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Dallas, TX
December 18, 2009, 08:00 EST |
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Dr. Joe Duarte's Market I.Q. |
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The Internet's Intelligence Digest
Intelligence, Market Timing, And Trading Strategy For Traders and Investors
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U.S. Losing "Land of Opportunity" Title
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What's Hot Today: |
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U.S. stock index futures were pointing to a higher open
on Friday. A rising dollar is somethingto consider as a catalyst to prices,
as is options expiration. If the S & P 500 can close the week above
1100, the rally hopes for next week will still be alive.
Today's Economic Calendar:
News For Thought
China boycotss private climate meeting. According to The New York Times: "Prime
Minister Wen Jiabao boycotted a closed-door meeting with a group of leaders,
including President Obama, prompting a public rebuke from President Nicolas Sarkozy
of France." The report added: "Mr. Sarkozy said that China is holding back progress
in the climate talks. Speaking just after the unscheduled meeting ended, Mr.
Sarkozy said that Chinese resistance to monitoring of emissions was a key sticking
point. The countries represented include Australia, Britain, France, Denmark,
Germany, Japan, Ethiopia, Bangladesh, Brazil, Russia, India, Mexico, Spain, South
Africa, South Korea, Norway and Colombia. China was represented by a Foreign
Ministry official."
In Mexico and U.S. border corruption is on the rise. According to The
New York Times, the operations are increasingly sophisticated, targeting those
among the border patrol who are most succeptible. The Times reported: "They research
potential targets, anticorruption investigators said, exploiting the cross-border
clans and relationships that define the region, offering money, sex, whatever
it takes. But, with the border police in the midst of a hiring boom, law enforcement
officers believe that traffickers are pulling out the stops, even soliciting
some of their own operatives to apply for jobs." In other words, aside from bribes,
the border patrol is now being infiltrated by the drug gangs.
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U.S. Losing "Land of Opportunity" Title
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Brain Drain Makes Trans Atlantic Shift
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Foreign born professionals who flocked to the U.S. in the
past are findig more opportunities back in their homeland, a sign that the U.S.
contraction is deeper and more meaningful than many suspect.
According to The Wall Street Journal, the chances of landing a job in Europe,
if you have a college degree are significantly higher than in the U.S. a sign
that the European "brain drain" may be starting to reverse, and a potentially
ominous sign for U.S. future gains in technology and innovation.
Some thirty years ago, this scribe was in Europe. And aside from the good times,
even then we noticed that there were lots of folks lingering on street corners
with nothing to do, while others, who looked to have professional jobs were busily
bustling along on their way to work. It seems as if that dynamic may have shifted
to the U.S. now, with one exception, even professionals are more likey to stand
on the street corner with nothing to do in the U.S. these days.
The Journal describes the case of Regina McAnally, a native of Frankfurt. Ms
McAnally "moved to the U.S. in 1985 but found herself back in Germany in 2007
after the company she worked for as an accountant faced difficulties and her
opportunities for advancement became slim." Ms McAnally, according to the report,
never even visited Germany for 22 years, but now is fully employed there "as
a financial analyst with an automotive company in Cologne. She uprooted her son,
then 15, to Germany as well. "
And she's not alone: According to The Journal: " Vivek Wadhwa, a senior research
associate at Harvard Law School who has studied these trends, says frustrations
about the lack of advancement in the U.S., where salary and promotion freezes
have become the norm, are a significant factor in foreign-born professionals'
heading home." That report is bolstered by the HSBC Bank International's 2009
Expat Explorer survey, which "found that 23% of U.S.-based expats are considering
returning home, compared with 15% elsewhere in the world. The most frequently
cited reason was increasingly limited career prospects, according to the survey
of more than 3,100 expats, defined as anyone over 18 living outside their country
of origin."
What's the difference? Apparently, in Europe having an education actually accounts
for something. According to the Journal: "Michael Burda, a professor of economics
at the Humboldt University of Berlin, says while unemployment is at 7.6% in the
country overall, the majority of the unemployed are unskilled. "I keep telling
my friends in the States you need to look for a job here; there's no job shortage
if you have a college degree," says Ms. McAnally."
Some of the problem seems to be related to Visas. According to some interviewed
by The Journal: "employees with H-1B visas—permits issued to skilled workers
from other countries allowing them to work in the U.S.—could be treated unfairly
by management."
Yet, another, and perhaps a more meaningful reason for moving back home is that
for professionals, things have gotten better in their home countries, which is
fueling expectations of at least a moderate exodus of foreign professionals leaving
the U.S. for the greener pastures of their homeland.
