“It’s difficult to be Mindful when you are immersed”

Welcome to July 2013 edition of Views from the Crows Nest. Calgary summers are short, and so this edition will be, too.

Too much of almost anything is bad for us, including essential elements of a healthy lifestyle. Food, drink, sunshine, and exercise in moderation are excellent, but in excess they can be destructive.

The same holds true of information consumption. In respect of our investment portfolio, the mainstream financial industry would have us believe that more information is always better. The typical hooks that broader media use include: conflict (very polarized market opinions), celebrity (what the richest and famous Wall Street types are saying), fear of missing out on gains (greed), and fear of losing capital.

This is all designed to get the viewer addicted to the powerful narcotic of “sensationalist stimulation,” so they can charge more to the advertisers whose commercials you see – many of them disguised as interviews. It’s about the network’s and the advertisers’ profitability, not the viewers’ investment performance. Viewers are unwitting pawns in their chess game. To be frank, mainstream financial journalism is an elaborately designed, ego-based manipulation of human weakness. Yes, that’s how I really feel, and it feels good to say it so directly.

From my view up here in the Crowsnest, it’s painfully obvious that mainstream financial media offers exactly 0% of the Daily Recommended Allowance of the nutrients that lead to health, happiness and prosperity. In addition to lowering stress and enhancing numerous positive things in our lives, Mindfulness also happens to lead to better decision-making.

It’s difficult to be Mindful when you are immersed in the minutiae – whether it’s markets or anything else. Even the scientific community is starting to figure out what the great wisdom traditions have known for millennia. Click here for a TED talk on the subject: 

As this is written, equity market participants are once again euphoric, fundamental valuations are stretched, and big picture technicals are flashing warning signs. Markets don’t care if you bought recently, only you do. So, if you are still invested in long positions, please be Mindful of the risk you are assuming if you choose to do nothing. Are you more concerned about “being right” about when and what you bought, or are you laser-focused on “getting it right” by managing your downside risk?

There is a time to buy, a time to sell, and a time to do nothing at all. My suggestion is that you mindfully consider your personal priorities again, take specific actions that are consistent with your priorities, then sit back and let things unfold while you enjoy the rest of our brief but unusual summer weather.

Patience and Discipline are accretive to your wealth, health and happiness; Fear and Greed are destructive.

Cheers,

Andrew H. Ruhland, CFP, CIM

President, Integrated Wealth Management

Portfolio Strategist, ETF Capital Management

The French government plans to pump billions more in aid desperately trying to save the Peugeot factory in Aulay. Hollande refuses to realize that raising taxes causes economic decline and a greater proportion of money goes to government. The Peugeot production facility is unprofitable and the operation is functioning more like a communist organization rather than an efficient productive entity. These people just cannot grasp the idea that their economic theories are simply antiquated and as unsustainable as Communism.

…..read more HERE

Throw the Bums Out

The Disapproval Rating of Congress has reached an all time high 83%. This is a historical high and is moving into what our computer has been forecasting that 2016 will be a rise in 3rd Party Activity. It is a shame, but politics has lost all touch with the people. The White House is actually arguing that the NSA needs to collect every phone call. This demonstrates that there is nobody left to defend the constitution.

Both Democrats & Republicans are fighting old theories that have proven to be complete disasters. Even in France, on July 18th, 2013 they passed the new Bail-In legislation and took the same position I stated the Fed was going around telling the banks that they willNOT cover losses in proprietary trading – only deposits and loans.

“The trend continues bullish.  This is confirmed by the DIAs (chart below) breaking out to the upside. Remember, use a price of 154 as your safety level.  If the DIAs drop blow 154, sell them and take a small profit.  Note that the RSI is almost overbought, and the histograms are trending lower. (Ed Note: Richard Russell has been writing about markets since starting one of the first Market Newsletters shortly after returning from his job as a B-25 Bombardier over Europe during WW11. He is almost 90 years old now, remains fascinated by the markets, and expresses that by writing to his subscribers every trading day.) 

I’m pleased to include the chart below of GLD.  Here we see gold climbing above its 50-day MA, and at the same time rising above its trendline.  RSI and MACD are both positive, suggesting that the base that has been building in gold is now complete.

The P&F chart shows GLD climbing to the 130 box and perhaps needing a bit of consolidation. Therefore, it would not surprise me to see gold down a bit today.”  (Richard’s comments were written in the morning after which gold was hit hard)  “Of course, a rally to the 144 box would be extremely bullish, and would point to much higher-priced gold.  

For the last month or so, we have been bombarded with every kind of story, opinion and rumor (most of them negative) about gold and gold mining stocks.  Already, gold has rallied past the point where those who had sold their gold were ready to reenter.  So much for trading in and out in a bull market.”

The Master continues: “Price action — Yesterday the Transports closed down, which bothered me.  Today, Transports were down during the day, and the Dow was down with them.  The big question in my mind is how weak are the Industrials?  The daily chart below gives us a clue.  I’m using the 50-day MA of the Dow as the dividing line.  As long as the Dow holds above 15,400, I’ll grade the Dow was bullish.  But if the Dow falls below 15,400, I’ll refer to the 50-day MA, which stands at 15,209.

If the Dow falls below 15,000, I’ll be looking for trouble.  The big question that I’m asking is as follows — is the Dow still in its primary bull trend, or is there a change?  Again, I’ll remind my subscribers, never mind the opinions and the rumors, we’re dealing with price, and price takes everything into consideration.”

To subscribe to Richard Russell’s Dow Theory Letters CLICK HERE.

To subscribe to Richard Russell’s Dow Theory Letters CLICK HERE. Ed Note: I just spoke with Richard’s head office recently I am told that Richard still wakes up every morning excited to see what is going on in the markets. That is why his production of writing for his customers is so prolific. Not only does he mail out his extensive Newsletter every 3 weeks, but he sends out a comment every day with his thoughts on the market action that day. All this for .82 cents a day, or only $300 per year!