All posts by Tate Dwinnell

Janet Yellen A Cog In The Easy Money Wheel

janet yellen With the the likely appointment of Janet Yellen to Vice Chairwoman of the Fed, don’t expect the easy money policy to grind to a halt.  In fact, Janet “easy money” Yellen is more dovish than Kohn and another cog in the easy money wheel.  She supports extremely low rates to keep this economy artificially inflating.  In February, she commented on the economy saying  that while the economic tide appears to have turned and recovery is well under way, “the economy faces a long period of subpar growth, high unemployment and downward inflation pressure, and so it will continue to need “extraordinarily low interest rates.”  Let the good times roll.

The news has certainly helped pressure the dollar in the last couple days, but the dollar remains bullish for now and just consolidating recent gains.

Reactions To Cisco’s CRS-3 Router

The internet changing news from Cisco (CSCO) the tech world has been anxiously awaiting was unveiled today.  Cisco’s CRS-3 router has been heralded by CEO John Chambers as a system that can download the Library of Congress in a second, stream every movie made in four minutes and allow simultaneous video calls by every single person in China.  It will be available at a cost of $90K in the 3rd quarter of this year.  Mighty impressive, but let’s see what the tech experts have to say.  I thought I’d do a run down of some of the reactions to the big announcement today.

From BNET

BNET doesn’t see any immediate gratification unless others get on board  and says, “Chambers’ promise depends on cable operators and their telecom rivals abandoning greedy habits like doling out bandwidth in metered increments and randomly hiking service rates. So, this could take a while.”

From ChannelWeb

ChannelWeb reports that Cisco’s statement of 12x the capacity is aimed at competitor Juniper which has issued a statement saying the claims are misleading: “The claim of 12 times the traffic capacity of the nearest competing system is based on a theoretical maximum of 72 interconnected CRS-3 chassis in order to achieve the 322Tbps total capacity — this will likely never be deployed in practice due to space, power, and manageability realities.”

From Yankee Group

The Yankee Group notes that the CRS-3 is IPv6 ready, designed to handle the explosion of mobile devices, “cloud ready” and 10x the speed of the closest competitive product but doesn’t quite live up to the big hype.

Quote: “So, did the Cisco CRS-3 live up to the immense hype that preceded it?  No, I don’t think so. But they did set a very high bar.  It’s a good solid announcement that will allow network operators to put a foundation in place to drive differentiated multimedia and mobile services.”

In my opinion, the technology is great and a big step towards handling the explosion of data, but let’s put it in perspective.  As a UBS analyst pointed out today, the high end router market represents less than 5% of Cisco revenues.  The new router may be a game changer for the internet in the years to come, but it’s probably not a game changer for the stock price.

Shares of Cisco were flat today.  Get your CSCO trend analysis here.

Lindsay Lohan Suing Etrade (ETFC) Over Milkaholic Commercial

A brief reprieve from regular programming to bring you this entertaining story out of fantasy land.. I mean Hollywood.   Lindsay Lohan, clearly confused and out of touch with reality OR “just following the advice of a greedy lawyer”, is actually filing a lawsuit against Etrade (ETFC) because she feels that the Etrade Milkaholic ad is referencing her when they use the name Lindsay.  No joke.

The ad debuted during the Superbowl and features the baby boy apologizing to his girlfirend for not calling her.   She accuses him of having that “milkaholic Lindsay” over.  The lawsuit claims that many celebrities are known by their first name (ie Madonna, Cher) and that Etrade is knowingly trying to profit from the name Lindsay which everyone assumes is Lindsay Lohan. 

She’s suing for $100 million and removal of the ad.  The Grey Group, which produced the ad, is saying it’s just a popular name and is the name of someone on their team.  As  for Etrade, they are basking in the glow of free media attention which this is sure to generate.  Well done.

::: >>> Click Here For Your FREE Etrade Analysis

Facebook IPO In 2011?

image The biggest IPO story since Google will continue to leave investors wondering.  While the Facebook IPO will happen, there are still no imminent plans with founder Zuckerberg saying “we’re definitely in no rush”, according to a WSJ article today.  He makes a good point in that the company is in the envious position of not requiring massive capital to build factories or even market the product, so the same motivations for going public quickly aren’t there.  Adding to the delay may be the fact that Zuckerberg, as the WSJ points out, is a micro manager who may be having a tough time relinquishing some control of the company of which he owns 25% of and controls voting power.

However, an IPO will take place as investors and shareholders have been promised and the company has been taking measures to prepare for it.  In 2008, the executive team was expanded highlighted by the hiring of Google exec Sheryl Sandberg and adding Netscape founder Marc Andreessen to the board.  Of course, the rumors, speculation and predictions are flying and many think the company will go public next year with a market cap of nearly $40 billion based on the current revenue number and applying a multiple similar to that of Google.  The company apparently was cash flow positive last year and believes revenue could reach $2 billion this year.

In the meantime, Zuckerberg found a way to ease the growing impatience of its employees for a big pay day ahead of an IPO.  Last year, $100 million in shares were sold to Russian firm Digital Sky Technology which also invested another $200 million giving them a 3.5% stake in the company without increasing the shareholder base.  Just an appetizer of what will likely be a rain of cash for Facebook employees. 

Another Great Depression Stock Market?

Much has been made of the similarities between current times and the Great Depression.  The first leg down of each crash creating fear that a complete financial collapse was imminent, only to be averted by massive liquidity fueling hope and optimism, at least for a short time.  If history does indeed repeat itself (and it often does in the stock market), then there is reason for Great concern. 

