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Dallas, TX,
Morris: Bush Has To Get Out Of Iraq
A Change Of Heart For Republicans
Faced with the possibility of losing their jobs, Republicans are turning on the Bush White House's Iraq policy. And one high profile Republican strategist, Dick Morris, says that Bush "will have to pull out of Iraq, or face historical obliteration."
Morris, who usually saves his most harsh criticism for his former employers, the Clintons, especially Mrs. Clinton, has turned the flame thrower on the White House, a group he often defends.
The Way Morris, in a recent column sees it, eleven Republicans have already turned on Bush, and that's significant enough, apparently, for him to pile on as well.
And just in case any Bush partisans see this as us piling on Bush, note that we're not. Bush haters should also note that we're not giving him a pass either.
Our position for some time has been that the Bush/Cheney team has not conducted this war in an optimal fashion, having been duped by Ahmad Chalabi into entering Iraq in order to do Iran's dirty work.
That being said, we find the Morris article interesting, since Morris, during the past two elections, presidential and Congressional, was a proponent of the White House, and the Republicans, using Iraq, and the war on terror, as the main issue in order to get elected.
Now, Morris, always an adroit political weather vane is essentially telling the White House to get out of Iraq.
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Energy Sector
Mixed Oil Numbers Ahead Of Natural Gas Figures
Crude oil supplies dropped as product supplies rose, according to the latest data from the U.S. government. The combination was enough to make prices ease some, although no major technical levels were broken.
The overall take on the report is that there was some improvement in the situation, but clearly not enough, given the current demand expectations, to crash prices anytime soon.
Going along the same line was an improvement in refinery capacity to 90.2% from last week's 90%. Average numbers for this time of the year are around 93%, so the refinery situation remains completely recovered.
Some analysts are also noting that although production rose in some OPEC countries, other countries, such as Venezuela, continue to show supply decreases.
Analysts are expecting a rise of 95 billion cubic feet for natural gas, whose data will be released Thursday.
Natural gas pulled back on Wednesday, but held above the $6.50 area, which may be the bottom for the cycle, barring a big surprise in supply data.
A rising heat wave working its way to the Northeast U.S., raising demand expectations for natural gas.
Natural gas prices had been diving to new lows lately, which is why we have been watching the sector carefully, looking for a low risk entry opportunity.
We think that opportunity may not be too far off, and may be set off if and when the first major storm of the season hits the Gulf of Mexico's natural gas production zone.
Crude oil prices slipped slightly overnight, but remained well above important support levels.
Oil has moved above $72. Natural gas is hovering near the $6.75 area.
Until proven otherwise, the rising tensions in the Middle East, and the potential for tight product supplies remain two key reasons for price stability at the recently reached higher levels, barring a significant change in the overall situation of supplies and/or global tensions.
Energy stocks have continued to hold up, and remain a viable portion of a diversified portfolio. See our energy section for detials.
Being very careful in the energy sector at the current time remains the best strategy, given the potential for daily price swings.
$70 is still a key chart point for crude oil, while natural gas has been fading lately, after failing to rally above $8.
Our energy section has been updated and still has a core of open positions.
Gold is still range bound.
Chart Courtesy of StockCharts.com
Chart Courtesy of StockCharts.com
Trading oil? Check out Chapter 13 in Dr. Duarte's latest book "Futures And Options For Dummies" (John Wiley & Sons) - an excellent roadmap to the futures and options markets, and today's volatility. Order your copy today.
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Technical Summary
Chart Courtesy of StockCharts.com
Weak Bounce Leaves Doubts
The good news is that the market bounced on 7-11. The bad news is that the bounce came on light volume, putting the market right back into the scenario that preceded the swoon in late June.
Low volume is the hallmark of uncertainty from big money investors, the lifeblood of the market, making it difficult for the rest of us to make money, as there is no trend to follow.
So, once again, we continue to trudge on, trying to focus on strength, in the precious few areas where it may be found.
The most important thing for investors to do during volatile periods is to be diligent about portfolio monitoring, culling losers, and keeping what's working.
A good way to cut risk is to limit exposure to the stock market. For that purpose, we use a seasonally based portfolio.
Our seasonality portfolio is now positive for the year, and will be out of the market until the end of this month, earning interest in 90-day Treasury bills.
For more information visit our growth stock trading section and read the section on seasonality trading.
Otherwise, it's a good opportunity to be patient, and to focus on strength.
We still like what we see in the semiconductor area, which continues to hold up, and could get a boost as chip sales showed a modest increase in the last quarter.
The S & P 500, is testing its 50 day moving average.
Nasdaq has acted well lately, but is due for a pause.
Remember this, as earnings season and its inherent volatility unfolds.
A successful trading program requires several things, patience, attention to detail, risk management, and a sustainable trend.
A sustainable trend, up or down, allows for the steady adjustment of risk, meaning that sell stops, or buy stops if you're selling short, can be adjusted over time, giving the opportunity to reach a profit.
Volatile markets increase the chances of being stopped out prematurely, thus, making it difficult to make money.
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In these types of markets, there is a need to be patient. And patience usually gives traders the feeling that they are missing opportunities to make money. When that happens, inexperience leads to over trading, which tends to increase the opportunity of losing money.
In other words, as it has been for the past several weeks, the best strategy is to stick with what's working, and give this market time to work out its own kinks, without taking too much of our money away.
Think of alternatives to stocks, such as bonds and the dollar, which are still offering a unique trading opportunity, shorting bonds, and being long the dollar.
Otherwise, be patient. From a longer term stand point, based on historical trends, this should be a positive year for stocks, given the fact that it's the third year of the Presidential Cycle, which calls for rallies in the third and fourth years of a presidency.
Our long term forecast remains upbeat, unless the major indexes fall convincingly below their 200 day moving averages.
What To Do Now
Don't trade just to stay busy or to feel as if you're in the game. Be selective. Follow and review your trading rules. Get a good grip on your own willingness to take risk, and don't push the envelope beyond your comfort level.
Keep a lid on emotion, and stick to your trading rules. Aggressive traders should be controlling the risk of any short sales that are still open.
Consider taking some profits where it makes sense, and consider tightening stops where appropriate. Use our individual sections for guidance.
Selectivity remains the key to success. Look for strength, either on a continued basis, or in turn around areas, such as the semiconductors.
Visit all our individual sections, both our ETF and individual stock picks daily for new ideas, and changes to open positions.
Be very methodical about monitoring portfolios, adhering to trading rules, and ratcheting up sell stops is clearly still here.
Second guessing decisions, and hoping that things will turn out o.k. in the long haul, is the recipe for disaster at a time like this in the market.
Check all our sections daily. See tech, biotech, Fallen Angels, and timing systems for the latest adjustments. Our ETF trading systems for energy, Spyders, Small Caps, and technology have also been updated.
Chart Courtesy of StockCharts.com
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