Another attractive place, especially for Asians is Singapore. According to The
Journal: "industries such as financial services, research and health care are
still thriving on the island nation, where the overall unemployment rate is just
3.4%."
Even more interesting is the fact that U.S. multinational companies are looking
to hire expats away from the U.S. to fill their international positions.
Conclusion
There are many subtle messages in this latest trend, but the foremost is that
the U.S. in an increasingly unfriendly place to work if you are a foreign professional.
The second is that while most people think in terms of nations, professionals
and corporations are thinking internationally, with one goal in mind, getting
the job done, wherever that is.
The third is particularly ominous for the U.S. health care system, which in many
places relies on foreign physicians, nurses, and technicians. If the current
trends toward "reform" continues, it's only a matter of time before the trends
exhibited in other professions hit health care. With U.S. physician numbers falling
from attrition and lack of interest in the profession from young people who hear
how tough things are getting, life for those who need care may be facing yet
another challenge, as foreign health care professionals choose to practice their
craft elsewhere.
If you extend that to other important professions and crafts, and you add in
the factor that the U.S. education system is a disaster zone, and factor in Congressional
activity in order to "fix the problems that our nation faces" you can see a really
dark future ahead.
No wonder Costa Rica's real estate has been booming for years.
Know when to sell and how to make money when the market falls. Get a detailed
trading plan in your pocket. Read Dr. Duarte's All NEW Books "Market Timing For Dummies." and "Trading Futures For Dummies." The Trading Manuals for
All Seasons. Also Available As Kindle Books. |
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Market Moves - Stock Of The Day
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Goldman Sachs (NYSE: GS) Downgrade Hits Hard
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Uber banking
bear Meredith Whitney downgraded Goldman Sachs (NYSE: GS)
on Thursday, and JP Morgan Chase (NYSE: JPM) got the underwriting
crown for 2009.
Chart Courtesy of StockCharts.com
For several weeks, we've been noting that shares of Goldman
have been making lower highs and lower lows, tracing a
bearish chart pattern. Now, the street is piling on.
Whitney, in a note to clients, cut the estimates for Goldman without really giving
much of a reason. But when Ms. Whitney speaks, people still listen, so the stock
got hit some more and made a marginal new low.
On the same day, JP Morgan Chase reported that it became the number one bank
for IPO underwriting, garnering $2.2 billion in fees for 2009. Bank of America
was number 2 and Goldman fell to number 3.
Much of the IPO money was made in Asia, making the news item even more interesting
and suggesting that Goldman may have lost some of its luster of late.
The question is whether Goldman has seen better days or whether it will resurge
in 2010. The price of the stock, as of now, says no.
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Technical
Look at the Market |
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S & P Breaks Back Below 1100
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The S & P
500 fell below 1100 on 12-17. It also closed just below
the 20-day moving average. Thus, it could be heading
a bit lower, although the 20-day average has been very
good support since the market bottomed in March 2009.
It's hard to predict what's next, given so many crosscurrents in the market.
So the technical aspects of the market are increasingly important, and that's
why the shrinking volatility bands are very important to keep an eye on.
The bottom line is that it pays to be careful.
Summary of Start Rating System
We are adapting our star based rating system to the S & P SPDR ETF (NYSE:
SPY). In this section a 5-star rating for SPY is a signal that down side risk
is very low and that the chances of a further rise in prices are greater than
those of a fall. A 4-star rating Means that the risk is less attractive but that
the odds of a rise in SPY still outweigh the risks of a fall.
A 3-stars rating on SPY suggests that the odds of a rise and a fall are even.
2-stars and 1-stars suggest that down side risk is on the rise.
In no way is this star rating system intended as a series of buy and sell recommendations.
The system is intended as a guide to the general trend of the market and the
S & P SPDR ETF.
Star ratings can change rapidly based on the market's action. Followers of the
ratings should review them on a daily basis.
Star Ratings for S & P SPDR ETF (NYSE: SPY) - updated 12-16-09
S & P SPDR ETF (NYSE: SPY), 4 stars on 12-1-09 - closing price 110.84. Closing
price on 12-16-09 111.52. Short term support is at 109.57. Resistance is at 111.74
and is being tested. A sustained move move above 111.74 would raise the rating
to 5-stars. A move below 109 would drop the rating to 3-stars.
Chart Courtesy of StockCharts.com
Chart Courtesy of StockCharts.com
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