RITE Report Chris Angle, Editor 19 Topledge Road (P.O. Box 708) Redding, CT 06896 Tel. 203/253-2008 Fax. 203/286-2356 Email:
[email protected] http://www.stock-market-direction.net/
Date: August 31th, 2010
RITE Report Summary: 1) Corporate Snippets remain strong at 68% positive, 32% negative. 2) Negative General Business and Economics Snippets have, since May, increased to parity with the Positive/Negative news ratio at 50/50 percent. This will drag on the upward potential of the stock market. 3) M & A Snippet activity remains strong at 49. 4) The RITE Investment Strategy Index increased slightly from 52.8% to 55.7% which is way off from its high in February of 73%. The Strategy Index prognosticates a sideways market with a slight bias to the upside. 5) Inflation is here: Gold will continue its long term rise. (See below indicators.) Side Theoretical Comment on the Concern of Economic Growth that is Dragging on the Stock Market There is a concern within the circle of prominent economic pundits that there is uncertainty in the future of U.S. economy due to the recent massive legislation that has passed which is, of course, well founded. The reason for this concern to actually affect the economy and the stock market is due to the nature of a recession relative to the four or five ingredients of the economic transaction. Within every economic transaction there are risk, time, effort, knowledge/information (for a service),
and material (if the transaction involves a material product). Economists generally define a recession as a period (e.g. six months) of negative GDP growth. However, the cause of a recession materializes when investors realize that there is a potential that their assets, in the present or in the future, may not be worth as much as previously thought; and as a result, they change their behavior. Once they realize that they have, or potentially will have, less value inherent in their assets, their transactions, in which they involve themselves, become smaller. As a result, the amounts of money with which they perform their transactions decreases. In the present market situation, there exists uncertainty (which is a lack of knowledge which is a primary ingredient in the economic transaction) in what is yet to be understood in the massive legislation. This lack of knowledge causes the investor to conclude that there may be the potential that upon the manifestation of the content, there very well could be a cause for his assets to be suddenly less in value. As an example, the decrease in value could be due to greater cost to adhere to the legislation or a tax that would confiscate part of his profitability. Thus, there arises a deterrent the improvement of the economy and to the rise of the stock market.
CONTENTS PART 1 - STOCKS 1) Business News Compilation Index 2) Political & Macro Economic Events Indices 3) Indicators for Technical Analysis 4) Overall Investment Strategy Index 5) Summary PART 2 - HEDGING 1) Hedging and Inflation Snippets 2) Hedging Summary PART 1 - STOCKS 1) Business News Compilation - From The Wall Street Journal Part A - Negative Corporate Snippets 08/02 - Administaff Profit Drops 5% - NRG Energy Profit Falls 51% - Charles River Net Falls 58%
- OCBC Profit Misses Forecasts - Metro's Profit Misses Views - TNT's Net Profit Plummets - Nomura Profit Falls 80% - Merck's Profit Falls 52% - NEC Net Loss Widens 08/03 - BMW Results Surge On Luxury Demand - MGM Resorts Posts Loss - Utilities' Results Sputter - Och-Ziff's Loss Widened - Boyd Gaming Profit Slides 08/04 - AOL Swings to Loss - Postbank Drops Key Targets - AXA First-Half Net Profit Slides - Allied Irish's Net Loss Widens on Bad Debts - P&G Promotions Pinch Profit - LG Electronics Braces for a Slowdown 08/05 - Unilever Warns on Outlook - Cigna's Profit Drops 32% - Deutsche Telekom's Net Profit Slides - Unilever Warns on Outlook - Zurich Financial's Net Profit Halves - CBOE Profit Falls 11% - Transocean's Profit Falls 12% 08/06 - AIG Posts $2.7 Billion Loss - Allianz's Net Profit Falls 46% - Zurich Financial's Net Profit Halves - Omnicare Profit Falls 60% 08/09 - Chrysler Posts Loss - Freddie Mac Seeks More Aid - King Pharma's Profit Falls 53% - WellCare Posts Loss as It Settles Suits 08/10 - TUI Warns on Full-Year Results - Higher Claims Hit Hannover Re
