tag:www.johnmugarian.com,2008://1 2008-08-18T19:06:56Z John Mugarian's Dynamic Growth is a website geared for investors looking to safely grow their money with sector mutual funds and ETFs. Movable Type 3.33 tag:www.johnmugarian.com,2008://1.1166 2008-08-18T14:13:59Z 2008-08-18T19:06:56Z

Bullish signs? Not according to Warren Buffett! Based on the drop in oil and commodity prices, we can assume the CPI (inflation) numbers will begin to show less inflation. Right? I would be real quick to make that assumption. Inflationary...

John Mugarian http://www.johnmugarian.com/ Here are our Top 10 ETF's for the week of August 18th: 1) DBA: Powershares DB Agriculture Fund- .323 2) EWZ: Brazil Index- .310 3) SLX: Market Vectors Steel Index Fund- .293 4) FXF: Currency Shares Swiss Franc Trust- .250 5) EEB: Claymore ETF BNY BRIC- .225 6) DDM: Ultra Dow 30 Proshares ETF- Not Rated 7) DUG: Ultrashort Oil & Gas Proshares- Not Rated 8) PGJ: PS Golden Dragon China Fund- .112 9) KBE: KBW Bank ETF- Not Rated 10) IYF: iShares Dow Jones US Financial Sector- Not Rated Here are our Top 10 Fidelity Sector Funds for August 2008 1) FSCHX: Chemicals 2) FSMEX: Medical Equipment 3) FSCGX: Industrial Equipment 4) FCYIX: Industrials 5) FSPTX: Technology Portfolio 6) FSCSX: Computers & Software 7) FSCPX: Consumer Discretionary 8) FWRLX- Wireless 9) FSRBX: Banking 10) FSVLX: Home Finance NEW BUYS: None NEW SELLS: None Honorable Mention (Holds): None The Week in Review: The U.S. New World Order gang is mad at Russia for taking military action in Georgia. Subconsciously they must be saying, "hey, only we can do things like that!". I wonder if the U.S. response would have been different if oil and a pipeline wasn't involved? Could the politicians be upset that British Petroleum (BP) owns 30% of the BTC pipeline that runs from Azerbaijan through Georgia, and into a terminal on the Mediterranean Sea? I would think so since BP said the pipeline will remain shut indefinitely. Today's focus is on Tropical Storm "Fay". I don't know what all the fuss is about. Fay will not come anywhere near the oil platforms in the Gulf. It has however interrupted the slant drilling the Chinese are doing off the coast of Cuba. Last week, five major banks agreed to buy back billions of dollars in auction-rate securities as part of a settlement with regulators. The economic lies reported to the American public is finally being confirmed. In particular, the so called "benign CPI number" came in hotter than a firecracker. Consumer prices rose 0.8% in July, the fastest rate in 17 years. In addition, import prices are up 21.6% from July 2007. The calls of a housing bottom earlier this year also turned out to be a fib. According to the National Association of Realtors, existing home sales (single family and condos) fell 16% to a 10-year low. Oddly, sales of foreclosures and short sales accounted for one-third of all existing home sales. If oil prices continue to decline, the economy has a good chance of rebounding. I think that $75-$85/ barrel oil would reignite the economy pretty rapidly.]]> For the Week: Last week, a day after the SEC's July ban on naked short sales ended. the financial sector nosedived. Free markets? What a joke! INDU :11,659.90/ -74.42 SPX : 1,298.20/ +1.88 COMP: 2452.52/ +38.42 -Gold closed at $792.10/oz -72.70 for the week. Last week gold closed at $864.80, and was trading at $917.50 two weeks ago. As the U.S. Dollar Index gained, gold sold-off. -The Commodities CRB Index closed at 382.30, down from 387.42 last week, and down from 416.02 two weeks ago. -Crude Oil closed at $113.94/bbl down from $115.20 last week, and down from $125.10 two weeks ago.. We need to see $75-$85/ barrel oil in the weeks ahead to get the economy back on track. Oil has remained above $100 for nineteen consecutive weeks. -The U.S. Dollar closed at 77.15 up from 75.86 last week, and up from 73.44 two weeks ago. Some believe the rate cuts have come to an end, and the dollar is attempting to rally. A strong rally in the dollar will help drive energy prices lower. We raised our allocations last week by 5% across the board when the DJIA dropped below our 11,300 target. Going forward, the next 5% increase will come at DJIA 10,600 for Aggressive, and Moderately Aggressive portfolios, but Moderate, Moderately Conservative, and Conservative investors are not advised to get fully invested unless the DJIA breaks below the 10,000 mark. Our current asset allocation is as follows; 75% Equities: (Normally 95%) Aggressive 65% Equities: (Normally 80%) Moderately Aggressive 55% Equities: (Normally 60%) Moderate 35% Equities: (Normally 40%) Moderately Conservative 15% Equities: (Normally 20%) Conservative]]> tag:www.johnmugarian.com,2008://1.1165 2008-08-13T16:34:52Z 2008-08-13T17:41:26Z

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey Oil prices rose slightly this morning to $114/bbl after the EIA reported declines in its latest fuel inventories. Given...

