Hello traders everywhere! Adam Hewison here, President of INO.com and Co-creator of MarketClub, with your mid-day market update for Monday, the 14th of October.
It's day 14 of the government shutdown and it's certainly getting down to crunch time where someone is going to have to blink. I think both parties know how angry the populace is with their childish behavior. In my opinion, the National Park Service should be fired for what they did with the open air monuments.
Last week's market didn't close badly with the expectation that we would have a resolution in place this past weekend. That was not to be case and the major indices are lower this morning.
UPDATE: Apple (NASDAQ:AAPL) flashes a major buy signal.
The stock closed last Friday at its highest level in five weeks, based on end-of-week closes. The close last Friday was over the 491.10 level that I mentioned in last week's commentary. Apple moved over its "line in the sand" today at $497 and flashed a major buy signal based on our intermediate term Trade Triangle. Upside targets on Apple remain at $550 to $560 a share.
Netflix (NASDAQ:NFLX) is on a tear this morning, as it has been in talks with cable companies, including Comcast Corp and Suddenlink Communications, to make its streaming video service available through their set-top boxes. I expect Netflix to run into some form of resistance right around the $315 level, which represents a 61.8% retracement from recent highs and lows. Longer-term, I remain positive on this market.
Amazon (NASDAQ:AMZN) faces the same technical resistance around the $315 level. Should this level be taken out, I would expect this market to begin to accelerate its upward momentum. At the moment, all our Trade Triangles remain positive on this stock.
The question remains, are we headed for a financial Armageddon? I don't think so, sooner or later the rubber is going to meet the road and these politicians have to realize that if they don't do something, their political careers could be finished. Holding on to their jobs and their position of power is their number one priority and is a very strong incentive to get a deal done.
My best guess is that there will be an 11th hour solution.
Please feel free to leave a comment, share a thought, or tell us what you think about the markets or Washington politicians.
Have a great trading day,
Adam Hewison
President, INO.com
Co-Creator, MarketClub
Adam appears frequently on the following financial news channels as a guest expert. Click on any cable logo to watch Adam's latest appearance.
"A growing number of the French citizenry had absorbed the ideas of "equality" and "freedom of the individual" as presented by...social theorists of the Enlightenment...After a time, many of the French began to attack the undemocratic nature of their own government, push for freedom of speech...and decry the prerogatives of the nobles."
"Because the nobles successfully defended their privileges, the King of France lacked the means to impose a "just and proportioned" tax."
"Louis XV...began drawing up a long-term plan that would involve constructing a larger navy...[which] resulted in a mountain of debts."
"Louis XV failed to overcome these fiscal problems, mainly because he was incapable of harmonizing the conflicting parties at court..."
So, in 1776 [he] proceeded with a policy of taking out large international loans instead of raising taxes.
http://en.wikipedia.org/wiki/Causes_of_the_French_Revolution
On 11 December, among crowded and silent streets, the deposed King was brought from the Temple to stand before the Convention and hear his indictment, an accusation of high treason and crimes against the State...This decision would be final. On Monday, 21 January 1793, Louis was beheaded by guillotine on the Place de la Révolution.
http://en.wikipedia.org/wiki/Louis_XVI_of_France#The_imprisonment_and_execution_of_Louis.2C_1792.E2.80.931793
Well worth a read, if I may offer my own opinion.
RB in Canada.
RB,
Wow, thanks for your feedback and for the links, very interesting. Thanks for your view point and comment.
Regards,
Adam
Adam Hewison
President, INO.com
Co-Founder of MarketClub.com
It has been to me a kind of surprise, new realization & relief? Here in Nepal we invariably most of the times getting some result after a prolonged political drama at the last minutes & sometime even after the deadline which politicians themselves extend beyond it arguing that as long as it started before the deadline & finished the business without stoppage no matter what length after it is OK. We the people are fatigued by it.
Nitty-gritty of ongoing fiscal/political battle at Washington is tentatively clear to me. I earlier thought it is applicable to developing countries mostly however it is an eye opener that politicians are politicians alike everywhere but perhaps the difference lies in the game played subtly or roughly.
God bless it ends sooner than later & that people interest remains at the end the deciding factor.
Long live the land of immigrants & opportunities!!
Ram,
I think the matter how they mask it politicians are basically after one thing and that is power that they can exert over other people.
I appreciate your insightful comments on our blog.
Thanks for your view point and comment.