- Liberty Media Stumbles - GLG Revenue Drops on Poor Fund Performance - Lions Gate Swings to a Loss - Dish Network Sees Drop in Subscribers 08/11 - E.ON's Profit Slips - Thomas Cook Sees Weak Demand - HKEx Net Profit Drops 16% 08/12 - Cisco Sounds Cautious Note - San Miguel Net Drops - Egypt's Orascom Swings to a Loss - Competition Hits Telstra Profit - SingTel Profit Slips - Qantas Profit Falls 08/13 - Cowen's Quarterly Loss Widens - Tough U.S. Market Hits Delhaize - Korean Air Swings to Loss - Qantas Profit Falls - Wendy's/Arby's Net Falls 28% - Ranbaxy Profit Slumps 53% 08/16 - MAS Swings to Loss - Kirin Net Profit Falls 52% - Harmony Gold Swings to a Loss 08/18 - BJ's Wholesale Lowers View - Vestas Knocks Wind Out of Forecast - CSL Plans Buyback After Net Slips 08/19 - Druckenmiller to Close Shop - Holcim's Net Profit Falls 12% 08/23 - Sanderson Farms Net Falls - BYD Says Growth Will Slow Further 08/25 - Medtronic Sales Hurt by Softer Market - Barnes & Noble Swings to Loss 08/26
- U.S. Hangover Hurts Diageo - American Eagle's Net Slumps; Store Closings Planned 08/31 - Anglo Irish Posts Massive Loss - Centro Outlook Remains Dim - Lukoil's Net Slips on Higher Costs - EFG Eurobank Net Slumps 61% Negative Corporate Snippets Total = 73 Part B - Positive Corporate Snippets 08/02 - HSBC's First-Half Net Profit Doubles - Futures Rally on Strong Bank Results - Humana's Net Jumps 21% - HealthSouth Swings to Profit - Loews, CNA Profit Rises - Oshkosh Swings to Profit - PPR's Net Profit Doubles - ICICI Bank Posts 17% Profit Growth - EADS Raises Full-Year Forecast - Chevron Profit Soars - Honda, Mazda Improve Bottom Lines - Renault Posts First-Half Profit - Audi's Profit Doubles as Sales Climb 08/03 - Pfizer's Profit Climbs - ADM Profit Soars - Dow Chemical Swings to Profit - MasterCard Profit Jumps 31% - MillerCoors Profit Rises 28% - Tenet Swings to Profit - D.R. Horton Swings to Profit - Baker Hughes Net Rises - Marsh & McLennan Swings to Profit - Xstrata's Net Profit More Than Triples - Deutsche Post Raises Outlook - Taylor Wimpey Posts Profit - NYSE Euronext Swings to a Profit
- Botox Sales Plump Up Allergan's Net 08/04 - Toyota Swings to Profit - Time Warner Profit Rises 7.3% - SocGen's Net Profit Triples - IntercontinentalExchange Net Rises 41% - Munich Re's Net Beats Forecasts - Lower Provisions Lift Ally Financial - CBS Earnings Rise Sharply - Electronic Arts Turns In a Profit - Dollar Thrifty Profit More Than Triples - Coach Profit Rises 34% - UMC Profit Surges 08/05 - Viacom Profit Rises 52% - Revenue Rises for Cable Companies - MF Global Returns to Profit - Back to the Future for Big-Spending Rio - Aviva, RSA Give Upbeat Forecasts - Barclays's Profit Rises on Lower Charges - Hutchison Profit up 12%, 3G Losses Narrow - Swiss Re Swings to a Net Profit - Brazil Boosts Portugal Telecom - Lloyds, HSBC, Standard Chartered Enjoy Profits - Avis Budget Group Swings to Profit on Cost-Cutting - DirecTV Profits Up - CenturyLink, Qwest Post 2Q Profit Despite Weak DSL 08/06 - Magna Swings to Profit - RBS Creeps Back Into Black - Washington Post's Profit Rises - Old Mutual Swings to a Profit - Rio Tinto Profit More Than Triples 08/09 - McDonald's Sales Jump - Liberty Media Cites Gains - Tyson's Net Jumps 89% - China Vanke's Net Profit Rises 11% - Washington Post Warns About Kaplan: reported a large jump in second-quarter profit reflecting fewer charges and growth in its education division.
