Weekly market momentum scoreboard 10/7/2009

On Financial Tides at the end of each week after all the smoke clears and the analyst go home I like to take an objective view of what the market really did and how it stands in relationship to the big picture. This week the market had to overcome the big news of a 10.2% unemployment rate, a rate that though still climbing is not climbing as fast as before. Remember the unemployment rate is a lagging economic indicator.

I use BarChart for my technical analysis data. I like the Value Line Index instead of the Dow 30 or S&P 500 because it contains 1700 stocks making it a much broader indicator.

Value Line Index - improving but not back all the way

• The Index was up 3.35% for the week but is still off its previous high by 6.08%
• BarChart's 13 technical indicators still have the index a sell with 4 buys, 4 holds and 5 sells although the sells are weakening and the holds are to the bullish side
• The Index is plotting below the 20 & 50 day moving average but is still above the 100 DMA

BarChart Market Momentum -- the percentage of stocks trading above or below their Daily Moving Averages -- 6000 stocks -- support at the 100 DMA

• 20 DMA -- 64% trading below
• 50 DMA -- 53% trading below
• 100 DMA -- 72% trading above

The ratio of stocks hitting new highs to new lows for various periods - bullish above 1.01, neutral 1.00, bearish below .99 - the ratios this week are getting better

• 20 day new high/new low ratio -- 414/456 = .91
• 65 day new high/new low ratio -- 276/203 = 1.36
• 100 day new high/ new low ratio -- 257/111 = 2.32

Summary -- a week of a little bit of recovery but not a full blown bear market yet. I'll cautiously add a few stocks to my Wall Street Survivor portfolio but only if they meet all my buy criteria.

I did fine on my Wall Street Survivor portfolio with a gain of 6.92% for the week, better than the 3.35% for the Value Line Index. That was good enough for 3rd place but not as good as Anthony Miraydan who beat us all with a 16.09% return

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email FinancialTides@gmail.com

Disclosure: I do not hold any actual positions in any of stocks in my Wall Street Survivor portfolio at the time of publication

Subprime dejavu all over again

I really thought we had all paid our dues on this subprime mortgage fiasco by the big hit we all took in our investments in banks, securities firms, CMOs and mortgaged back bonds. Just when I thought it was all over I read an article by Tara Servatius in Creative Loafing titled "Mops Away! : Meet you subprime lender". Her article frightens the heck out of me.

In the article she shares how now that the banks and mortgage origination scum aren't taking advantage of the poor folk our Fed agencies FHA, Fannie Mae and Freddie Mac have taken up the slack. Most of the home sales in Charlotte have been under $130,00 and take advantage of the $8,000 tax first time home buyer tax credit.

Our federal government is subsidizing these home buyers with over a billion dollars a month in tax incentives. FHA is $40 billion in the hole and taking on new mortgages with FICO scores as low as 560. Freddie Mac has published in September its default rate has hit 7.3% and still they keep doing the same insane lending. Isn't the definition of insanity doing the same mistake over and over but expecting a different result? When will this end.

Now comes the bad part of this news. If these mortgages default, and they will, it's not the banks that take it on the chin, its the federal government who will make up the difference. Guess where the government gets its money? From you and I. Remember those powers to tax and spend? Somewhere along the line our representatives reversed that to spend and tax.

Before you remember Obama's promise to make sure the rich pay for any new spending and deficits not middle class and you get complacent, you have to see how all these new salary and bonus controls will make sure there won't be any rich people to be taxed anymore. He has made sure we are all middle class now. Since the poor people don't pay taxes (they just receive low income tax credits) that just leaves you, me and all our middle class neighbors and friends.

Robin Hood has left Sherwood Forest and is now robbing the middle class from Washington and giving it to the poor in the forms of housing, food stamps, free lunches, health care and even cash for clunkers.

For you next year's tax return will be easy - how much money do you have left - attach a check for that amount and send it on in to the IRS.

Jim Van Meerten is an investor who write on financial matters here and on Financial Tides. Please leave a comment below or email FinancialTides@gmail.com.

Sell these 3 ETFs

I'm selling these 3 ETFs from my Financial Tides ETF portfolio on Martketocracy based on technical indicators from BarChart.

PFF - IShares US Preferred
PGX - ProShares Preferred
SMH - Semiconductor Holder

If you hold these ETFs in your portfolio please research them fully on BarChart.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email FinancialTides@gmail.com.

Disclosure: I hold no positions in these ETFs at the time of publication

3 stocks to consider

Here are 3 stock that I'm adding to my Financial Tides Alpha portfolio on Marketocracy. This are stocks with upward price momentum and are filtered for various other positive technical indicators on BarChart.