John Mugarian http://www.johnmugarian.com/ "You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey Oil prices rose slightly this morning to $114/bbl after the EIA reported declines in its latest fuel inventories. Given this news, and the conflict between Georgia and Russia, we have to ask why isn't the reaction more bullish for oil? 1) The U.S. dollar continues to gain strength versus the Euro, Yen and British pound. The latest news from the European Central Bank suggests the next move in rates in Europe will be to cut. The slowdown in the European economy is making Jean-Claude Trichet re-think his strategy. 2) The Georgian/ Russian situation will cool down. The executive branch of the US government was up in arms over Russia's military actions in Georgia. Were they upset over military action and the killing of hundreds of citizens? No way! They were upset over a potential ramifications of the global oil supply. It so happens that the second longest oil pipeline in the world (Baku-Tbilisi-Ceyhan (BTC) pipeline) carries oil from Azerbaijan, through Georgia and Turkey to a terminal on the Mediterranean Sea. If there was no potential oil disruptions in the region, we probably wouldn't hear a peep out of the executive branch. 3) China will continue to have reduced oil demand until the end of the Olympic games. See, to put their best face forward China is trying to reign in their incredible pollution (smog) problem by ordering 45 percent of Beijing's 3.29 million cars off the roads. In addition, several industrial plants around Beijing have temporarily shutdown. 4) Some demand destruction has taken place in the US as consumers continue to adjust what they drive, and when they drive. 5) Don't forget the election year magic that I keep referring to. Politicians like to pullout all the stops before an important election. Yes, this includes getting their friends to help push oil prices lower. As we get closer to the end of Olympics and November elections, I'll be re-visiting the oil trade. The Rest of the Story Don't you find it odd that the rally in the financials ended yesterday, just as the SEC ban on a certain kind of short-selling expired. The ban on short-selling took effect July 21 to prevent stock manipulation. I guess its ok to continue the manipulation again. Free markets? What a joke!]]> tag:www.johnmugarian.com,2008://1.1164 2008-08-12T20:50:38Z 2008-08-12T21:51:33Z

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey The stock market came under pressure today after JP Morgan said it would write down mortgage-backed assets totaling $1.5...

John Mugarian http://www.johnmugarian.com/ "You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey The stock market came under pressure today after JP Morgan said it would write down mortgage-backed assets totaling $1.5 billion. In addition, Goldman Sachs fell after analysts said a slowing economy would hamper earnings. The dollar rose to a 5 1/2 month high against the Euro leading to a further drop in oil prices. In addition, Russia called off military operations in Georgia. On the subject of the Georgia-Russian situation, I had to laugh when our fearless leaders told Russia to halt their "aggression", and leave Georgia alone. Even the NWO's presidential mouthpieces, John McCain, and Barack Obama called for a cease-fire. Isn't it amazing that in the rest of the world the press knows that Georgia initiated the violence that killed Russian peace-keepers and hundreds of civilians in South Ossetia. By the way, the Russian peace-keepers were in the country with the permission of the Georgian government. And if our idiotic politicians want to debated initiating violence, and fighting a war that has no defined enemy, they should look no further than Iraq and Afghanistan. At least in Russia's case Georgia violated its agreement with Russia by attacking South Ossetia, and killed Russian peace-keepers in the process. What's really strange is the Russians claim that the war in Georgia was orchestrated by the US. As I dug into the situation a little I found that the U.S. government was involved. Keeping an eye on Wall Street is tough enough, but when you have to keep an eye on Washington too, things can get exhausting. As we head closer to the election, I have a prediction to make. If Barrack Obama is elected president, he will not end the war in Iraq, and our troops will remain. So, I believe those voting for Obama thinking he will end the war will be very disappointed. I will not waste my time predicting what John McCain will do. I think that is obvious. Oh, by the way, Congressman Ron Paul said he believes that House Congressional Resolution 362 paves the way for a military strike against Iran. Paul said, “The frightening thing is they say they are taking no options off the table, even nuclear first strike,” “That is my sense because the Democratic leaders in the House are proposing no resistance whatsoever, “We saw this when a supplemental bill came up and the president asked for $107 billion for the war, the Democrat leadership gave them $162 billion. “It is still totally bewildering to me when I see men and women in the Congress that I know and like doing this just to get along. Most of them will say ‘I agree with you on all you say but the Iranians are bad people and they might attack us some day. . . . I hear members of Congress saying if we could only nuke them.’” Stay tuned a the oil trade during September-October time frame. I beginning to warm up to the idea. ]]> tag:www.johnmugarian.com,2008://1.1163 2008-08-10T21:26:57Z 2008-08-12T01:46:24Z

The financial media can lose you a lot of money. In mid to late 2007 they were touting the "Goldilocks" economy, and a few short months ago you were hearing how Gold was going to $1600 an ounce, Brazil, Russia,...