08/10 - JA Solar Posts Profit - Fossil Posts Record Results - CC Media Trims Loss - MBIA Profit Climbs 44% 08/11 - Macy's Lifts Outlook - ING's Net Profit Soars - Nestlé First-Half Profit Rises 7.5% - Adecco Swings Into the Black - First Data Loss Narrows - Disney Profit Soars on Sports, Films - InterContinental Sees a Rebound - Scotts Miracle-Gro Net Rises - Tencent Posts 61% Profit Rise 08/12 - General Motors Posts $1.3 Billion Profit - U.K.'s Prudential Posts Profit - World Cup Boosts AB Inbev - MTR Reports 48% Profit Rise - Bank of East Asia's Net Rises 78% - Macy's Tailored Merchandise Pays Off 08/13 - J.C. Penney Reports Profit - Asustek Swings to Profit - Hypo RE Posts Narrower Loss - Estee Lauder, Elizabeth Arden Swing to Profit - Tata Steel Swings to Profit - PCCW Profit Rises 17% 08/16 - Lowe's Net Rises 9.6% - H&M Sales Beat Expectations - Michael Page Posts Bumper Earnings - Lend Lease Swings to Profit - Leighton Posts 39% Profit Rise 08/18 - Woodside Profit Rises 40% - DP World's First-Half Net Profit Rises - Westfield Returns to Profit - Citic Pacific Net Doubles on Steel Sales, Divestments
- Urban Outfitters Posts 46% Jump in 2Q Profit 08/19 - Williams-Sonoma Net Soars - Sears Loss Narrows - Staples Profit Rises 40% - Cnooc Profit Doubles - Lenovo Swings to Profit - Dollar Tree Profit Jumps 37% - Yingli Green Posts Profit - China Mobile Profit Climbs - Maersk Returns to a Profit - Deere Reaps Robust Profit - Target Profit Climbs 14% - Chinese Banks Post Profit Jumps - Swiss Life's First-Half Profit Soars - Applied Materials Posts Profit - Sam Zell Seeks Bigger Slice of Manhattan - Applied Materials Posts Profit 08/20 - Smucker's Earnings Rise 5% - H-P, Dell Post Profit Increases - AnnTaylor Swings to Profit - Hormel's Profit Rises 11% - Toro's Profit Rises 69% - GameStop's Profit, Sales Edge Up 08/21 - BYD's Profit Doubles - CCB's Profit Rises 27% - Higher Oil Prices Boost Sinopec's First-Half Profit 08/23 - Chalco Swings to Net Profit - Westpac Cash Profit Rises - BYD Says Growth Will Slow Further: BYD's first-half net profit more than doubled from a year earlier, as the Chinese battery and car maker benefited from Beijing's measures to boost car sales. - CCB's Profit Rises 27%: China Construction Bank reported first-half net profit rose to $10.42 billion, 08/24 - Ping An Insurance Profit Up 28% - U.S. Turnaround Bolsters WPP Results
- Aer Lingus's First-Half Loss Narrows - Sinopec's First-Half Profit Climbs - Laggards Amid Ad Rebound 08/25 - Toll Brothers Swings to Profit - Cost Cuts Lift Heineken Profit - BHP Billiton Profit More Than Doubles - Chinese Car Makers Post Strong Results - Air China Net Soars 60% - China Life Posts 7.4% Net Rise - Hongkong & Shanghai Hotels Posts 31% Profit Rise - Advertising's Revival Boosts WPP - Bank of Montreal Earnings Rise 20% - China Telecom's Net Inches Up 08/26 - Crédit Agricole's Net Profit Soars - Ahold's Net Profit Rises 3.1% - Genting Net Surges on New Casino - Virgin Blue Swings to Profit - Fortescue Posts 14% Profit Rise - Cost