Debt Man Walking

July 29, 2011

If the United States government raises the debt ceiling it will face problems down the road. If it does not raise the debt ceiling it will have to face some problems right now. Is there really a point in having a debt ceiling at all? Almost every administration in the past has raised the debt ceiling before. The question should be asked, is the United States at its breaking point where the country cannot absorb any more debt? The truth is that none of us really know for sure what the breaking point will be for the United States when it comes to debt. At some point the country will break because it has too much debt, however, we do not know if that number is $14.5 trillion, $16.5 trillion, or $50 trillion. These numbers are so large that it is impossible for the ordinary working man to understand the complexity of this situation.

The United States has long been recognized as the richest nation in the world. How can this be if this is the greatest debtor nation in the world? If you have ever been in debt on a personal level it is one of the worst feelings in the world. People have gone into deep depressions over unpaid bills and obligations. Debt and financial problems are the number one cause for divorce in the United States. Why does the government love to be in debt all of the time? The last time the United States was not in debt was when Andrew Jackson was the president, that was in 1835. Even at that time the United States had a financial panic just two years later in 1837 and then face a depression. So is debt good to have as long as it is manageable?

The major stock market indexes have been trading lower throughout the entire week including today. This country has kicked the can down the road when it comes to debt since it began. History suggests that the U.S. government will do it again. Either way the United States is a debt man walking.

Nicholas Santiago
InTheMoneyStocks.com

U.S. Dollar Index Plummets After GDP

July 29, 2011

The U.S. Dollar Index futures (DX U1) plummeted lower after the second quarter gross domestic product(GDP) number was released. Normally, when the U.S. Dollar Index declines it will help to inflate the major stocks and commodity markets, however, today could be a different scenario. Stocks such as Freeport McMoRan Copper & Gold Inc.(NYSE:FCX), Cliffs Natural Resources Inc.(NYSE:CLF), and Southern Copper Corp.(NYSE:SCCO) are coming under early selling pressure despite the decline in the U.S. Dollar Index.

At this time, the inverse relationship between the U.S. Dollar Index and the major stock market indexes may not be intact. The stock markets are confused as the failed U.S. debt ceiling deal out of Washington remains in limbo. Traders should watch for any kind of news from the politicians, any indication of a debt ceiling deal could cause the markets to bounce intra-day. Traders should realize that the U.S. Dollar Index futures will have some short term intra-day support around the $74.00 area.

Nicholas Santiago
InTheMoneyStocks.com


I See Debt People Everywhere: Europe Union, And U.S. Debt Ceiling In Focus

July 29, 2011

What else is new in the world of finance? The European Union continues to struggle with its debt crisis, debt contagion is spreading like a wildfire in the dry forest. The U.S. politicians have still not reached a debt ceiling resolution. The S&P 500 Index e-mini futures (ES U1) are trading sharply lower ahead of the opening bell. Traders and investors simply have very little certainty in the markets. It would be better for the markets to simply know that the U.S. debt ceiling will not be raised then to go through all of these shenanigans by the politicians. The markets will adjust to any news, they always do.


Stock Market Analysis Video: Major Vote, Markets Blast Or Crash

July 28, 2011

The markets are preparing for the vote later today. This is biggest vote since TARP was passed. This vote will be in regards to John Boehner’s debt reduction and debt ceiling bill. If it does not pass, the markets will panic sell as it would be unlikely the debt ceiling would be raised before the August 2nd deadline. Stocks started the day with an optimistic push but have since fallen back to the flat line. Technology stocks like AAPL, GOOG, AMZN and IBM are leading, along with banks like GS and JPM. How do you play this vote?

 


Stock Market Reality: The Truth On The House Vote

July 28, 2011

The markets are holding their collective breath as they look towards the vote later in the House of Representatives. John Boehner’s bill outlining budget cuts and raising the debt ceiling will be on the chopping block. This is ultimately the biggest vote the markets have seen since TARP passed in 2008. The reason why it is so big? If it fails to pass, it is likely no deal will be reached by the August 2nd deadline. Should it fail to pass this evening, the futures will likely dive three-percent or more in after hours trading and Asia and Europe will tumble. If it passes, the futures will spike. Many amateurs think that even if the bill gets past the House, it will fail in the Senate. While this may be true, my guess is it will matter. Should the bill pass in the House, the Democrats will ask for small changes and revise it slightly, then pass it. Again, it all comes down to the first vote this evening. Watch it like a hawk.