John Mugarian http://www.johnmugarian.com/ In November, an unsuspecting electorate will choose between two candidates that follow the rules of the game that have been predetermined by these organized groups. Our job is not to change the status quo. This we cannot do. Our job is to predict what they will do next. Those of us who seek financial independence are in a constant battle with the financial interests of Wall Street bankers and their corporate friends whose purpose is to bog us down with debt, and to maintain their economic power over the little guy. If you understand the rules of the game, use some common sense, you can side-step a lot of land mines. I will do my best to help. Dynamic Growth: ETF Portfolio NEW BUYS: None NEW SELLS: None Here are our Top 10 ETF's for the week of August 12th: 1) DBA: Powershares DB Agriculture Fund- .255 2) EWZ: Brazil Index- .295 3) SLX: Market Vectors Steel Index Fund- .285 4) FXF: Currency Shares Swiss Franc Trust- .250 5) EEB: Claymore ETF BNY BRIC- .234 6) DDM: Ultra Dow 30 Proshares ETF- Not Rated 7) DUG: Ultrashort Oil & Gas Proshares- Not Rated 8) PGJ: PS Golden Dragon China Fund- .112 9) KBE: KBW Bank ETF- Not Rated 10) IYF: iShares Dow Jones US Financial Sector- Not Rated Here are our Top 10 Fidelity Sector Funds for August 2008 1) FSCHX: Chemicals 2) FSMEX: Medical Equipment 3) FSCGX: Industrial Equipment 4) FCYIX: Industrials 5) FSPTX: Technology Portfolio 6) FSCSX: Computers & Software 7) FSCPX: Consumer Discretionary 8) FWRLX- Wireless 9) FSRBX: Banking 10) FSVLX: Home Finance NEW BUYS: None NEW SELLS: None Honorable Mention (Holds): None The Week in Review: Over the past 30 days the big story has been the drop in oil and commodity prices. I am not sure if the drop in oil is for real, or manufactured because of the election and the Olympics in Beijing. Right now, I have my doubts that oil prices are dropping due to sustainable demand destruction. Here are a few thoughts on the subject; 1) The drop in oil prices could be due to fears a democratic candidate would aggressively pursue new alternatives for energy over the long term. These alternatives would be wind, solar, nuclear, and fuel cell technology. 2) The drop in oil prices could be due to temporary measures taken by the Chinese to reduce industrial pollution by 70% during the Olympics. If this is the main reason for falling oil prices, we need to view the sell-off as a correction, and not a longer term trend. 3) The drop in oil prices could be due to temporary measures taken by the interventionists prior to an important presidential election. 4) Here in the U.S., we are being told that the drop in oil prices is due to "demand destruction". While I believe consumers are using less gasoline, I don't buy this as the real reason for falling oil prices. Here is what I believe. Oil is a product that can control the lives of large masses of people. Henry Kissinger has been quoted saying; "Control the oil and you control entire nations; control the food and you control the people." Oddly, the world is experiencing higher oil prices, and worldwide food shortages. Makes you think, doesn't it? Every 10-15 we have an oil crisis that ratchets up the price of gasoline to a new level. When oil and gas prices shoot up to a new level that creates a panic, eventually prices settle in at a new and higher level that consumers can afford. Recently gas prices hit over $4.00/ gallon which was viewed as extreme. If gas prices eventually settle in at $2.50/ gallon, consumers would see this as welcomed relief, and the oil gang would achieve their goal of higher levels for the price gas. If oil prices drop to a price (but at a higher level) that becomes affordable for consumers, all the alternative energy solutions will be abandoned as they were in the past. But, if the growth in China and India are for real, and China revives their massive growth after the Olympics, then oil and commodity prices are heading higher. For now, enjoy the rally. We will have a clearer view on the markets after the Olympics and the November elections.]]> For the Week: INDU :11,734.32/ +408.00 SPX : 1,296.32/ +36.01 COMP: 2414.10/ +103.14 The stock market received good news from falling oil and commodity prices, and the Fed's decision to keep interest rates at current levels. -Gold closed at $864.80/oz -52.70 for the week. Last week gold closed at $917.50, and was trading at $936.90 two weeks ago. -The Commodities CRB Index closed at 387.42, down from 416.02 last week, and down from 412.22 two weeks ago. -Crude Oil closed at $115.20/bbl down from $125.10 last week, and down from $123.26 two weeks ago.. We need to see $75-$85/ barrel oil in the weeks ahead to get the economy back on track. Oil has remained above $100 for nineteen consecutive weeks. -The U.S. Dollar closed at 75.86 up from 73.44 last week, and up from 72.85 two weeks ago. Some believe the rate cuts have come to an end, and the dollar is attempting to rally. A strong rally in the dollar will help drive energy prices lower. We raised our allocations last week by 5% across the board when the DJIA dropped below our 11,300 target. Going forward, the next 5% increase will come at DJIA 10,600 for Aggressive, and Moderately Aggressive portfolios, but Moderate, Moderately Conservative, and Conservative investors are not advised to get fully invested unless the DJIA breaks below the 10,000 mark. Our current asset allocation is as follows; 75% Equities: (Normally 95%) Aggressive 65% Equities: (Normally 80%) Moderately Aggressive 55% Equities: (Normally 60%) Moderate 35% Equities: (Normally 40%) Moderately Conservative 15% Equities: (Normally 20%) Conservative]]> tag:www.johnmugarian.com,2008://1.1162 2008-08-06T16:59:57Z 2008-08-06T18:10:36Z

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey All of the views from our cat-bird seat tells me the U.S. has been in recession since late 2007....

John Mugarian http://www.johnmugarian.com/ "You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey All of the views from our cat-bird seat tells me the U.S. has been in recession since late 2007. Since many of the economic numbers jammed down our throats insults our intelligence, we go by what is happening to the everyday person on the street. In short, now that the "big hat, no cattle" consumer can no longer spend home equity money on things they do not need, the U.S. economic slowdown is beginning to affect the rest of the world economies. GDP growth in the second quarter came as a result of the one-time Federal income tax rebates, but the quarterly unemployment rate continues to rise, As it stands, the unemployment rate is now at 5.7%, and is projected to rise to 6.1% by the end of the year. The good news is the stock market will anticipate an economic recovery 3-6 months before the recession ends. By mid-2009, I anticipate a recovery will occur if energy prices continue to decline. If not, the economic downturn will be much more painful since the Feds next move will be to raise interest rates to protect the dollar, and drive energy prices lower. My hope is energy prices will lead to a recovery, and the Fed will not have to force the issue. Yesterday's Fed meeting was a waste of time. Everyone knew rates were going to remain unchanged, and the policy statement was consistent with the comments Bernanke made in his Monetary Policy Report testimony in July. On the oil front, its amazing to see how much perception can change in less than a month. Over the July 4th holiday, consumers were being raped at the pumps because of some concocted excuse (supply/demand, Iran, Nigeria, or anything else they could concoct). Today, and even a day ago when a tropical storm was heading toward the shipping ports in Houston, oil prices were dropping like a rock. Currently, oil prices are down almost $30/bbl in about 23 days. The thing that really disappoints me is how much we little people are manipulated and led around by our noses. We have a wonderful country with millions of wonderful people, but just like the movie "Mr. Smith Goes to Washington (1939)", we are held hostage by politicians who do not serve our best interests. If you haven't seen the movie- here it is- Movie I don't like to be Pollyanna when it comes money, and I am concerned that the recent drop in oil prices is due in part to election year manipulation. The other (temporary?) factor driving prices lower is the Chinese governments order to reduce industrial pollution by 70% before the Olympics. The steps they have taken are extreme, and ordering 45 percent of Beijing's 3.29 million cars off the roads to cure the pollution problem has to be looked at as temporary. Once the Olympics and election are over, we will see if the drop in oil prices were prearranged, a ploy, a con job, or for real. ]]> tag:www.johnmugarian.com,2008://1.1161 2008-08-05T15:47:15Z 2008-08-05T17:21:15Z

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey Don't you love "election year magic?". Oil and commodity prices are falling, and today the SEC has extended its...