ALGN - Align Technology
AWI - Armstron World
AXT - AXT Inc.

Please review these stocks yourself on BarChart before adding to your portfolio.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email FinancialTides@gmail.com

Disclosure: I hold no positions in these stocks at the time of publication

Highly speculative picks

I am adding the following stocks to my Financial Tides VMSLO Marketocracy portfolio based on technical analysis indicators from BarChart. The portfolio is a continuation of the portfolio I used to win the Strategy Lab Open. These are stocks hitting new highs but trading less than 100K shares per day.

PTI - Patni Computer Systems
JW.A - John Wiley Sons
WSII - Waste Systems
CLCT - Collectors Universe

Remember that these are thinly traded stocks. If you add these to the speculative portion of your portfolio don't buy so many shares that you cannot get out in a timely manner.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email FinancialTides@gmail.com.
Disclosure: I do not hold any positions in these stocks at the time of publication

ASEI - American Science Engineering added to New High portfolio

On my Financial Tides New High portfolio on Marketocracy I've added ASEI - American Science Engineering based on technical analysis indicators frm BarChart.

Please research this stock completely on BarChart before adding to your portfolio.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email FinancialTides@gmail.com.

Disclosure: I do not hold any positions in ASEI at the time of this publication

S&P 600 portfolio additions

The following stocks have been added to Financial Tides S&P 600 portfolio on Marketocracy based on technical alalysis indicators from BarChart:

LNY -- Landry's Restaurants
PEET -- Peet's Coffee & Tea
GY -- GenCorp

Please completely research these stocks on BarChart before you add them to your portfolio.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email Financialtides@gmail.com

Disclosure : I hold no positions in these stocks at the time of publication

S&P 500 portfolio additions

On Financial Tides I added the following stocks to my S&P 500 portfolio on Marketocracy based on TA indicators on BarChart:

RX - IMS Health
EL - Estee Lauder
HRS - Harris Corp
BNI - Burlington Northern

Please look closely at these stocks on BarChart before adding to your portfolio.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email FinancialTides@gmail.com

Disclosure : I hold no position is these stock at the time of publication

S&P 400 portfolio additions

On Financial Tides I added the following stocks have been added to the S&P 400 Marketocracy portfolio:

EW -- Edwards Life Sciences
ACXM -- Acxiom Corp
SLH -- Solera Holdings
GPN -- Global Payments
ATK -- Alliant Techsystems

These stocks have been chosen on technical analysis reason on BarChart.com. Please look at these stock closely before adding to your portfolio.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email FinancialTides@gmail.com

Disclosure: I hold no positions in these stocks at the time of publication

Recession and the Butterfly Effect

This past weekend I watched a movie starring Ashton Kutcher called The Butterfly Effect. The main character finds that he can go back in time and by changing just one moment he can rewrite all the history from that point in time to the present. I started thinking what moment in time I would change to rewrite the history of this recession. I think the moment I would pick would be that moment when some analyst at Standard and Poor's decided to rate the toxic assets as AAA - Investment Grade instead of the B or C speculative grade it deserved.

That moment in time is when securities firms had the green light to begin selling all this junk to pension funds, trust companies, widows and orphans as sure thing investments and not bets at the crap tables. The floodgates were now open and Wall Street had access to billions if not trillions of dollars of conservative foundation, retirement, banking and insurance company assets that would not have been used to purchase this junk if they were rated as speculative instead of investment grade.

I'm still having a hard time figuring out if the ratings firms were just totally incompetent or an accomplice in the most massive fraud ever perpetrated on the American public. Bernie Madoff and Allan Standford are getting all the headlines and their prosecution makes a few people feel good but when does the investigation of these rating agencies start? The big fraud couldn't have happened without their investment grade ratings.

With all of the federal rules and regulations that have been broken, ignored or bended I think it's ironic that the only one who seems to care is Andrew Cuomo, the Attorney General of the State of New York. I was promised change and transparency if there was a new administration but it looks like Eric Holder our US Attorney General is still asleep at the wheel. Why isn't he taking the lead on investigating what happened and why?

I need answers and so do you. Were the rating agencies negligent or were they a part of the conspiracy. The real big question is why are we still letting them continue to rate investments after they gave us all such bad advice?

What moment in time would you change or do you think that it would have happened anyway?

Jim Van Meerten is an investor how writes on financial matters here and on Financial Tides. Please leave a comment below or email FinancialTides@gmail.com