Wednesday, July 11, 2012


The Federal Reserve reported consumer credit outstanding as of the end of May. Great news. Consumers added $17.1 billion of new debt to their balance sheets and now owe a record $2.573 Trillion. Whatever happened to that deleveraging storyline being pushed by the MSM? It was a load of crap from the get go. Here is the link to the Fed report:

Here are my observations:

  • It seems non-revolving credit for autos and student loans jumped $9.1 billion in one month. It seems 70% of this increase was directly from the Federal government, meaning YOU made the loans to subprime students and subprime auto buyers in West Philly. Based on my observations, they are leaning towards Cadillac Escalades with your money. When the student loan bubble and subprime auto loan bubble burst you’ll be on the hook – AGAIN.
  • The really interesting data point was credit card debt surging by $8 billion to the highest level since 2010. This debt is 70% attributable to the Wall Street criminal cabal. Something doesn’t really add up. Gasoline prices were plunging in May. The consumer should have had more disposable income. But we know for a fact that retail sales sucked in May and June. So, why would credit card debt surge? Here is why:

      • 1.2 million people have fallen off the 99 week unemployment rolls and are now trying to survive on their credit cards.
      • The few jobs that have been added are part-time crap jobs with no benefits and people are using credit cards to try and make up the lost income.
      • The 8 million people that have “voluntarily” left the workforce may have left too soon and are enjoying their leisure time on their credit cards.

We have entered a recession, food prices are rising, real wages are dropping, and job losses are mounting. Surging credit card, student loan, and auto loan debt at the outset of recession is surely a good sign. The Wall Street banks sure look smart having reduced their loan loss reserves for the last two years. No bad debt on the horizon – right Jaime?

Autodesk, Inc. (NasdaqGS: ADSK)

Autodesk, Inc. provides design software and services to customers worldwide. Its Platform Solutions and Emerging Business segment offers AutoCAD software, a customizable and extensible computer-aided design application for professional design, drafting, detailing, and visualization in fields ranging from construction to manufacturing, civil engineering, and process plant design. The company's Architecture, Engineering and Construction segment offers Autodesk Revit products, which provide model-based design and documentation system for architects, structural engineers, and design-build teams, as well as mechanical, electrical, and plumbing engineers. The Manufacturing segment's products comprise Autodesk Inventor, which offers engineers a set of tools for 3D mechanical design, simulation, analysis, tooling, visualization, and documentation. Its Media and Entertainment segment offers animation products that provide tools for digital sculpting, modeling, animation, effects, rendering, and compositing; and creative finishing products that provide editing, finishing, and visual effects design and color grading.

Please take a look at the 1 yr. chart of ADSK (Autodesk, Inc.) that I have shown below with my added notations:

ADSK had formed a nice up-trending Channel over the last (2) months. A Channel is simply formed through the combination of a trend line support that runs parallel to a trend line resistance. Any (3) points can start a Channel, but it's the 4th test and beyond that confirm it. You can see that ADSK had (9) separate test points between the Channel resistance (red) and Channel support (blue). Yesterday the stock broke its Channel support, should be moving lower overall, and will probably make its way down to the key $30 level (green).

The Tale of the Tape: ADSK broke its Channel support and should be moving lower. A short trade could be entered on any rally up to the old Channel support that currently sits near $33 and should now become resistance. A long trade might also be made if the stock falls to the $30 level.

Why The Economic Crash never happened - by Stefan Molyneux

It's about power not money. They ultimately want a resource-based socialistic society. The technology today makes this possible. The irresponsible , unpayable deficit USA has now was no accident. It's all about transfer of power from the citizen's hands to the govt. Who has the purchasing power has the power. They have us eating from the palm of their hands in our welfare economy. It'll only get worse. Put your faith in something greater than crooked politics. All happened because of masses greed and their need to live above their means, wasting money on pointless stuff, wars, etc. Its payback time, and now uncle Sam doesnt look as powerful and rich as he would like, and uncle Sam's children (all 310 million) will realize that they're not living in a country that is the center of the world (like they were taught since they were born), but in fact they are living in a big tower made of cards, just waiting to collapse.A perfect timing of the economic collapse to declare a new world order, this whole process has been carefully planned out throughout decades. Once they declare it, it will seem like the only way out.... Be prepared people!!! big changes to come soon.How to prepare? buy commodities such as gold and land, they will ALWAYS be worth something more than a piece of paper with numbers on them . Take all your money out of the banks . Pay with only cash and keep your cash at home. If we all did this, they would have no other choice but to Regulate, Tax and Legalize Marijuana. The government is only concerned about money, anyways. We have the power, we just need to use it. We will never make this happen if we only bitch about it. Take back your power by taking out your money.

A Trader's Guide to 2012 and Beyond...

Traders can look at seasonal charts to get a roadmap of what the future might look like. The idea behind seasonals is that similar patterns unfold over the course of a year in some markets. Charts can be created by averaging the price action that occurred in a certain month or week in the past. The average action is then shown as a line which shows both the trend and the strength of the price moves in the past.

