August 16th, 2012

BTI Signal:  BULL- Caution

(BTI:  Bull or Bear Trend Indicator Signal)  YTD Gain: +15.51%

Long ½ QQQ per BTI Signal Executed on: July 7th open: @ $66.38)

 

 

August 16th 2012 –   Yesterday evening I was driving home from NYC stuck in traffic on the Interstate going five miles per hour in the steady drizzle rain.  I was crawling along I was passing right in front of the new Yankee stadium.  The size and Grand scale of it is awe inspiring and as I looked at it I was reminded of how much it looks like the Colosseum fromRome,Italy.

 

The next thing that came to mind is how our US Empire mimics that of the failedRoman Empire.  We were both kings of the world in our times and built these Colosseums for the masses of people to flock to for entertainment.  The elites and politicians then bragged how they built this grand stadium for their people to enjoy.  The sad part is that theUSand the world has not learned our lesson from the 2008 crisis, we just continue to borrow money like nothing is wrong and the good times will be returning.

 

I looked up some statistics and Yankee stadium cost 1.5 Billion dollars to build, but they used 1.6 Billion in Debt to pay for it!!  Can you believe that one?  On top of that the players are getting paid with 5 year contracts topping 100 Million dollars.   Now we see where all the mega dollars are going, it’s being directed into the entertainment industry.

 

The problem is that this is very eerily similar to the top of theRoman Empirebefore it collapsed.  TheRoman Empirehad to start diluting their gold coins to pay for things because they didn’t have enough tax revenue to continue to fund their empires.  Since they didn’t use paper money, the Romans just “thinned” down their coins to use less gold, silver, brass and bronze, but still gave them the same face value.  In modern times, Ben Bernanke can just print money to buy the fraudulent bonds being issued by the Treasury and keep the counterfeit scheme going on as long as the rest of the world accepts our fake dollars.  It has almost become a joke and the reason why Gold, Silver, Oil and many commodities have no where to go but up in the future.

 

The bad part about our situation is that theRoman Empirelasted 677 years, but the US Empire will be long gone before that time due to leverage and debt.  The entire government, nation and the citizens of this country are in debt up to their eyeballs, while the crushing global competition is squeezing the lifeblood out of our economies.  TheUSand Europe can not compete in manufacturing with Chinese,IndiaorMalaysia.  But the problem is we are left with a shell of an economy now with Real Estate, insurance and the financial industry as the last legs.  Now that the financial industry is under massive strain due to the extreme debt and collapsing Real Estate values that were used as collateral, we are starting to see the beginning of the end of our prosperity.

 

Those that do not prepare for this unavoidable collapse will be the most hurt and could stand to loose it all.  And this is the main reason I stress to continue to deleverage, invest wisely in a well balance diversified portfolio (as I have shown in my sample portfolio section) and trade only in the direction of the BTI Signal.  At this time we are riding some kind of bullish liquidity wave based on hope or QE money finding its way into the markets.  Either way we don’t question the reasons, we just watch the trends and follow along accordingly.

 

Our SLV trade is getting off to a good start.  It was just about even on the open so any subscribers who wanted to participate could also get in for almost a better price then I got in yesterday afternoon.  As of 3:31 SLV was up +1.56% while the S&P was only up +.84% and the Hot Nasdaq is up +1.23%.  Silver has no counterparty risk and is an actual commodity so that’s why I like this trade especially during this point in the market.  Besides the fact that the charts looked pretty good for a bullish move.

 

BTI SIGNAL —   The BTI Signal continues:  “BULL- Caution” mode.

We continue to hold our “Core” positions along with the additional QQQ Long ½ position.

 

** Any last minute Signal changes will be emailed to you by 7:30am the next morning.

 

GOLD/SILVER–   Gold and Silver started to make a move higher.  The Silver chart is definitely in Bull mode and we hope it continues to help out our long trade. Silver is now back into the 28-24 range so I’d like to see it move back over $30 once again where it should really be realize to other commodities like Oil trading at over $92./barrel.

 

The Silver trade I’m referring to is just a short term opportunity trade.  Longer term I definitely hold and keep accumulating Gold & Silver for our eventual currency crisis outcome.

 

MARKET RECAP–    Another positive close in the markets and this morning market commentators on CNBC were all talking about how the saying “Sell in May and go away” was a complete failure this year.  The dow now over 12% for the year and this is all the fuel the TV talking heads need to work themselves up into a giddy chatter about how this is exactly the reason you NEED to be invested in the markets.

