China’s stock market is crashing, and the Chinese are trying to do the exact same thing America did in 1929

On Wall Street in 1929, it was the great banking houses of J.P. Morgan and Guaranty Trust Company.

In China today, it’s names like Citic Securities Co. and Guotai Junan Securities Co.

They’re separated by 86 years and 7,300 miles, but Chinese financiers are turning to the same playbook used by their American counterparts to fight a crash that’s wiping out stock-market fortunes on an unprecedented scale.

Investors in China are hoping it works out a lot better this time around.

….read more of China Brokers Dust Off Wall Street Playbook From 1929 Crash

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140, and profit target at 1,980, S&P 500 index)

Our intraday outlook is bearish, and our short-term outlook is bearish:

Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): bullish

The main U.S. stock market indexes were mixed between -0.2% and +0.1% on Thursday, extending their short-term fluctuations, as investors hesitated following recent move down. The S&P 500 index remains below the level of 2,100. The nearest important level of support is at around 2,040-2,050, marked by March local lows. On the other hand, resistance level is at 2,090-2,100, among others:

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Expectations before the opening of today’s trading session are negative, with index futures currently down 0.5%. The European stock market indexes have lost 0.5-1.2% so far. Investors will now wait for the ISM Service number release at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday uptrend, following lower opening. The nearest important level of support remains at 2,030-2,040, and resistance level is at 2,065-2,070, marked by Friday’s consolidation, as the 15-minute chart shows:

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The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades along the level of 4,400. The nearest important resistance level is at 4,400-4,420, and support level is at around 4,350, as we can see on the 15-minute chart:

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Concluding, the broad stock market continued to fluctuate on Thursday, along its short-term local highs, as investors awaited Greece debt crisis news releases. For now, it looks like a correction within two-week-long downtrend. Therefore, we continue to maintain our already profitable speculative short position (2,098.27, S&P 500 index), as we expect a medium-term downward correction or an uptrend reversal. Stop-loss is at 2,140, and potential profit target is at 1,980. You can trade S&P 500 index using futures contracts (S&P 500 futures contract – SP, E-mini S&P 500 futures contract – ES) or an ETF like the SPDR S&P 500 ETF – SPY. It is always important to set some exit price level in case some events cause the price to move in the unlikely direction. Having safety measures in place helps limit potential losses while letting the gains grow.

Thank you.

Courtesy of Stephen Todd Market Forecast for Thursday July 2, 2015  

Available Mon- Friday after 6:00 P.M. Eastern, 3:00 Pacific.

DOW                                                 – 28 on flat breadth

NASDAQ COMP                                   – 4 on 750 net declines

SHORT TERM TREND                         Bullish  

INTERMEDIATE TERM TREND             Bullish

Special notice. The U.S. markets are closed on Friday for the July 4th holiday. We’ll talk to you on Monday. 

STOCKS: The market greeted a slightly worse than expected employment report with an initial surge based on the idea that this would dissuade the Fed from tightening monetary conditions.

Then we seem to have begun to worry about the Greek vote on Sunday. A no vote would probably cause some selling as this would hasten the Greek exit from the EU.

       Goldman Sachs didn’t help when they lowered estimates for S&P earnings.

GOLD:  Gold lost $3. Gold just keeps inching down, probably on the assumption that the Greeks would vote to stay in the EU.  

    NEXT DAY: Monday. No prediction. It all hinges on the Greek vote on Sunday.

CHART:   Five day RSI has just turned up from an oversold condition. This is normally good for at least a few days on the upside.

BOTTOM LINE:  (Trading)

Our intermediate term system is on a buy.

   System 7   We are long the SSO from 65.70. Let’s hang in here. We had a tough execution break with the sharp up opening on Wednesday. Hold through Monday.                    

   System 8   We are in cash. Stay there.                    

GOLD  We are in cash. Stay there.     