All the best,
Adam
Adam Hewison
President, INO.com
Co-Founder of MarketClub.com
Nixon was forced to abdicate the Bretton-Woods accord and leave the gold standard over the viet nam war debt........France was turning in dollars for gold and it would not be very long until it was all gone.....not important?.....then why are the BRICK+other emergers buying gold hand over fist?
nothing has been fixed since Lehman and LTCM..........the big 7 bailed-out banks are bankrupt marked-to-market..........anyone with a pulse can again buy a car [it will not be long before they can get a house subprime---sound familiar?]
but this is the nature of things homo sapien since we pushed out the Neanderthals...........maximize our current position by whatever means necessary.........
it will take 2-3 years but the financial reset coming will not be pretty..........but its just the way it is..........and what must happen.
Boatman,
Thank you for your feedback and comment. Much appreciated and very insightful.
Regards,
Adam
Adam Hewison
President, INO.com
Co-Founder of MarketClub.com
"In my opinion, the National Park Service should be fired for what they did with the open air monuments."
This sounds like it was written by the dirty little coward Randy Neugebauer from Texas who had to find a female park ranger and tell her she should be ashamed for the shutdown that he and his gutless tea baggers had created. The snivelling little weasel would never have had the guts to say that to a man.
Adam Hewison with his comment that the National Park Service should be fired for doing their jobs shows that he is of the same gutless stripe as Randy Neugebauer.
It is a shame that disgusting little twits like this who never did an honest days work in their pathetic lives are allowed to take cheap shots at the hard working men and women of the National Park Service.
DonD,
If you think what the National Park Service did was right, then you are in the minority my friend. However, I respect your right to say what you think even though I do not agree with you.
Thanks for your view point and comment.
Regards,
Adam
Adam Hewison
President, INO.com
Co-Founder of MarketClub.com
I have a question regarding how to improve triangle stock trading results: Have you tried filtering monthly and weekly triangle buys with SPY or other overall market triangle buys or sector ETF triangle buys?
Chuck,
There are lots of ways to filter the Trade Triangles, we show you a very simple one with the monthly and weekly Trade Triangles. You can also filter the Trade Triangles using MACD and other technical tools. The key here is not to form fit the data to the system. You want something that works consistently over a good period of time. We've tested the Trade Triangles and have used them for many many years and they consistently work.
If you find something that's better than we have, by all means share it with as we would love to hear from you.
Once again thank you for your question and participating in the conversation.
All the best,
Adam
Adam Hewison
President, INO.com
Co-Founder of MarketClub.com
Read and head,
The United States voter and the media power that sways the majority of them one way or another had there chance twice to fix this finance mess. They have blown it both times with Ross in the 90's and Ron in 08 and 12. Yes there measures would have been extreme and painful to endure but it would have fixed the problem. Since no other "statesmen" could or would.
If you are one of those posters that say it is the TEA party patriots that should stop fighting for less spending, then you are the problem.
Are you saying lets print and spend until the dollar loses it's reserve status? Do you want you children to be debt slaves because you wanted the government to spend beyond it's means so YOU could make a fast buck now?
No nation in the history of the world has ever became successful by printing money, just ask Germany or any other nation that has tried it. Our day or reckoning is only taking longer because we kinda still have the reserve currency.
Maybe people should take the hard way out for a change and maybe your grand kids wont hate you for taking the easy way out again.
To be honest: what you be the money policy, if crisis had occured with Romney/McCain as president? Bernacke would have done the same job? Probably ....
Well known,
I think you missed the point of my post on this.
This "country" has extreme economic problem with SPENDING beyond it's means.
It will take extreme measure to fix this problem and the only ones willing to do this and take the heat while doing it are getting hounded right NOW by the President and senate leaders. On top of this the media is siding with the spenders who are Obama, 80% of the Dem's and 50% of the Repub's.
Stop watching the news and read the dam bill's they are passing on the weekends, then make an informed decision on who to call in congress and support.
I have little hope this will be done on a mass scale since most of the media is feeding the public hype and not facts on what is being passed back and forth. Never mind most Americas, more then half, don't think for themselves and only parrot what they hear out of the boob tube.
while I agree with you.........we are going to HAVE to go thru the reset brought on by west+japan debt...........anyone standing up in congress trying to stop the debt bomb will be villified by the majority of the populace.
we [collectively] cannot handle the truth, as sad as it is.
only if it were not so, J.........only if it were not so.........
"both parties know how angry the populace is with their childish behavior."
What is fascinating about this situation is that if the polls are to be believed, so very many more Americans think that the culprits are in fact principally if not entirely in one party, and a faction within that party at that. Can you guess which one?