John Mugarian http://www.johnmugarian.com/ "You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey Don't you love "election year magic?". Oil and commodity prices are falling, and today the SEC has extended its emergency order prohibiting naked short selling until August 12th. The stocks protected from naked short selling are as follows; BNPQF- BNP PARIBAS BNPQY- BNP PARIBAS ADR BAC- Bank of America BCS- Barclays C- Citigroup CS- Credit Suisse DSECY- DAIWA SECURITIES DB- Deutsche Bank AZ- Allianz GS- Goldman Sachs RBS- Royal Bank of Scotland HBC- HSBC Holdings BSI- Blue Square Israel JPM- JPMorgan Chase LEH- Lehman Brothers MER- Merrill Lynch MFG- Mizuho Financial MS- Morgan Stanley UBS- UBS FRE- Freddie Mac FNM- Fannie Mae I'm just curious. What qualifications must a stock have to be placed on this protected list by the SEC? Why isn't naked short selling outlawed across the board? Why does the SEC have to extend an order for an illegal action if naked short selling is truly illegal? If oil and commodity prices continue to fall, and are falling for reasons other than election year manipulation, the Fed will not have to worry about the inflation problem for much longer. If energy prices stay down after the election, the Fed will not have to be in any hurry to hike interest rates. This would be great news for us, and the stock market. Our oil and gas short has worked beautifully. We added the (DUG) Ultrashort Oil & Gas Proshares to the DG portfolio on May 23 at $27.85/ share. The fund is trading near $39.00 giving us an unrealized gain of 40% or $11.15 points on the upside. For those of you who follow my picks on Tipstraders.com, for some reason the website sold my DUG position without me knowing about it. I plan to hold the DUG shares into September unless I feel oil prices are set to rise again. Here is a rundown of our other holding in the ETF portfolio; DBA: Powershares DB Agriculture Fund- Cost Basis: $34.77/ 1-24-08 Cur.Px: $34.26 EWZ: Brazil Index- Cost Basis: $65.01/ 11-19-07 Cur.Px: $76.00 SLX: Market Vectors Steel Index- Cost Basis: $77.38/ 11-25-07 Cur.Px: $80.87 FXF: Currency Shares Swiss Franc- Cost Basis: $89.69/ 1-7-08 Cur.Px: $94.82 EEB: Claymore ETF BNY BRIC- Cost Basis: $50.16/ 10-8-07 Cur.Px: $43.80 DDM: Ultra Dow 30 Proshares- Cost Basis: $58.09/ 7-7-08 Cur.Px: $61.80 DUG: Ultrashort Oil & Gas Proshares- Cost Basis: $27.85/ 5-23-08 Cur.Px: $39.00 PGJ: PS Golden Dragon China- Cost Basis: $21.31/1-3-07 Cur.Px: $24.32 KBE: KBW Bank ETF- Cost Basis: $42.50/ 2-11-08 Cur.Px: $33.66 IYF: iShares Dow Jones US Financial Sector- Cost Basis: $89.31/ 1-24-08 Cur.Px: $73.51 Today, a barrel of Light Sweet Crude is trading at 119.90 (-2.84 from Monday) and the dollar rose to a six-week high against the euro. The Fed is expected to leave interest rates at 2.00 percent as the economy continues to show extreme weakness. Yesterday's markets were soft on economic news that showed the largest jump in consumer inflation since 2005. Oil prices dropped despite news of a Tropical Storm in the Gulf of Mexico. This is great news for the economy, but what happens after the election is any body's guess. ]]> tag:www.johnmugarian.com,2008://1.1160 2008-08-04T15:20:40Z 2008-08-04T17:01:24Z

I have been in and out of town quite a bit lately, and I need a break from the constant grind of daily "journal" posts. Besides, there isn't a whole lot more to add when it comes to the big...

