9/11/08

Economics

Recent Data

Weekly mortgage applications jumped 6.4%, the second consecutive rise.

Other

Another potential impact of Fannie/Freddie resolution:

http://www.ft.com/cms/s/0/e30472a6-7e79-11dd-b1af-000077b07658.html?nclick_check=1

On last bit of analysis on Fannie/Freddie:

http://www.forbes.com/opinions/2008/09/08/fannie-freddie-paulson-oped-cx_pjw_0908wallison.html?partner=rcm

George Will on public employee labor unions:

http://jewishworldreview.com/cols/will091108.php3

An update on the impact of commodity prices on the consumer budget:

http://bespokeinvest.typepad.com/bespoke/2008/09/cost-of-higher.html

Chart porn on the export boom:

http://mjperry.blogspot.com/2008/09/export-boom-will-it-continue-with.html

And the dollar index:

http://mjperry.blogspot.com/2008/09/king-dollar-hits-one-year-high-vs-major.html

Equality in spending on health care:

http://gregmankiw.blogspot.com/2008/09/equality-in-health-spending.html

Politics

Domestic

Political contributions of Fannie/Freddie:

http://www.opensecrets.org/news/2008/07/top-senate-recipients-of-fanni.html

International War Against Radical Islam

The Market

Technical/ Fundamental

Stock prices and the S&P 500:

http://bespokeinvest.typepad.com/bespoke/2008/09/is-it-the-sp-50.html

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Yesterday was pretty inconclusive. I actually thought that there was some chance that stocks would up more than they were as a result of the announcement of Lehman’s plan to remain financially sound. That said both indices (DJIA 11268; S&P 1232) closed well within both the short term May/August downtrend and the longer term October to present downtrend. I am still hopeful that they will hold their July 2008 lows (DJIA 10809; S&P 1198). As a nearer term indication of Market direction, watch the late July trading low (DJIA 11120; S&P 1233) for support (note that the S&P closed slightly below this level).

The cognitive dissonance yesterday came in the form of a rally in the oil/commodity stocks which as you know we have been averaging out of--the last sale having been yesterday morning. So we have to question whether or not Tuesday witnessed the lows in these stocks. The only way I have to get a handle on the answer is to look at a stock’s chart and measure the current price against (1) the upper boundary of the stock’s identifiable downtrend [in other words, did yesterday’s price increase move the stock out of an established downtrend?] and (2) whether or not the stock was able to regain the price level of the Stop Loss [that I had originally set at an identifiable support level] which pushed our Portfolios to Sell these holdings in the first place [in other words, following Tuesday’s decline, did Wednesday’s recovery push the stock price above the Stop Loss {support level} which in my judgment would suggest that a bottom has been made].

A review of the charts of all of our oil/commodity holdings as of the close last night shows that save two (Frontier Oil, XTO Energy), yesterday’s pin action did nothing to move the prices of the oil/commodity holdings above either its prior Stop Loss (support) level or the upper boundary of its current downtrend. Bottom line: at the moment, defense remains the best strategy for managing our positions in this group of stocks. As an extension of that point, assuming that these stocks remain within or near the Valuation Ranges, then when they begin trading above the two indicators mentioned above, our Portfolios will be start re-building their positions.

More reflections from Cramer on the liquidation going on in the oil/commodity stocks:

http://www.thestreet.com/p/_htmlrmm/rmoney/jimcramerblog/10436619.html

Subscriber Alert

T

he stock price of Martin Midstream (MMLP-$25) was pummeled yesterday after the management and the board filed a series of lawsuits alleging fraud, etc. and traded below its Stop Loss Price. This morning at the Market open, the High Yield Portfolio will Sell this holding.

http://finance.yahoo.com/q?s=MMLP

The stock price of Accenture (ACN-$38) traded below our pre-set Stop Loss to protect profits. The Aggressive Growth Portfolio will Sell one quarter of its shares in this holding.

http://finance.yahoo.com/q?s=ACN

Aggressive Growth Buy List

Company Close 9/10 Buy Value Range

Ecolab $46.97 $43-49

Lowe’s 25.23 21-25

Styrker 64.91 64-74

Walgreen 35.75 35-40

News on Stocks in Our Portfolios

A positive write up on Donaldson (Aggressive Growth Portfolio):

http://seekingalpha.com/article/94945-donaldson-company-a-boring-stock-that-knows-how-to-deliver-earnings?source=front_page_long_ideas

More Cash in Investors’ Hands