Seasonal tendencies were first noticed in the grain markets, and corn is used as an example in the chart below. Corn prices have a tendency to peak in June and then fall sharply into September. This pattern does not unfold precisely in every year, but it does work more than 60% of the time. Five completed cycles are shown in the chart below and corn fell over the summer months in four of those five years.

Many traders believe that seasonal cycles should be visible in agricultural markets since planting and harvest times are dictated by the calendar. In corn, the most visible seasonal trend is the decline of prices from the summer into the fall harvest period. Crop conditions are generally uncertain until July when farmers begin to get a clear idea of how the corn is growing. As uncertainty over the yield decreases, prices tend to drop. This drop continues as the grain starts coming to market after harvest. When the crop is finally harvested, prices start moving higher as the supply is used up.

While there is a logical reason behind this cycle in the grain markets, there is no obvious reason why seasonal tendencies should exist in the stock market. But the seasonal chart of SPDR S&P 500 ETF (SPY) shows that the same type of cycle does exist in stocks. From the chart, we can see that there is a high in May and a low in September. This chart illustrates that the Wall Street saying “sell in May and go away” can be used as a profitable rule.

Seasonal charts are a useful trading tool. We can use this type of a seasonal chart to create a roadmap of what the market action could look line in the future. The weekly chart of SPY is shown below. The seasonal trend has been overlaid on price to make the comparison easier to see. Weekly data also offers more detail than the monthly charts used above.

The seasonal patterns in SPY points to a summer sell off. Other, more traditional technical indicators, like stochastics and MACD on the monthly chart, confirm the bearish outlook for SPY.

Traders can take advantage of the seasonal tendencies to establish short positions in stocks. For those looking at potential long trades, the seasonal charts are bullish for gold. This trade sounds especially appealing if there is any more bad news out of Europe. While the debt crisis has been put on hold for at least a week there, chances are high that Europe will once again be in the news and eventually the crisis will spread. If this happens, short stocks/long gold should prove to be a good trade.

Toro Company Issues Buy Signal: TTC under heavy accumulation for past six months

The Toro Company (NYSE:TTC) – This company is a household name when it comes to small engine equipment. It also designs, manufactures and markets turf maintenance equipment, irrigation systems, landscaping, lighting and snow removal products. It was recently recommended by Zacks as a beneficiary of a growing need for its products from emerging nations including India and China. And it was also on my Top Stocks to Buy for July.

Earnings are expected to reach $2.52 in FY 2013 (ended Oct. 31) versus $2.17 in FY 2012. It has a dividend yield of a little over 1%.

Technically TTC broke from a classic cup-and-handle formation in February following a double-bottom last year. In late June, the stochastic issued a buy signal, and it has been under heavy accumulation for the past six months.

Buy TTC at the market with a trading target of $45-plus. For investors, this stock has the characteristics of a long-term hold. Toro had a 2/1 split effective July 2.

TTC Chart

The Chart Every Trader Should Watch

Regular Stansberry & Associates readers know that China is at the center of a huge debate.
Some very smart people – like master short-seller Jim Chanos and top hedge-fund manager Hugh Hendry – say the country is a powder keg of government-directed malinvestment.
On the other hand, you have the China optimists, like popular investor Jim Rogers. He and other China bulls say these fears are overhyped and overblown.
As traders, we're keeping a close eye on this debate. China is the world's workshop... and its largest consumer of commodities. If China has a big problem, the whole global asset market has a problem.

And it looks like the whole global asset market might have a problem...
When China bears make their arguments, they point to the hundreds of billions of dollars China has spent on unused infrastructure projects and real estate developments.
They also point to China's trillion-dollar-plus "shadow banking" sector. This "shadow banking" sector goes unreported in government numbers... But bears say it helps mask a giant amount of bad loans in China. They say it's "the Next Subprime."
And right now, they're pointing to the Shanghai Composite Index...
The Shanghai Index tracks the biggest and most important public companies in China. You can think of it as the "Dow Industrials of China."
As you can see in the 18-month chart below, the Shanghai Index suffered a big decline in late 2011. The index fell from a high of around 3,000 to a low of around 2,200 (a 26% drop). Then, early this year, it attempted to rally off its lows.
But as you can see from the right side of the chart, this rally has failed. After trying to break out to the upside in May, the Shanghai Index has fallen apart... It's now close to breaching its yearly low.

As always, we say, "Understand both sides of the debate... but always mind the market. The market is the judge, jury, and executioner of all ideas."
The market, in this case, is starting to side with the bears. Should the Shanghai Index continue to break down, it's a sign caution should rule your financial decisions.
As always, we say, "Understand both sides of the debate... but always mind the market. The market is the judge, jury, and executioner of all ideas."
The market, in this case, is starting to side with the bears. Should the Shanghai Index continue to break down, it's a sign caution should rule your financial decisions.

Chart of the Day - Extra Storage Space (EXR)

The "Chart of the Day" is Extra Storage Space (EXR), which showed up on Monday's Barchart "All-Time High" list. Extra Storage Space on Monday posted a new all-time high of $31.21 and closed +0.55%. TrendSpotter turned Long on June 29 at $30.60. Extra Storage Space, with a market cap of $3.2 billion, is a real estate investment trust that acquires, develops and operates self-storage facilities.