We’ve now completed the first big crash (in the latter half of 2008), followed by the first big retracement of around 50%.  Now, just like then, there are many that feel we’re out of the woods with some talking heads even calling for a new bull market.  A 50% retracement rally in less than a year will do that.  Nobody knows how all this plays out, but with the growing debt issues, the coming increase in taxes, growing government control and the and the fear of skyrocketing inflation down the road, it’s not exactly conducive to a rip roaring economy. .. and you can’t ignore the similarities to 1929.  At the very least, we’ve got an extremely bumpy road ahead and it’s going to pay to be extremely cautious in the coming years.

Below is a great video done by Adam Hewison of Market Club taking a look at the stock market in 1929 vs 2010 through the Dow.  He brings up a good point that many baby boomers have already been hit hard once, recovered much of losses and will likely do anything to protect what’s left of their nest egg which includes exiting the stock market completely.  Perhaps that’s a train that can’t stopped no matter how much money the government throws at it.

Click to view the video

dow-stock-market-crash-great-depression

Video: S&P Indicates Institutions Heading For The Exits

As I mentioned in the last market health blog post, the market has turned to the bearish side and I have two videos for you taking a look at this important index.  One video is from me, taking a look at all the important support and resistance levels on the weekly, daily and hourly time frames of the SPY (S&P tracking ETF) and the other is from Adam Hewison of Market Club taking a look at the S&P 500.  He highlights the fibonacci retracement as well as his proprietary trade triangle technology to determine how to play this market in the coming weeks.  We both come to the same conclusion.

Click the image to view Adam’s video

S&Pino12310

Click the image to view my video

spytelechart12310

Bulls Run Out Of Gas As S&P, Dow Take Out Key Support

The following was a note sent to my premium members tonight and wanted to pass it along to my blog readers: 

It’s safe to say the bulls have run out of gas.  It’s always interesting how the market begins to show signs of deterioration in certain leaders and sectors before the big plunge takes place.  Over the past couple weeks, we witnessed the China plays begin to crack.. it began with the high flying water plays, moved to the solar names and today it was the wind energy stocks.  In hindsight, I regret a bit not taking more off the table in the China names.  I thought increasing the hedge with FXP would be enough.. not quite enough.  I still have a longer term view of these stocks and they will all benefit big time as China pours billions into green energy.  However, I may look to ease up if I can get some decent bounces back to resistance levels. 

As you know, I have been increasing overall short exposure in the past week as those distribution days began to pile up.  Today was the fourth in less than two weeks which culminated in the Dow taking out key support levels of the 50 day moving average and the upward trend off the March lows.  Today was the most significant day of selling I’ve seen since the end of October.  I certainly thought the market was topping out then, so I could certainly be wrong again, but when I see this kind of distribution I will play accordingly and adjust if I’m proven wrong.  Along with the Dow taking out the 50 day moving average with heavy volume, the S&P has taken out an important level of support of the upward trend line off the July lows.  It still has support of its 50 day moving average, but downward momentum would indicate that it probably wants to test that 1100 level in the coming days. 

So, in light of the moves of the past two days, the strategy of the portfolio has shifted and that is to get more aggressive with short exposure into the rallies.

You can see the Dow taking out minor support around 10500 today and major support of the 50 day moving average with heavy sell volume.  More Dow analysis here.

12110_dow   

The S&P is still holding its 50 day moving average but probably not for long considering today’s downside momentum.  More analysis of the S&P here.

12110_sp

Oil ETF Central Launches!

green_stocks_central_logo_post In 2008 I expanded the offerings of Self Investors LLC to include a portal focused on green energy stocks which is quickly becoming one of the top portals for all your green stocks information.  It includes breaking news, republished content from other authority sites in the green stocks space, tracking, the latest twitter posts, videos and featured content.  I have plans more improvements and features this year!

There isn’t a direct correlation between green stocks and oil prices, but some correlation can’t be denied.  If oil prices continue to rise back above the $100/barrel level or even just stay where they are, then alternative sources of energy become much more attractive and the stocks of companies in wind, solar, electric cars, the smart grid, etc benefit big time.  It’s safe to say that in the coming decades, the prices of commodities will continue to rise as supplies diminish and demand skyrockets.

oil_etf_central For this reason, I have put together another portal for investors called Oil ETF Central which focuses on oil prices and oil ETF’s.  It’s still very much in beta and literally days old, so much work remains, but I think it’s useful enough to present to the public 🙂  Feel free to contact me with suggestions to help make this portal an even better source of information for oil ETFs.  Your feedback is always welcome and much appreciated.

Next Hot China Auto Stock? China Auto Logistics (CALI)

China stocks have been one of the best places to profit for traders and longer term investors alike over the past several years and that continues today.  Granted, the risk increases with each passing day as the market continues to push higher off the March lows, but the longer term opportunities are here to stay.  The longer term investor may just want to practice a little patience before diving in after such a torrid run 🙂

I like to focus on niches of the China market and certainly my focus in the coming years will be on companies in the green energy space, which would include everything from solar, to wind, to electric cars to water conservation and treatment.  China is leading the way in alternative energy technology and will continue to pour billions into it to ensure they remain on top.  Back in June, I focused on the China water industry with a look at Duoyuan Global Water (DGW) ahead of its IPO.   It’s just one of a few China water plays that have been on fire in recent months, with gains of 100 – 300%.  For news, analysis and tracking of all the China alternative energy play, you might like to have a look at a new site I launched last year called Green Stocks Central.

Today, I shift gears a bit and focus on the China auto industry which has seen tremendous growth over the past year. 

Continue reading Next Hot China Auto Stock? China Auto Logistics (CALI)