John Mugarian http://www.johnmugarian.com/ Dynamic Growth: ETF Portfolio NEW BUYS: None NEW SELLS: None Here are our Top 10 ETF's for the week of August 4th: 1) DBA: Powershares DB Agriculture Fund- .366 2) EWZ: Brazil Index- .341 3) SLX: Market Vectors Steel Index Fund- .336 4) FXF: Currency Shares Swiss Franc Trust- .286 5) EEB: Claymore ETF BNY BRIC- .273 6) DDM: Ultra Dow 30 Proshares ETF- Not Rated 7) DUG: Ultrashort Oil & Gas Proshares- Not Rated 8) PGJ: PS Golden Dragon China Fund- .112 9) KBE: KBW Bank ETF- Not Rated 10) IYF: iShares Dow Jones US Financial Sector- Not Rated Here are our Top 10 Fidelity Sector Funds for August 2008 1) FSCHX: Chemicals 2) FSMEX: Medical Equipment 3) FSCGX: Industrial Equipment 4) FCYIX: Industrials 5) FSPTX: Technology Portfolio 6) FSCSX: Computers & Software 7) FSCPX: Consumer Discretionary 8) FWRLX- Wireless 9) FSRBX: Banking 10) FSVLX: Home Finance NEW BUYS: None NEW SELLS: None Honorable Mention (Holds): None The Week in Review: Despite the rally in the financials, many TV personalities on the financial channels continue to tell us to stay away. When everyone seems to be of the same opinion, I tend to look at the opposing side. Obviously the trouble in the financial sector isn’t over yet, but going forward the sector is about to report favorable comparisons versus previous quarters in the months ahead. The key to success in a beaten down sector is to own the cream of the crop. Eventually, when things stabilize, the cream rises to the top. Last week the economic news was not pretty. The unemployment numbers released last week hit a four-year high, putting the jobless rate at 5.7%. The economy lost 51,000 jobs in July, fewer than the 72,000 lost jobs economists polled by Reuters. The economy has now lost 463,000 jobs since January, and July was the first time since May 2002 that the economy lost jobs for seven straight months. The Fed’s latest Beige Book report showed that inflation remains a huge problem. The Fed is in a tough spot between fighting commodity inflation and dealing with weakening economy. We will know more about the Fed's response after the election. If oil prices continue to fall after the November elections, inflationary pressures will subside. If the drop in oil prices was manufactured, and begin to rise after the election, the Fed may have no choice but to hike interest rates. If this happens, I believe we will see the final leg down in the "W" shaped recovery which can send the DJIA to 10,000 or slightly below. ]]> For the Week: INDU :11,370.99/ -125.58 SPX : 1,257.76/ -2.92 COMP: 2310.53/ +27.75 -Gold closed at $917.50/oz -19.40 for the week. Last week gold closed at $936.90, and was trading at $958.00 two weeks ago. -The Commodities CRB Index closed at 416.02, up from 412.22 last week, and down from 427.17 two weeks ago. -Crude Oil closed at $125.10/bbl up from $123.26 last week, and down from $129.47 two weeks ago.. We need to see $75-$85/ barrel oil in the weeks ahead to get the economy back on track. Oil has remained above $100 for eighteen consecutive weeks. -The U.S. Dollar closed at 73.44 up from 72.85 last week, and up from 72.21 two weeks ago. Some believe the rate cuts have come to an end, and the dollar is attempting to rally. A strong rally in the dollar will help drive energy prices lower. We raised our allocations last week by 5% across the board when the DJIA dropped below our 11,300 target. Going forward, the next 5% increase will come at DJIA 10,600 for Aggressive, and Moderately Aggressive portfolios, but Moderate, Moderately Conservative, and Conservative investors are not advised to get fully invested unless the DJIA breaks below the 10,000 mark. Our current asset allocation is as follows; 75% Equities: (Normally 95%) Aggressive 65% Equities: (Normally 80%) Moderately Aggressive 55% Equities: (Normally 60%) Moderate 35% Equities: (Normally 40%) Moderately Conservative 15% Equities: (Normally 20%) Conservative]]> tag:www.johnmugarian.com,2008://1.1159 2008-07-28T01:42:48Z 2008-07-28T02:50:01Z

Last week marked an important inflection point for the financials (Maybe oil too). There will be many bumps on the road to recovery, even a few more scary moments. But, starting now, and over the next few years, the healing...

John Mugarian http://www.johnmugarian.com/ Dynamic Growth: ETF Portfolio NEW BUYS: None NEW SELLS: None Here are our Top 10 ETF's for the week of July 28th: 1) DBA: Powershares DB Agriculture Fund- .359 2) EWZ: Brazil Index- .338 3) SLX: Market Vectors Steel Index Fund- .335 4) FXF: Currency Shares Swiss Franc Trust- .342 5) EEB: Claymore ETF BNY BRIC- .289 6) DDM: Ultra Dow 30 Proshares ETF- Not Rated 7) DUG: Ultrashort Oil & Gas Proshares- Not Rated 8) PGJ: PS Golden Dragon China Fund- .112 9) KBE: KBW Bank ETF- Not Rated 10) IYF: iShares Dow Jones US Financial Sector- Not Rated Here are our Top 10 Fidelity Sector Funds for August 2008 1) FSCHX: Chemicals 2) FSMEX: Medical Equipment 3) FSCGX: Industrial Equipment 4) FCYIX: Industrials 5) FSPTX: Technology Portfolio 6) FSCSX: Computers & Software 7) FSCPX: Consumer Discretionary 8) FWRLX- Wireless 9) FSRBX: Banking 10) FSVLX: Home Finance NEW BUYS: None NEW SELLS: None Honorable Mention (Holds): None For the Week: -Gold closed at $936.90/oz -21.10 for the week. Last week gold closed at $958.00, and was trading at $960.60 two weeks ago. -The Commodities CRB Index closed at 412.22, down from 427.17 last week, and down from 461.43 two weeks ago. -Crude Oil closed at $123.26/bbl down from $129.47 last week, and down from $145.66 two weeks ago.. We need to see $75-$85/ barrel oil in the weeks ahead to get the economy back on track. Oil has remained above $100 for eighteen consecutive weeks. -The U.S. Dollar closed at 72.85 up from 72.21 last week, and up from 71.94 two weeks ago. Some believe the rate cuts have come to an end, and the dollar is attempting to rally. A strong rally in the dollar will help drive energy prices lower. We raised our allocations last week by 5% across the board when the DJIA dropped below our 11,300 target. Going forward, the next 5% increase will come at DJIA 10,600 for Aggressive, and Moderately Aggressive portfolios, but Moderate, Moderately Conservative, and Conservative investors are not advised to get fully invested unless the DJIA breaks below the 10,000 mark. Our current asset allocation is as follows; 75% Equities: (Normally 95%) Aggressive 65% Equities: (Normally 80%) Moderately Aggressive 55% Equities: (Normally 60%) Moderate 35% Equities: (Normally 40%) Moderately Conservative 15% Equities: (Normally 20%) Conservative]]> tag:www.johnmugarian.com,2008://1.1158 2008-07-24T17:22:22Z 2008-07-24T17:48:28Z

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey Oil prices are dropping, the financials are stabilizing, and the market is rallying. All things considered, traders should have...