Cuts Boost L'Oréal's Results 08/27 - Dana Moves To Rebuff KNOC, Reports Profit - Tiffany Posts Profit Gain, Lifts Forecast - AgBank 6-Month Net Up 40% - Intesa Sanpaolo's Net Profit Soars - Iberia Swings Into the Black - Diageo Posts Tepid Results 08/30 - Retail, Terminals Boost Wharf's Profit 08/31 - Bertelsmann Raises Forecast - Carrefour Swings to First-Half Profit - Taiwan PC Makers Post Profit Rises - Rusal Swings to First-Half Profit - Hermes Profit Jumps 55% - Terminals Help Boost Wharf - Macau Casinos' Profits Improve Total of Positive Corporate News Snippets = 160
Index of Snippets: Positive Trend is in Place Month of Snippets
% Positive Snippets
% of Negative Snippets
March 09
5% or less
Approx. 95% or more
April 09
35%
65%
May 09
55%
45%
June 09
56%
44%
July 09
44%
56%
August 09
41%
59%
September 09
51%
49%
October 09
57%
43%
November 09
58%
42%
December 09
59%
41%
January 2010
72%
28%
February 2010
69%
31%
March 2010
65%
35%
April 2010
73%
27%
May 2010
78%
22%
June 2010
74%
26%
July 2010
73%
27%
August 2010
69%
31%
2) Political Risk & Macro Economic Events/News A) Negative WSJ Economic and General Business Data Snippets
08/02 - China Industrial Growth Slows - Earnings Show Europe's Sluggishness - Asian Economies Slowing - Earnings Show Europe's Sluggishness - Recovery Loses Momentum - IMF: U.S. Financial System Still at Risk - U.K. Consumer Confidence Slumps 08/03 - Spending, Income Were Flat in June - Factory Growth Slows Around World 08/04 - Private Sector Adds 42,000 Jobs: Private payroll gains increased by only 42,000 in July, as large business added no new workers, according to an ADP report. - Home Data Slide Again as Tax Credit Expires - U.K. Recovery Lags Euro Zone 08/05 - Jobless Claims Rise - Poll: China's Growth Slowing - Geithner Pushes Tax Boost for Wealthy - China's Growth Slowing to About 8%, WSJ Poll Finds - Job Growth Stayed Weak in July - Personal Bankruptcies Rise, Reversing Trend - Home Data Slide Again - Factory Growth Slows Around World 08/06 - U.S. Employers Shed Jobs: Unemployment Rate Held Steady at 9.5% in July The U.S. economy shed more jobs than expected in July while the unemployment rate held steady at 9.5%, a further sign the economic recovery may be losing momentum. - German Industrial Output Falls - Retailers Suffer Lazy Days of Summer: Retail sales at U.S. chain stores rose a disappointing 2.9% in July, falling short of forecasts, as markdowns failed to inspire cautious consumers. - U.K. Industrial Output Drops 08/09 - Japan Hit By Global Slowdown - U.S. Job Market Loses Steam 08/10
- Productivity Fell in Second Quarter - Incomes Fall in Most Metro Areas - Freddie Mac Seeks More Aid - U.K. House Prices Fall 08/11 - Fed Sees Recovery Slowing - Employers Moving Slowly to Fill Jobs - China's Economic Growth Slows 0812 - Jobless Claims Remain Stubbornly High - ECB Warns on Economic Recovery - Greek Recession Deepens - Cost of Insuring European Debt Rises 08/13 - Hungary's Economy Stagnates 08/14 - Rosenberg: Odds of Double Dip Higher Than 50/50 - Bargain-Hungry Buyers Keep Retail Sales Weak 08/17 - German Data Point to Slowdown 08/19 - Malaysia's Growth Cools 08/20 - Jobless Claims Jump in New Sign Recovery Is Sputtering - France Cuts 2011 Growth Forecast 08/21 - France Dims Outlook for 2011 - Job Crisis Grows as Greece Falters 08/23 - Wall Street Faces Job Cuts - S&P Raises Concerns Over Turkey - Europe's Recovery Loses Steam: The euro zone's private sector expanded at a slower pace in August, weighed down by both the manufacturing and services sectors, but remained well above the key break-even level of 50. 08/25 - Durable-Goods Orders Rise Less Than Expected - Plunge in Home Sales Stokes Fears - Japan Export Growth Slows Down 08/26 - Data Underscore Slowdown
08/27 - U.K. Economy to Slow - Shiller Sees Potential 'Double Dip' - U.S. GDP Growth Revised Downward 08/30 - Intel Warns on PC Demand 08/31 - U.K. Consumer Lending Growth Slows - Euro-Zone Unemployment Holds Total of Negative General Business and Economic News Snippets = 59 B) Positive Economic and General Business News Snippets 08/02 - Survey Shows Rising Optimism for Rebound - Higher Profits Fueling Buybacks - Thailand Expects Strong GDP - Survey Shows Rising Optimism for Rebound - Rising Wages Rattle China's Small Businesses - South Korea's Exports Rose in July - Germany Regains Jobs Lost in Recession - Euro-Zone Sentiment Improves - Global Chip Sales Rise 08/03 - Spanish Job Market Improves 08/04 - Lower Loan Losses Lift Lloyds - PE Firms Seek China Stocks - Early Result Shows Strength for Acer - Car Sales Rose 5.1% in July 08/05 - July Retail Sales Inch Up - Greece Meets Austerity Targets - Ad Market Largely Stronger - Indonesia GDP Grows 2.8% 08/09 - German Exports Rise Again - China Trade Surplus Surges - Small-Business Sentiment Deteriorates Again
- InterContinental: Room Rates Are Rising 08/10 - U.S. Trade Deficit Widens 08/12 - Buyers' Credit Lifts Home Prices 08/13 - Germany Drives Euro-Zone Growth - Cars, Gas Drive Up Retail Sales 08/16 - China Output Tops Japan 08/19 - Bundesbank Lifts Forecast - Auto Sector Fuels Factory Output - German Retail Sales on the Rise - Fund Firms' Stocks Rebound From Lows: Slow Recovery on Good Financial Data 08/20 - Germany to Raise 2010 Growth Forecast - Bundesbank Lifts Forecast - Deals Stage Comeback 08/21 - New York City Sees Job Growth - Germany to Raise '10 Forecast 08/23 - Cities Privatize Assets Amid Cuts - Thai Growth Beats Views - Taiwan's Economy Expands - Euro-Zone Factory Orders Rise 08/25 - Swedish Confidence Soars 08/26 - Fewer Households Behind on Mortgages - U.K. Retail Sales Hit Three-Year High - German Sentiment to Rise 08/28 - Bankers Say Recovery Likely to Stay on Track 08/30 - Chip Sales Rise in July 08/31 - India Economy Expands 8.8%
