Stocks & Equities
The numbers are always the numbers. The amount of voter fraud is off the planet. Obama won in every state that did not require a Photo ID and lost in every state that did require a Photo ID in order to vote. Some places all votes went to Obama and none at all to Romney as in Philadelphia. But this is merely a sign of the times. During the elections of 53BC, interest rates in Rome doubled because of the amount of borrowing to pay bribes. Then Caesar had to revise the calendar because the high priest had been bribed to insert so many days to postpone elections that what should have been winter was then summer. And we think elections are ever going to be fair?
The interesting thing is the Dow Jones has a Yearly Bullish Reversal at 12567. Electing this will not be an immediate buy signal on the daily level, but this is warning what we have been talking about. Yes there has not been a lot to do. We are in a holding pattern churning like butter back and forth, This signal is suggesting that the low is indeed in place and that we will see higher highs.
In other words, capital will start to shift from PUBLIC to PRIVATE. Keep debt investment as short as possible. US will be the last to go, but still be careful with MUNIs. Interest Rates should start to rise in 2013. Once this takes place it will reveal that the emperor has no clothes. The Fed will be unable to keep rates low. The banks have been enjoying a huge spread paying nothing to depositors – 0.5% for 3 years while demanding 4% for 3 years fully collateralized loans..
We will report after Year-end what buy and sell signals we have for the upcoming year. It looks like the August 7th ECM date will be important.
The Rising Tide of Political Change
At the Berlin Conference, we provided an overview that shocked many……continue reading HERE
U.S. Political Theatre Set to Mercifully End – For Now
Toronto’s main index closed this week down 57.65 points, or 0.47%, at 12,316.12. It edged down 0.6% for the week and is now up only a touch over 1% year-to-date – basically a flat 2012.
The political circus that is U.S. politics continued this week sending jitters throughout the lightly-traded holiday shortened week.
Late Friday, there are reports that the end game may be close hand, as the White House and Senate leaders took a final stab at compromise to prevent middle-class tax increases from taking effect at the turn of the New Year and possibly prevent sweeping spending cuts as well.
“I’m optimistic, we may still be able to reach an agreement that can pass both houses in time,” President Barack Obama said at the White House after meeting for more than an hour with congressional leaders.
Surprisingly, after weeks of postelection gridlock, Senate leaders sounded even more bullish.
The Republican Leader, Sen. Mitch McConnell of Kentucky, said he was “hopeful and optimistic” of a deal, adding he hoped a compromise could be presented to rank-and-file lawmakers as early as Sunday, a little more than 24 hours before the year-end deadline
The core issue is the same as it has been for more than a year, Obama’s demand for tax rates to rise on upper incomes while remaining at current levels for most Americans. He made the proposal central to his successful campaign for re-election, when he said incomes above $200,000 for individuals and $250,000 for couples should rise to 39.6% from the current 35%.
In the end however, we believe the “tax the rich” mantra is misguided. While we agree the wealth should pay their fair share, in this case, the hike will do little to stem the debt tide that continues to mount and handcuff the U.S. economy.
Three issues which could have a significant impact on reducing the deficit are tax reform (closing loopholes in this current system), entitlement cuts, and a federal sales tax. Sadly, the later is not even part of the conversation. This type of tax, if implemented correctly with exemptions on certain essential items, can go a long way towards a balanced budget overtime and impacts those who spend the most.
For Canadian markets, with consumer debt levels reaching highs never seen before and deleveraging becoming a must at home and abroad, we expect the broader returns to be flat. This does not mean we cannot make money in 2013. In fact, we remain selectively excited as our “Cash is King” theme continues to reign supreme in this stock pickers market.
Heading into 2012, which we expected to be a relatively flat market overall for Canadian stocks, we identified two themes that would be paramount to success in the Small-Cap segment. In our January 2012 Outlook Commentary, Keystone detailed the first of those themes as our bias towards growth companies who managed their cash flows effective enough to paid decent dividends with low payout ratios – essentially dividend growth stocks.
The second trend we focussed on heading into 2012, which will continue into 2013, is the reign of the balance sheet. Companies with strong balance sheets, including zero or manageable debt, solid cash positions, good working capital, and good cash generation, garner the most attention. This attention can come from good to premium multiples or in the case of 7 companies from our 2012 Cash Rich, Profitable Small-Cap Report, premium takeover bids.
Both can lead to superior returns for investors.
KeyStone’s Latest Reports Section
Marc feels that global markets may be euphoric right now, but they are likely to drop 20 per cent in near term. He also feels that while the printing of money by central bank is keeping prices up, eventually there will be a much bigger crash.
…..click HERE to watch the interview >>>>
Marc Faber : The whole Global Financial System will have to be Reset and it won’t be Reset by Central Bankers but by imploding markets
Faber told CNBC’s “Squawk Box.” “The market is going down because corporate profits will begin to disappoint, the global economy will hardly grow next year or even contract, and that is the reason why stocks, from the highs of September of 1,470 on the S&P, will drop at least 20 percent, in my view.”
Todd Market Forecast for Wednesday December 26, 2012
Available Mon- Friday after 6:00 P.M. Eastern, 3:00 Pacific.