John Mugarian http://www.johnmugarian.com/ "You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey Oil prices are dropping, the financials are stabilizing, and the market is rallying. All things considered, traders should have a lot of fun in the short term. Having lived through the 1970's, and been an investor since 1974, I can tell you my gut is saying this is not a buy and hold market. The recovery we are witnessing marks the half way point of a "W" shaped recovery. The first leg down came as a result of an over leveraged consumer, bad debt, bad loans, and a credit crisis caused by an enormous real estate bubble. Now that the GSE bill has been passed, and is ready for the President to sign, the bleeding in the financial sector will finally come to an end. The next, and final leg down for the economy and the stock market will happen when the Fed raises interest rates to fight inflation. This tightening cycle will help shore up the dollar, and bring energy and commodities prices down sharply. The big question is how high will rates have to go before the Fed achieves its goal of reigning in inflation. After the November elections (mid 2009), the Fed will probably begin raising interest rates. Before they do, I would suggest holding a decent amount of cash on the sidelines to buy stocks and bonds during the final stage of this market downturn. So, do I believe the bear market is over? No, and as Yogi Berra said, "It Ain't Over Til It's Over".]]> tag:www.johnmugarian.com,2008://1.1157 2008-07-23T19:49:12Z 2008-07-23T20:09:46Z

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey Just a few minutes ago, Bank of America's board authorized buying back $3.75 billion over the next 12 to...

John Mugarian http://www.johnmugarian.com/ "You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey Just a few minutes ago, Bank of America's board authorized buying back $3.75 billion over the next 12 to 18 months. In addition, the board declared its regular 64 cents per share quarterly dividend. I'm not very smart, but this sure sounds like good news to me. The other small tidbit on the table is the housing bill which is expected to be passed today, and be signed by President Bush next week. The bill will put the finishing touches on the bailout of Fannie Mae and Freddie Mac. As I have been saying all a long, the government had to come to the rescue of the financials and housing market sooner rather than later. It was only a matter of time. Clearly, it will take time for the financials to regain their footing, but 2-3 years from now I expect this beaten down sector to lead the stock market higher. Bank of America's bold move today may very well market the beginning of the healing process for the financials. The move may not be straight up, and there will be bumps along the way, but I am convinced that BAC will be buying stock at bargain prices when we look back two years from now. ]]> tag:www.johnmugarian.com,2008://1.1156 2008-07-22T21:02:05Z 2008-07-22T21:59:18Z

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey If you haven't seen the movie, "My Big Fat Greek Wedding", do yourself a favor and go rent it....

John Mugarian http://www.johnmugarian.com/ "You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey If you haven't seen the movie, "My Big Fat Greek Wedding", do yourself a favor and go rent it. If you are of Mediterranean descent, you can probably relate. I grew up in a traditional Armenian family, so I particularly enjoyed many of the scenes depicting family exchanges. One quote from the movie that I heard a lot growing up was, when the Greek father Gus said to his wife and daughter, nobody listen to me! In my 20 years in the business, I am convinced the stock market isn't for everyone. When the markets are flying high, everyone wants a piece of the action. But, when times get tough, and the markets get volatile, the men are separated from the boys rather quickly. Today, the financials were flying high on short covering, and oil prices resumed their decline. We have said several times that the solutions to our financial woes would eventually appear. They are not only appearing, they are appearing rapidly. After several high-profile earnings disappointments in the financial sector, stocks bucked conventional wisdom and headed higher. Investors who get their advice from the TV set probably sold financials at the bottom only to watch them double in price in one week. The solutions to the financial crisis were clearly coming. And despite the obvious, investors panicked anyway. Treasury Secretary Paulson proposed a plan to rescue Fannie Mae and Freddie Mac. The SEC announced that short sellers of financial stocks would have to play by the rules and no longer be allowed to participate in "naked" or uncovered shorting. The obviousness in all of this is the financial sector is too important to the nation, and some kind of bailout or intervention was going to occur. A government rescue has happened in the past, so why should we think this time would be any different? Now that the government has stepped up to the plate, and tremendous amount of pressure will subside in the financial sector. In addition, we said the interventionists would do all they could to rescue the dollar and drive energy prices down. Well, low and behold, look whats happening. As gas prices come down, consumers will have more of their income to spend on credit cards, lines of credit, and car payments. This will take even more pressure off the financial sector. In addition, lower energy prices will help deflate the inflation problem which will improve the numbers in the Consumer Price Index for August and September. Going forward, the only concern I have is what energy prices will do after the 2008 presidential elections. The ploy of dropping oil prices before an important election is nothing new. Before the 2004 Presidential election, energy prices mysteriously declined (with help from the Saudis). After the election was over, energy prices reached new highs. I call these election year moves, magic! It is amazing to watch what happens to the markets during the second half of a presidential election year. Over the past 100 years, the DJIA has gained an average of 9.7% during the second half of a presidential election year. I will be watching the energy stocks very closely for clues of accumulation in September and October. If I see that falling oil prices were just an election year ploy, I will make some quick changes to the DG portfolios. Today, Oil prices dropped by nearly $3 per barrel as Tropical Storm Dolly steered clear from oil refineries in the Gulf of Mexico. In addition, the dollar rallied again versus the Euro. For now, let's enjoy the rally, and the election year magic. It looks as if the current crisis has taken a dramatic turn for the better. ]]> tag:www.johnmugarian.com,2008://1.1155 2008-07-21T02:44:48Z 2008-07-21T15:20:08Z

Call it whatever you wish (Oversold bounce, short covering rally, or market bottom), but the rally in the financials and the sell-off in oil was quite impressive. With a tropical storm stirring around in the Caribbean, traders made take that...