The markets are bouncing slightly after yesterday. A little bit of optimism is creeping in on hopes the new spending and debt ceiling bill will pass. The SPDR S&P 500 ETF (NYSE:SPY) is trading at $131.29, +0.68 (+0.52%).  The Dollar continues to inch higher as well. This may be a leading indicator that is telling the market a deal is coming. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) is trading at $21.14, +0.05 (+0.24%).

The leading sectors today are technology and banks. International Business Machines Corp. (NYSE:IBM), Apple Inc. (NASDAQ:AAPL), Google Inc. (NASDAQ:GOOG) and Amazon.com, Inc. (NASDAQ:AMZN) are all higher. In the financial arena, solid gains are being seen in Goldman Sachs Group, Inc. (NYSE:GS), JPMorgan Chase & Co. (NYSE:JPM) and Bank of America Corporation (NYSE:BAC).

Gareth Soloway
InTheMoneyStocks.com


Kill Emotion Then Profit: Stock Markets Rise

July 28, 2011

The house will be voting this evening on the John Boehner plan. There are questions on whether or not it will pass. Should it pass, the debt ceiling will be raised within days. Slight optimism is keeping this market higher today. The SPDR S&P 500 ETF (NYSE:SPY) is trading at $131.59, +0.99 (+0.76%). Many investors were ready to jump out of the window yesteday, as fears of a default spread. Always avoid emotion and trade off logic. This was the key to buying longs yesterday and maximizing profits today.

Yesterday, I wrote a blog entry discussing why, how and when a budget and debt ceiling agreement would be reached. Understanding this helped avoid the fear that so many other amateur traders were swept up with. It also allowed me to enter long plays on Bank of America Corporation (NYSE:BAC) at $9.70, Cree, Inc. (NASDAQ:CREE) at $32.15 and ProShares Ultra S&P500 (NYSE:SSO) at $51.85. These were posted and time stamped to Research Center members.  All three plays are rocking it today. CREE is up 10% on the day, hitting a high of the day at $34.44 after the alert to buy at $32.25. Bank of America is trading at $9.80, +0.12 (+1.24%) and the ETF SSO, which is two times long the S&P 500 is trading at $52.32, +0.63 (+1.22%) after the buy alert was triggered at $51.85.

As profits continue to pile up, it is important to recognize why and how? First, avoid the Wall Street hype and focus on reality. Ignore emotion and use logic. By doing that you would clearly understand that the debt ceiling will be raised and the markets will rally.  The next step is to focus on the charts and find the appropriate buy levels. This was done on all three trades yesterday. This helps maximize profit.

Gareth Soloway
InTheMoneyStocks.com


Too Big To Fail Keeps Markets Alive So Far

July 28, 2011

As we all know by now, the large financial institutions have lead the markets lower over the past three months. This morning, it is the large financial stocks that are trading higher on the session keeping the markets alive. When the financial stocks show intra-day strength it is very difficult to see the major stock indexes decline. Now on the flip side, if the large financial stocks begin to sell off and decline then we should all be aware that the major stock indexes could continue to come under selling pressure.

This morning, leading financial giant J.P. Morgan Chase & Co.(NYSE:JPM) is trading higher by 0.35 cents to $41.02 a share. Short term traders should watch for intra-day resistance around the $41.20 area. This stock is the most important financial stock in the entire stock market.

Citigroup Inc.(NYSE:C) is trading higher by 0.29 cents to $38.55 a share. This financial giant will have intra-day resistance around the $39.00 level. Citigroup stock is still trading below all of its major daily chart moving averages which puts the stock in a weak technical position.

Goldman Sachs Group Inc.(NYSE:GS) is another leading financial giant that has rallied higher after reporting earnings on July 19, 2011. This stock will have intra-day resistance around the $137.00 level. Should GS trade higher throughout the session the next resistance level will be around the $138.00 area.

Other giant financial stocks that are trading higher include Morgan Stanley(NYSE:MS), and Bank of America Corp.(NYSE:BAC). It is important to remember that if the financial stocks begin to trade lower as the major stock indexes will come under pressure. The “too big to fail” stocks are carrying a lot of weight these days.

Nicholas Santiago
InTheMoneyStocks.com