DOW – 24 on 950 net declines
NASDAQ COMP – 22 on 700 net declines
SHORT TERM TREND Bullish
INTERMEDIATE TERM TREND Bullish
Again, fiscal cliff concerns, but also disappointing Christmas sales weighed on the equity markets. Not even strength in Asia could keep a fourth down day out of the last 5.
Be aware that with the stock market getting on the threshold of an oversold condition, a deal on the fiscal cliff, even a lousy one could cause a knee jerk rally so we’ll stay on the alert.
An example of this oversold condition is the percentage VIX change 5 day moving average. Readings above 3.0 frequently portend a rebound. Today it closed at 4.8.]
TORONTO EXCHANGE: Toronto was closed for the Boxing day holiday.
GOLD: Gold was up $1.
BONDS: Bonds were mildly higher.
THE REST: The dollar was slightly lower. Gold, silver, copper and crude oil were all up.
BOTTOM LINE:
Our intermediate term systems are on a buy signal.
System 2 traders We are in cash. Stay there on Thursday.
System 7 traders We are in cash. Stay there on Thursday.
NEWS AND FUNDAMENTALS:
The Case Shiller home price index rose 0.7% month over month, better than the expected 0.5%. On Thursday we get jobless claims, new home sales, consumer confidence and oil inventories.
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We’re on a buy for bonds as of December 21.
We’re on a sell for the dollar and a buy for the euro as of November 19.
We’re on a sell for gold as of December 18.
We’re on a sell for silver as of December 19.
We’re on a buy for crude oil as of November 19.
We’re moving back to a buy for copper as of today December 26.
We’re on a buy for the Toronto Stock Exchange TSX as of November 21.
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 ( Below .80 is a negative. Above 1.00 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).
No guarantees are made. Traders can and do lose money. The publisher may take positions in recommended securities.
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Once per year in January, Timer Digest publishes the rankings of all services monitored for multiple time frames.
For the years 2003, 2004 and 2005, The Todd Market Forecast was rated # 1 for the preceding ten years. For the year 2006, we slipped to # 3 and in 2007, we were ranked # 5.
Our bond timing was rated # 1 for the years 1997, 2007 and 2008.
Gold timing was rated # 1 for 1997 and # 2 for 2006. Late word! We were rated # 1 for 2011.
We were # 1 in long term stock market timing for the years 1998 and 2004 and # 4 in 2010.
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Todd Market Forcast | P.O. Box 4131 | Crestline, CA | CA | 92325
Canada’s main stock index ended little changed on Friday, in a year where broader market gains on the exchange have been few and far. 2012, we suggested the index would be challenged to produce growth, the S&P TSX 300 Composite has posted a scant 1.7% return to-date.
For Canadian markets, with consumer debt levels reaching highs nary seen before and deleveraging becoming a must at home and abroad, we expect broader gains will be challenging in 2013 as well. This does not mean we cannot make money in the year to come. In fact, we remain selectively excited as our “Cash is King” theme continues to reign supreme in this stock pickers market.
On a whole, 2012 has been a good one for our research, as we witnessed a wave of M&A activity from our coverage universe, producing seven premium takeover bids from our 2012 Profitable Cash Rich Special Report and 2 more of the 7 new companies introduced into our Small-Cap Coverage in 2012 – The Brick Ltd. (BRK:TSX) and C&C Energia Ltd. (CZE:TSX).
But at this time of year, our thoughts and the thoughts of the market as a whole tend to turn to the holidays. We leave you with the following bit of prose.
‘Twas the night before Christmas, and all through the research house,
Not an analyst was stirring, save that crazy intern Clouse;
All new recommendations studied for 2013 with care,
In hopes that our next great growth stock will be in there;
Our clients were restful, tucked snug in their beds,
While visions of more takeovers danced in their heads;
And mamma with her calculator, and I in my cap,
Had just looked at our 2012 returns, and broke out into rap,
When there on the TV there arose such a clatter,
I sprang from my calculations to see whom I could batter.
Away to the set I flew like a flash,
Stepped on a skateboard and tripped over the trash.
The reporters on CNBC so cheery and upbeat,
Made me sick to the stomach as I fell from my feet,
When, what to my frustrated eyes should appear,
But Fed Chairman Bernanke, and eight empty beer,
With a swig and a wink, so lively and quick,
I thought for a moment, “Who was this old ——?”
More rapid than eagles, his stimulus it came,
And he coughed, and wheezed, and called them by name;
“Now, QE 1! now, 2! now, 3 why not 4!
On, ESL! on XTC! on ABM and More!
To the top of the index! Produce cash and don’t you dare fall!
Now rally away! Rally away! Rally away all!”
And I heard him exclaim, as he drove out of sight,
“PROFITABLE INVESTING KEYSTONE CLIENTS, AND TO ALL A GOOD-NIGHT”
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Since 1998, KeyStone Financial has provided its subscribers and institutional clientele with premium independent small-cap stock and now Income/Growth Stock research – it is quite simply coverage you can find nowhere else. Our Find Out More HERE
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