John Mugarian http://www.johnmugarian.com/ Dynamic Growth: ETF Portfolio NEW BUYS: None NEW SELLS: None Here are our Top 10 ETF's for the week of July 21st: 1) DBA: Powershares DB Agriculture Fund- .359 2) EWZ: Brazil Index- .347 3) SLX: Market Vectors Steel Index Fund- .343 4) FXF: Currency Shares Swiss Franc Trust- .330 5) EEB: Claymore ETF BNY BRIC- .289 6) DDM: Ultra Dow 30 Proshares ETF- Not Rated 7) DUG: Ultrashort Oil & Gas Proshares- Not Rated 8) PGJ: PS Golden Dragon China Fund- .148 9) KBE: KBW Bank ETF- Not Rated 10) IYF: iShares Dow Jones US Financial Sector- Not Rated Here are our Top 10 Fidelity Sector Funds for July 2008 1) FSCHX: Chemicals 2) FSMEX: Medical Equipment 3) FSCGX: Industrial Equipment 4) FCYIX: Industrials 5) FSPTX: Technology Portfolio 6) FSCSX: Computers & Software 7) FSCPX: Consumer Discretionary 8) FWRLX- Wireless 9) FSRBX: Banking 10) FSVLX: Home Finance NEW BUYS: None NEW SELLS: None Honorable Mention (Holds): None The Week in Review: After dropping below 11,000 this week for the first time in two years, the DJIA rallied 764.61 points from Tuesday's low to close at 11.496.57. While the "final" low how may not have been reached for the overall market, it looks as if a panic bottom may have been made in the financials. The bad news is lows like to be retested. So, sometime in the August-September time frame, I am expecting a re-test of last Tuesday's lows. As the market re-tests its lows, I am expecting that momentum investors will get sliced and diced as the sector rotation model begins to shift its focus away from early contraction investments (energy and commodities), and into late contraction investments such as financials and consumer cyclicals. ]]> Interest Rates Will Rise When Economy Begins to Rebound The U.S. and European central banks have voiced their concerns about inflation which signals a policy shift toward potentially higher short-term interest rates in the future. The problem of course is raising interest rates to fight inflation will put a damper on economic growth. Lowering rates to spur the economy adds further risks to inflation. The best medicine right now is do nothing, and hope that a few interventions help support the dollar, and drive energy prices lower. Intervention was in full swing last week as; - The House plans to vote Wednesday on a housing bill to rescue Fannie Mae and Freddie Mac. - On Tuesday the SEC amended Regulating Short Sales (RegSHO) on 19 banks and financial companies for for 30 days. - President Bush is pressuring Congress to open up offshore oil exploration and pass a bill to restore confidence in the housing finance industry. -Crude oil prices backed off from their record highs after last weeks inventory report showed greater than expected builds in crude, and gasoline. - Geopolitical tensions are easing as the U.S. and Iran are holding productive talks concerning Iran's nuclear program. Clearly, stocks were overdue for an oversold bounce, but now with bank earnings coming in better than expected, we need to ask is there more to come? The Market Volatility Index (VIX) rose above 30 for the first time since March. When this happened, the market abruptly turned and began to rally. Of course the news from Wells Fargo, CitiGroup, and today, Bank of America helped the cause. Tomorrow, if Wachovia doesn't report a disastrous quarter, more strength will build in the financials. For the week: -Gold closed at $958.00/oz -2.60 for the week. Last week gold closed at $960.60, and was trading at $933.60 two weeks ago. -The Commodities CRB Index closed at 427.17, down from 461.43 last week, and up from 472.36 two weeks ago. -Crude Oil closed at $129.47/bbl down from $145.66 last week, and up from $145.29 two weeks ago.. We need to see $75-$85/ barrel oil in the weeks ahead to get the economy back on track. Oil has remained above $100 for seventeen consecutive weeks. -The U.S. Dollar closed at 72.21 up from 71.94 last week, and down from 72.72 two weeks ago. Some believe the rate cuts have come to an end, and the dollar is attempting to rally. A strong rally in the dollar will help drive energy prices lower. We raised our allocations last week by 5% across the board when the DJIA dropped below our 11,300 target. Going forward, the next 5% increase will come at DJIA 10,600 for Aggressive, and Moderately Aggressive portfolios, but Moderate, Moderately Conservative, and Conservative investors are not advised to get fully invested unless the DJIA breaks below the 10000 mark. Our current asset allocation is as follows; 75% Equities: (Normally 95%) Aggressive 65% Equities: (Normally 80%) Moderately Aggressive 55% Equities: (Normally 60%) Moderate 35% Equities: (Normally 40%) Moderately Conservative 15% Equities: (Normally 20%) Conservative ]]> tag:www.johnmugarian.com,2008://1.1154 2008-07-18T15:02:20Z 2008-07-18T19:27:14Z

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey It's really no secret if you stop and think about it. What greater tool can a small group of...