 

Probably many traders are short or underinvested and this slow grind higher is also reminding them of the wall or worry the markets faced in 2009-2010 as everyone was expecting the crash back down and all we did was continue higher on stimulus and bailouts.

 

I guess in a way we do have a Ben Bernanke put under the markets.  Any substantial drop would be met with immediate and swift stimulus response as the Federal Reserve said they are now on standby to act incase the economy or the situation deteriorates.  A crashing stock market would impact the financial jobs/income, deteriorate public savings/retirement further, turn down sentiment even worse and probably send the country into a guaranteed depression.  So obviously Ben Bernanke does not want that to happen at any cost and the market probably senses it while they are slowly creeping back into equities from their shame of denial as they were expecting an equity melt down from the Euro Crisis.  By the way what did happen to the Euro crisis???  Very quite over there.  We will soon see in a few weeks if it really was swept under the rug or if the dragons head will once again re-emerge to breathe fire onto the markets.

 

Have a nice night and I’ll see you Saturday.  Like the previous weeks I’ll post Friday’s report by Saturday 12 noon.

 

Best regards

Karl

The Bull or Bear Report

 

 

MARKET RECAP   

 

Dow:  Up +85.33 (+.65%) to 13,250.11 (New signal from 8/7 per BTI “BULL-Caution”)

Transports:  Up +25.48 (+.50%) to 5,167.51  (Back over 5K.)

NASDAQ:  Up +31.46 (+1.04%) to 3,062.39

S&P 500: Up +9.98  (+.71%) to 1,415.51

Gold:  Dec Gold Up +11.50 (+.72%) to 1,616.70 (as of 4:30 pm EST.)

Silver:  Sept Silver Up +.389 (+1.40%) to 28.126 (as of 4:30 pm EST)  Below trading range of 28-35.

US Dollar Index:  Down -.266 (-.32%) to 82.445

Crude Oil Futures:  August Crude Up +.89 (+.94%) to 95.22/barrel  (as of 5:00 pm)   Creeping back to $100!

Advancers Beat Decliners  on the NYSE by:  2,163 adv. to 840 decl.

 

Our Recommended Popular Holdings

 

QQQ  Up +.76 (+1.13%) to 67.98 as of 4:30pm  (BULL Caution- New BTI Signal)

IYM   Up +.94 (+1.42%)  to 66.93

MOO Up +.66 (+1.32%) to 50.79  (A BUY OVER $50.35)

GDX  Up +1.38 (+3.13%) to 45.53

SIL  Up +.59 (+3.09%) to 19.70  (diversified way to own the Silver miners.)

GLD  Up +.90 (+.58%) to 156.53  (or you can substitute with:  SGOL)

 

CVY   Up +.17 to 22.42  (start of year 20.73)

Div Yield 5.03%,  YTD ETF performance: +8.15% (+ dividend yield)

 

Extra Suggestions:

Ebay:  I sold out at slight loss due to breach of my entry rule. Target:  $50-80  in 6-18 months.

I will continue to watch this for future.  Today -.04 on an UP QQQ day.  Not good again.

SilverWheaton:  Made a big up-move today.  If you own SIL this will be in there.

 

SLV (Silver Trade)

Long SLV at $27.05 and just for this “trading” position I am using a stop.  I will be using a close Under $26.58 as my stop level.  So only if we “close” under $26.58 I will close out this trade.

Exit Strategy:

If we move higher, I will have two target levels to sell part of the position.

Target 1: $27.62 sell  ½ and move stop to original Entry for free trade.

Target 2: $28.32 sell ¼ position.

Balance will keep with trailing stop as it moves higher.

(I will post the changes here on this trade as it proceeds)

 

MSB, BGCP, TAL (high debt but stable shipping transport business) riskier,

* FDL (First Trust Morningstar Dividend Leaders Index ETF) yields 3.5% from Blue Chip large caps.  Good to buy AFTER major market corrections.  Very conservative income generator.

 

Permanent Portfolio (PRPFX)  previous close 47.35    YTD Gain: +2.93%  (Jan 1st price: $46.00)

(PRPFX is a well diversified holding fund.  Has stocks, bonds, Gold, Silver, etc…)  Great place to conservatively put retirement funds or to park cash Long Term.  The only issue I have with this is theUSgovernment Bond Allocation of the fund.

 

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