News and fundamentals:  Non farm payrolls showed an additional 223,000 jobs added. This was less than the expected 230,000. Jobless claims were 281,000 more than the consensus 270,000. Factory orders dropped 1.0%, The expectation was for a drop of 0.3%. On Monday we get the ISM services index.  

Interesting Stuff  “I never buy at the bottom and I always sell too soon”. Barron Nathan Rothschild.—— This was suggested by a client. Barron Rothschild was a 19th century investor and heir to a great banking house. Some investing thoughts are very old—and quite valid—-We encourage ideas from subscribers.

TORONTO EXCHANGE:   Toronto was up 85.   

S&P/TSX VENTURE COMP: The TSX was flat.      

BONDS:  Bonds had a slight rebound.                                                

THE REST:  The dollar pulled back. Silver bounced. Crude oil tried to rally then fell back to close lower.          

We’re on a buy for bonds as of June 11.                      

We’re on a buy for the dollar and a sell for the euro as of June 23.                       

We’re moving to a sell for gold as of today July 2.                         

We’re on a sell for silver as of June 23.                        

We’re on a sell for crude oil as of June 4.                             

We’re on a sell for the Toronto Stock Exchange as of May 6.    

We’re on a sell for the S&P\TSX Venture Fund as of October 30.    

We are on a long term buy signal for the markets of the U.S., Canada, Britain, Germany and France.  

 INDICATOR PARAMETERS

     Monetary conditions (+2 means the Fed is actively dropping rates; +1 means a bias toward easing. 0 means neutral, -1 means a bias toward tightening, -2 means actively raising rates). RSI (30 or below is oversold, 80 or above is overbought). McClellan Oscillator ( minus 100 is oversold. Plus 100 is overbought). Composite Gauge (5 or below is negative, 13 or above is positive). Composite Gauge five day m.a. (8.0 or below is overbought. 13.0 or above is oversold). CBOE Put Call Ratio ( .80 or below is a negative. 1.00 or above is a positive). Volatility Index, VIX (low teens bearish, high twenties bullish), VIX % single day change. + 5 or greater bullish. -5 or less, bearish. VIX % change 5 day m.a. +3.0 or above bullish, -3.0 or below, bearish. Advances minus declines three day m.a.( +500 is bearish. – 500 is bullish). Supply Demand 5 day m.a. (.45 or below is a positive. .80 or above is a negative). Trading Index (TRIN) 1.40 or above bullish. No level for bearish.

      No guarantees are made. Traders can and do lose money. The publisher may take positions in recommended securities.

The impending rate hike has made bargains of some income names

The latest commentary from the Federal Reserve helped soothe the market’s anxiety about the impending rate hike, but it wasn’t enough to let dividend stocks off the hook.

Dividend payers like utilities, real estate investment trusts and telecoms are getting shellacked in anticipation of the Fed raising interest rates for the first time in almost a decade — and deservedly so. After all, dividend stocks compete with bonds for investors’ dollars, and bond prices fall when interest rates rise.

Happily, the general downdraft in dividend stocks has unduly punished a number of high-quality names with generous payouts. There’s nothing quite like a beaten-down dividend stock for outsized total-return potential, so it usually pays to hunt for any names on sale.

As much as rate-hike pressure might tamp down performance in the shorter term, that headwind will eventually pass, unleashing market-beating returns for any number of dividend stocks.

Besides, it’s not automatic that dividend stocks must drop on a rate hike. Indeed, dividend payers in pro-cyclical sectors like industrials and materials tend to rise. Don’t forget: The central bank raises rates because the economy and prices are picking up steam — two things that are good for corporate revenues.

With all that in mind, we scoured the S&P 500 for beaten-down dividend stocks with compelling fundamentals and valuations. True, these names may suffer in the intermediate term because of the rising-rate environment, but they also look like bargains. Between rising share prices and generous payouts, these dividend stocks are set for outsized total returns if held long enough.

…..read page 2 HERE