Interest Rates

So it looks like interest rates may either plateau or go down given the latest comments from Ben Bernanke.  I'm hoping the stay low, of course for obvious reasons, I'm buying a house at the moment.  Regardless though, it helps the smaller investor to have low rates because bank loans are easier to get if you have good credit.  Even though there are positive signs in the economy it's not time yet to raise rates (personally, I don't think it's ever a good time).

Bernanke basically said that he doesn't have any intention on raising the rate in the near future which basically translates into the rest of the year.  Hopefully with this news we will see a continued rise in home sales and there will be revenue for those investing in the housing industry, which by the way is my index of choice right now.  This will also translate into good news for those wanting to buy cars because car loans will be cheaper.  So in effect this is an all around good indicator for the economy.

Market update 8-2-12

Cramer said exactly what I said in his show yesterday.  He said that in times like these the best stocks to look at are those with high dividend yields.   So we had our first of three big market movers yesterday.  Ben Bernanke made his statements and the market fell off after he spoke.  I saw WMT take a dive to lower levels and then start to head back up so I took a position.  Hopefully there will be an early morning run and I will get out after I hit my profit target today.  I don’t want to be in this position tomorrow waiting for the jobs report.  Today’s announcements are happening right now with the ECB making statements. 

Market Update 7-18-12

Yesterday was a bit choppy but I was able to make a nice run on Walmart again.  When Bernanke started talking and not saying anything about QE3 the market tanked and went back to a support level.  I watched Walmart until it got really oversold and then I knew that it had fallen too far.  Walmart is too strong a stock to stay down for any length of time so went in after I saw some green candlesticks which showed that the stock had strength.  I waited till it got back up close to its new highs and took profits.  

I got into Dunkin Donuts as I saw it swing up but I didn’t make it high enough to make it to my profit margin.  That was a bad move because it fell back and never regained its strength.  JP Morgan downgraded it so some of its energy had been sucked out.  Hopefully it will rebound off of the moving average today.  The 15, 30 and 60 minute charts all have it right at either the 20 or 100 period moving average.  Let’s hope it bounces back.

After watching Cramer’s picks from yesterday I’m looking at FUN and MCD.  I’m more partial to MCD because it is a major brand name and the trade volume will be there.  MCD made an inverted head and shoulders and just moved ahead of a resistance level.  It has also pulled back to the moving average on a couple charts.  Cramer also mentioned one of his analysts said he has a $97 price target giving us about 6 more points to run. I ran it through my stock valuation calculator and I have at least a 95 price target. I think MCD is about to pop.  I may get into it today if I see strength (that’s if Walmart doesn’t break its highs).

Market Update 7-17-12

Ben Bernanke is speaking now in front of Congress.  It is a good idea to wait on mornings like this and let the news comes out before getting into the market.  However I went against better judgment when I saw that Dunkin Donuts was way off the highs it hit yesterday.  The guidance had been lifted and it was looking attractive at these levels.  Dunkin has a lot of strength behind it much like Walmart had a few days ago.  

Walmart is looking attractive at these low levels as well but the strength is not there and it is at all time highs.  I may hold off for lower levels.  

We are seeing a lot of selling going on in the markets and today may be a good day for some bargains.  Let things play out a little bit and then think about getting in after the mayhem is over.

Market Update 7-16-12

There is a lot of uncertainty in the markets for tomorrow’s session.  Earnings are still coming out and Bernanke’s going to speak this week.  The market had a strong rally on Friday so look for a pullback tomorrow but truth be told, the market could go in any direction this week.  I’m going to stay out for the first hour to let things develop.  When the market is reacting off news its best to stick to fundamentals, play the pullbacks on a percentage basis and time your entries off Bollinger Bands, moving averages and stochastics, but make sure you are out of your position before any news announcements.

I’m still looking at Walmart but I’m a bit cautious now that it’s pushing up to the analyst target of $79.  The value of the company may be priced in at this point in the current market conditions.  On the other hand Warren Buffet increased his position in Walmart so he may know more than everyone else. 

Market Update 7-11-12

The vibe of the market has changed.  There’s been a lot of analysts beating the drum for a bear market.  Thoughts do become reality and when you have a lot of analysts and commentators talking about a bear market they are in effect creating it.  That said you can create your own market conditions if you follow trends and the technical setups.  Yesterday’s craziness was the release of a lot of pent up anxiety about the market selling off to a support level.  People are now waiting for some encouragement from earnings numbers this week and the Fed minutes that come out at 2pm today.  

Some of the best plays to make during times of anxiety are in companies that provide comfort and these are companies that sell guns, cigarettes, candy, sweets, ice cream and cheap household items.  My conscience keeps me from buying guns and cigarettes but ice cream, sweets and cheap household items are stocks I’m looking at (WMT, DNKN, TGT, DG).