You write informatively of the pound as a reserve currency. But monetary policy may have far less to do with this debacle than does America's constitutional tradeoff of stability for manoeuvrability. Like it or not, we chose a system in which we cannot simply call a vote of no-confidence and have by-elections within six weeks and a prime minister chosen from the legislators of the winning coalition. I dare say that in the UK this budget standoff would have been history months ago -- and in our House of Representatives, the present GOP majority, particularly its "al-TEAda" seditionists, would have evanesced like the morning dew.
Don't suppose Her Majesty would take us back if we Yanks said we were sorry, would she?
Probably not, after all this time, but you could always move up here to Canada - "The Peaceable Kingdom" as Prime Minister Pierre E. Trudeau once called it - and maybe even ultimately become a loyal subject of Her Majesty herself if you so desire. And if you do, you will never, ever again know what a doctor's bill or a hospital bill looks like. It's all paid for from tax revenue, much of which comes from the harvesting of our vast store of natural resources.
Greetings from R.B. in Canada.
The final verses of Kipling's poem, "Gods of the Copybook Headings" describes the situation of the $US and the fiat currencies puffing up the utopian visions of Western welfare states, :
As it will be in the future, it was at the birth of Man
There are only four things certain since Social Progress began.
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wabbling back to the Fire;
And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!
Kipling was the guy who also wrote:
When you're wounded and left on Afghanistan's plains,
And the women come out to cut up what remains,
Jest roll to your rifle and blow out your brains
An' go to your Gawd like a soldier.
I thought it was about........... changing the messed up spending. Oh well then we can all go broke together.
THE ONLY QUESTION WE REQUIRE TO THINK AT THIS JUNCTURE THAT WHETHER IT IS ANY CORPORATE OR ANY GOVERNMENT, HOW LONG ANY FINANCIAL JUGGLERY CAN BE POSSIBLE? AND IN WHICH SORT IT WILL BE ENDED?
Oops, should have said the Fed CAN create as many dollars as it wishes . . . .
Yes, we can.
Indeed they can print, but they have many other options to restict it via various money-policy related mechanism. The printed version of the money is only that, what we need for paying our daily needs.
The Fed can't create as many dollars as it wants to buy as many Treasury notes as it wishes. They can hand out trillions to prop up central banks and buy toxic paper and create hundreds of trillions to make interest rate swaps to suppress interest rates and make the dollar look good. Will work until those overseas get fed up with the debasement and the dollar gets eliminated from global trade settlements and has to compete with other currencies, then comes the financial Armageddon.
Steve,
My greatest fear is that the US dollar looses its reserve status in the world. If that happens it will be a blow that the US will never recover from. This happened in England my old home country and the Brits never got over it.
The first reserve currency was the British Pound Sterling. Because the pound was “good as gold,” many countries found it more convenient to hold pounds rather than gold itself during the age of the gold standard.
What goes around, comes around, and certainly times have changed from when Britain ruled the waves and the world. It can happen again as history tend s to repeat itself.
Appreciate your inpu t into this conversation.
Cheers,
Adam Hewison
President, INO.com
Co-Founder of MarketClub.com
Adam-
Is it possible that US interventions in Iraq, Libya and the beating of drums against Iran/Syria have little to do with containing aggression, responsibility to protect or responding to redlines, but more to do with Sadam, Ghadafi and Iran each threatening to trade oil for currencies other than $US??
The jig may already be up as trade agreements between Russia and China already exclude the $US as the means of exchange.
When President Nixon abandoned the gold standard in 1971, he made a deal with Saudi Arabia and ultimately with OPEC in which they would agree to exclusively sell their oil in $US. In return, we would defend their resources against whomsoever (Communists and now Islamists). As various oil producers in Northern Africa and the Middle East have moved toward abandoning the $US, we have coincidentally moved to overthrow or otherwise subvert (via Arab Spring) their governments.
Elliott,
Thanks for your view point and your a comment on this blog.
I really appreciate you expanding on history and especially on how President Nixon abandoned the gold standard in 1971. How quickly we forget history and the ramifications of decisions made decades ago.
Every success in the markets,
Adam
Adam Hewison
President, INO.com
Co-Founder of MarketClub.com
Richard Nixon had no choice in abandoning the gold standard, of course. Foreign countries (most notably France) with large dollar reserves were starting to redeem them for gold bars from the American treasury in large amounts, and the vaults would soon be empty of gold if the situation were allowed to continue.
Not necessarily history will repeat, but it is likely that every outcome of a economical situation itself repeats simetimes again, even if that event occured outside one human's life (or to be remembered by currently living people).
Influence of a currency to the world's economy probably is dependend also on how one counties' policy is influencing the world. There is always a relationship between money stability, influence and policy. $ will remain the be a leading currency, but Asian influence will further grow, IMO.