John Mugarian http://www.johnmugarian.com/ "You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey It's really no secret if you stop and think about it. What greater tool can a small group of people have to control the masses than oil? There really isn't one, is there? Magically, and almost on cue oil prices began to cave, and the closer we get to the election oil prices will probably continue to fall. Giving up this manipulative and powerful tool by way of alternative energy seems very remote. If the citizens of the U.S., and people around the globe had to no longer rely on oil for everyday use, total control of the masses would end. I just don't believe the powers behind the curtain will allow this to happen. I believe the solutions to energy independence are quite simple. Assuming two cars per family- an electric car for in-town use, and a fuel efficient gas powered car for long trips, makes a lot of sense to me. Converting every coal, oil, and natural gas power plant to nuclear also makes a lot of sense. Unless I am way off base, I believe this would cut our nations oil consumption by 50-70%. Will it happen? I don't think so. We have had plenty of opportunities in the past, and oil prices "magically" decline prior to full implementation. And, what about a high speed rail system? Why are some European nations light years ahead of us technologically? Since I believe I am wasting my breathe, I think I'll stop right here. This morning I saw where Wachovia immediately gave it's new CEO, Robert Steel 1,990,090 shares of stock with the whopping cost basis of 0. This means at current prices Mr. Steel picks up around $25,871,170. Sure, Steel has some great incentives to get the stock price back to its old highs. Even if the stock reaches $40/ share over the next 2-3 years, Steel will pocket around $79 million. Is this unbelievable or what? Disclosure: I own some Wachovia stock Yesterday, the DJIA jumped 207 points after Oil prices fell for a third straight day to close below $130 for the first time since June 5th. The Financials rebounded after JPMorgan reported better than expected earnings. Today's action is a little more subdued after Google and Microsoft posted disappointing earnings. On the positive side, Citigroup posted better-than-expected second quarter results, and the stock is trading just below $20, up $1.50 on the day. For now, let's hope the behind the scenes guys keep adjusting the price oil on the downside. If they do, we will have a lot a fun in the weeks ahead. ]]> tag:www.johnmugarian.com,2008://1.1153 2008-07-17T15:16:50Z 2008-07-17T19:55:35Z

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey Stocks rose sharply today as crude oil prices continued to drop, and the news coming out of the financial...

John Mugarian http://www.johnmugarian.com/ "You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey Stocks rose sharply today as crude oil prices continued to drop, and the news coming out of the financial sector is not as dire as short sellers and stock manipulators want you to believe. Yesterday's rally was ignited when Wells Fargo announced better-than-expected earnings, and increased its dividend to boot. Today, JP Morgan, Huntington Bank and Comerica also reported results that beat projections. Initial jobless claims for the week ended July 12 were reported up 366,000 v. estimated 380,000 and last week's revised 348,000. June housing starts were reported up +11.5% v. expected 1.5% decline. On the other hand, the July Philly Fed index, a measure of mid-Atlantic factory activity, in lower than expected. The summer and election year rally is now underway. As long as oil prices continue to fall (as I expect they will) stock prices will continue to climb. Lower oil prices are great for the economy, particularly consumer discretionary and financial stocks. The Rest of the Story Brokerage firms are at it again. This morning a team of 10 regulators raided the securities headquarters in of Wachovia in St. Louis (formerly A.G. Edwards) on the companies sales and marketing of auction-rate securities to clients. Subpoenas were handed down after hundreds of investors complained they couldn't access their money. Folks, lets make this simple. If you absolutely must deal with a brokerage firm, don't let them sell you anything other than a stock, (real) bond, mutual fund, or cd. Lawmakers Want to Crush Short Sellers & Hedge Funds On Wednesday, legislation was introduced by Rep. Gary Ackerman (D-NY) that would reinstate a depression -era rule on short selling that was changed in mid-2007. The old rule said that short sellers could only short on an uptick (the uptick rule). This prevented short sellers from selling as the price of a stock was falling. By reinstating the old rule, short sellers can only short if a buyer order proceeds an order to short. Why the rule was changed in 2007 is another one of those strange occurrences that took place under the Bush appointed SEC. SEC Launches Stock Manipulation Probe All I have to say is, "what took so long?". Today, the SEC said it would "immediately" launch a probe into the spreading of false information to manipulate stock prices. Huh, I guess some popular investment TV shows will need to be shut down. As Gene Simmons (KISS) said in his book; "People will hold you up for money, but those same people, if they were loaded (rich), might not resort to holding a gun in front of your face". I wonder if he was describing Wall Street?]]> tag:www.johnmugarian.com,2008://1.1152 2008-07-16T16:23:25Z 2008-07-16T16:54:08Z

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey You heard it here first, and now it is official. Federal Reserve Chairman Ben Bernake said, and I quote,...

John Mugarian http://www.johnmugarian.com/ "You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey You heard it here first, and now it is official. Federal Reserve Chairman Ben Bernake said, and I quote, that "Dollar intervention may be justified in Disorderly Times." In my Monday, July 14th "Journal" post, I said; Going forward the news continues to assume the Fed is out of bullets, they're pushing on a string, and all the negatives that come with this kind of talk. Yes, the Fed made be close to being out of conventional type bullets, but this is when bullets are replaced with intervention. The biggest problem facing the economy and consumers is the high price of energy. Unless the powers in control want to drive the U.S. economy into the ground, the must use other means to turn the economy around. What can they do? Intervention! Over the next few months, I believe intervention will include; 1) Supporting the dollar and forcing shorts to cover. I believe the G-8 will help the dollars woes, and countries with stronger currencies will begin helping the U.S. by aggressively buying the greenback. In turn, the dollar will rally, shorts will cover, and energy prices will fall. I don't claim to be a genius, but the only common sense move for the Fed at this point an time is to support the dollar through intrevention, force shorts to cover, and drive energy prices down. Here are some of Bernanke's comments from MarketWatch. Crude oil prices dropped as much as $6.00/bbl today on Bernanke's support for the dollar and after the government reported that U.S. crude and gasoline inventories rose much more than expected. We have been saying for several weeks that all the pieces were in place to drive oil prices lower. 1) Supporting the dollar and forcing shorts to cover. I believe the G-8 will help the dollars woes, and countries with stronger currencies will begin helping the U.S. by aggressively buying the greenback. 2) Demand destruction- According to the Federal Highway Administration, "Americans drove 22 billion fewer miles from November through April than during the same period in 2006-07, the biggest such drop since the Iranian revolution led to gasoline supply shortages in 1979-80."- 3) Americans are trading in SUV's and lower mileage vehicles for more fuel efficient ones. 4) Oil purchases for our nations Strategic Petroleum Reserves (SPR) have been temporarily halted. 5) Election year magic! Over the past 100 years, the DJIA has gained an average of 9.7% during the second half of a presidential election year. Has the magic just begun?]]>