stupidity including the departments of Energy and education...
whatever inflation this causes let happen.... and rewrite the tax code for a flat tax and/or some flat consumption tax....
Teach The Constitution in school and teach people and government to mind their own business...
Thanks frank
I am not to thrilled flying AA either, but my wife worked for them for years. I try to separate the the investing
from the product. However, have been on other airlines that were pathetic as well.
Will there be a time where there are no airlines because of the cost?
The country will shut down and is about to anyway if our politicians don'g deal with the debt ceiling. We live in
pretty scary times. What will happen if the 50% of people who live on some government assistance do not get their
money?
My house they think will be easy pickings?
My best
Victor
Awesome and articulate response, very thorough, and I appreciate it. However, it is difficult for me to
believe this company is going to fold. The last time I got in with this years ago the same thing happened
and I sold it at $28/share.
I agree with you, and I may acquiesce. Have you ever done this one before: you get out, the the stock goes
up?
Made a lot of money on AMR and JBLU, but you are right on one thing, my emotions got the best of me and when I
should have put in some tight stops I let it run, bold but stupid.
The good thing is I am well past the two year time period when most people get out of investing/trading, and
the ability to keep wanting to learn has not abated.
I have written down your book reference and am going to try to get one today at Borders Book Store, which by the way,
is going out of business here in Fort Worth, home of American Airlines
Thank you for your time.
Thomas
Thomas:
A 50% loss is better than 70, 80 or 90%. If you bought in the 8's that means you probably got in Nov 2010--Jan 2011. Look at the trend going back 5 years, and you can see that they began a downtrend in 2007. Step back take a deep breath and look at the long-term trend; consider the prospects for the industry, look at the fundamentals, forget the technicals for the moment... Listen to the logic, forget the wallet pain, and ask yourself the following:
1. Can I risk losing the remainder of my principal capital?
2. Do I feel confident enough regarding the fundamentals for this company, and its industry, in the following 12 month period?
If you answer YES, stick to your guns and tough it out (but it may take 3-5 years or more, meanwhile the US dollar is continually losing purchasing power). If you answer NO to both questions, then get out NOW.
Getting out, means either at the next rally, or by dollar cost averaging--selling blocks of shares within the next 2 weeks.
Its your decision obviously, but I for one, would liquidate my position in ALL equities as soon as possible. Invest in either GOLD/Silver ETF's or actual precious metals bullion. Gold is projected to hit between $5,000 to 10,000 by 2014-15, and silver will be at $200-400. Although gold stocks may in fact rise substantially, I prefer to stick with bullion or ETF's backed by actual gold and silver. Bear in mind that GLD and SLV are mostly paper backed ETF's, the actual metals they hold are a small percentage of the total shares outstanding, I would stay clear of GLD and SLV. Look at PHYS IAU PSLV SIVR instead. Do the math, I think the precious metals will recoup the capital you have lost and then some.
When the next crash comes, (and it will) you don't want to be amongst the ones holding worthless paper stock certificates or federal reserve notes. Do your own due diligence on precious metals, I recommend that you read: CRASH PROOF, How to Profit from the Coming Economic Collapse, by Peter Schiff (President of Euro-Pacific Capital) although it dates back to 2007, the book has been invaluable to me regarding the times we are facing, by providing sound investment alternatives. Another good book is: Guide to Investing in Gold and Silver, Everything you Need to Know to Profit from Precious Metals Now, by Michael Maloney.
Hope you get over this bump in the road, and learn from it.
Victor: I hate to admit that you are right, but it is difficult to take
a 50% loss at this time when you have a lot of money in it. What do you
mean by getting worse. Are you suggesting AMR is going bankrupt, or that
the share price will never recover< I need in the 8's and I'm even overall,
but have 1000 share blocks at several areas.
Yes, I could pull my money, and I have heard all the wonderful stories about
putting money in gold. The last time I did that is was in an investment called
"Ox Bow Mines" and it turned out to be a scam and I lost everything, thanks to
my broker. No I am my own man, so if I mess up it's on me.
Will certainly consider what you said, and I respect it. Is one reason I asked
the quesion. I needed the tough answers.
regards
Thomas
Frankie: AMR has no divies
Answer - Easy to me
1. price of fuel
2. bad economy
3. My family will not fly AA, they are one of the worst with customers and they needed new planes 10 years ago . Have had two personally grounded for mechanicals and heard of many others, so do you want to fly / invest in a company that pushes the limit for the bottom line ? That will usually catch up with you .
4. Other : unknown to most but some know something to make it the cheapest airliner stock .
SW in America
Virgin in UK
Thomas:
Don't fight the trend, you are trading by emotion and that is a prescription for disaster. I've been there, done that; take my advice, get out before it gets worse. Airline industry overall is in collapse; higher fuel costs, fewer passengers due to the crisis, intense competition, higher infrastructure costs... Cut your loses now; get out of equities and into precious metals.
Also consider that even if equities increase in value, they are valued in US dollars, which are rapidly losing purchasing power... look at the US dollar index over time... its trending down, thanks to the FED, and all that money printing.
Move your money into gold and silver--you will see results, and sleep better. Anyhow, that's my 2 cents, but I know we all have to face our trading demons before we finally see the light. The word out is that the big Wall Street houses are all getting ready for another big downturn and are hedging... so shouldn't you?
Adam When you speak of ideologues if you mean the tax and spend liberals than I strongly agree with you. But if the debt ceiling is raised without equal or greater cuts than the guys will be back in power that got us in the debt we are in now. They could have gotten a budget last october when they had all of the power but gambled and lost. Thankfully! All I can say is no compromise. Granny and our military will still get paid. If the government isn't brought under control we are all in trouble. Our country as we know it will be history.
Hopefully the market won't get any crazier than it already has.
Adam,
How can you honestly expound on the directions of commodities,stocks and the dollar using analytical models.Do you believe what is being said about Greece and the EU? Do you believe our economy is growing and creating meaningful jobs.Do you believe the crap that the print media puts out on a economic recovery coming soon,no double dip recession.Do you believe stocks will trade higher long term on good earnings reports.I doubt you have the macro & micro Geo-political background to really give an honest assessment of the many manifestations behind the many markets you discuss daily.As polemical as this is I would learn from it Adam.I do not look for attention when it comes to risk management.That's what you are really trying to do,is it not? I know your service could be exponentially improved.You are a very smart person,no doubt.Feel free to email.
oh yea almost forgot,I am down 17830.00 on gld august 151 put options.My avg price is 1.23.I have all plans on buying on top of my 520 contracts as gld goes even higher.Around 6-23-11 I owned gld July 147 calls.By July 5th I was down 12360.00.I kept buying into weakness and ended up 60,424 on the position.(real money)You could say that's reckless,unwise and lacking sound financial investment skills;I would agree to a point.Back to my gld august 151 put,I would never ever normally bet against gold with a 151 August put option,and to be honest it's in a virtual account just to prove a point to a client of mine.
TB.........DID THEY JUST GET THROUGH DISTRIBUTING DIVIDENDS ??
Can anyone give me a solid reason why American Airlines (AMR) stock is falling so fast.
The just ordered 400 airplanes, ahead of the game vs any other airline concerning state
of the art, updated, energy efficient aircraft, this has also pretty much dispelled any
chance of Bankruptcy, at least for now.
I realize most of the unions are entangled with them in contract disputes, but this is
getting ridiculous.
Yes, I swing trade this baby but also have tons of money in it. Things were going great
but now I feel helpless.
Thomas