- Consumer Spending Grows Modestly - Euro-Zone Confidence Improves - State Tax Revenue Gains Total of Positive General Business and Economic News Snippets: 58 C) Merger/Acquisitions/Public Offerings Snippets From the Wall Street Journal 08/02 - Volvo's Sale to Geely Finalized - Gordmans Stores Tests IPO Market - Western Gas to Buy Anadarko Assets - Disney to Sell Miramax - AWB to Merge With GrainCorp - Qualcomm Sets India Venture 08/03 - BP Sells Colombian Business - MetLife Share Sale to Total About $3 Billion - Lure of Gold Prompts Merger - HgCapital Set to Buy TeamSystem 08/05 - Acer Seeks $500 Million Via Convertible Bonds 08/06 - Everbright to Raise up to $3.21 Billion 08/09 - Skype Files for IPO - Nabors to Buy Superior Well for $735 Million - ITT to Sell Engineering Unit 08/10 - Fortress to Buy 80% Of AIG Lending Unit 08/11 - Lavazza Brews Deal With Green Mountain - Coastal Resort Goes for Cheap Price - Spain's ACS Sells Abertis Stake 08/12 - AIG Sells Piece of Its Empire 08/13 - Li & Fung to Buy Logistics Firm - Dynegy Agrees to Buyout - IBM to Buy Unica for $480 Million
08/16 - Dell to Acquire 3PAR - AgBank Sets Global IPO Record - Vedanta to Buy Stake in Cairn India 08/18 - Windstream to Buy Q-Comm - Groupon Buys Rivals in Japan and Russia 08/19 - GM Files for Long-Awaited IPO - Intel to Buy McAfee - Nidec to Buy Emerson Unit 08/20 - Apple to Close Quattro Wireless - MasterCard to Buy DataCash - Mitchells & Butlers to Sell 333 U.K. Pubs 08/24 - PwC to Buy Diamond Management - AIG Commits on Nan Shan Sale 08/25 - Posco to Sign Daewoo Deal 08/27 - Google to Acquire Start-Up Angstro - Mongolian Mining Plans $1 Billion IPO - Bain Capital Expected to Buy Air Medical Group 08/30 - Intel Seals Infineon Deal - H-P Adds $10 Billion to Buyback - 3M to Acquire Cogent 08/31 - Exelon to Acquire Deere Unit - Simon Closes Purchase of Prime Outlets - George Weston to Buy U.S. Bakery Business - Schwab to Buy Windward in ETF Push - Google Buys SocialDeck Merger/Acquisition/Public Offerings Snippet Total: 49
Table of Positive v. Negative General Economic & Business News With
Investment Banking Snippet Count Month
% Negative Snippets
% Positive Snippets
M & A, Public Offering Snippets
August 09
40%
60%
12
September 09
48%
52%
30
October 09
34%
66%
24
November 09
33%
67%
31
December 09
38%
62%
35
January 2010
48%
52%
25
February 2010
43%
57%
28
March 2010
34%
66%
40
April 2010
33%
67%
47
May 2010
53%
47%
38
June 2010
51%
49%
52
July 2010
50%
50%
42
August 2010
50%
50%
49
3) Technical Analysis Summary INDICATOR MONTH OF RITE REPORT
July 30, 2010 August 31, 2010 (June data unless (July data unless otherwise noted.) otherwise noted.)
TREND and/or COMMENT
REAL GDP
Q2: 2.4%
Q2: 1.6% (Revised)
Trend Declining
UNEMPLOYMENT RATE
9.5%
9.5%
No Movement
INDUSTRIAL PRODUCTION
+ 0.1%
1.0%
Positive
PURCHASING MANAGERS INDEX
56.2%
55.5%
Economy Expanding
RETAIL SALES
$360.2 billion
$362.7 billion
Even
CONSUMER SPENDING
May: + 0.2%
June 0.0%
No Movement
CONSUMER CONFIDENCE (Conference BoardTM)
Downward Movement
Downward Movement
Negative
HOUSING STARTS
549,000
546,000
No Movement
EXISTING HOME SALES
5.37 million
3.83 million
Negative Movement
TRADE DEFICIT May: $42.3 billion $49.9 billion
Increase Movement
CONFERENCE BOARD LEADING ECONOMIC INDICATORSTM
Slight Decrease
Slight Increase
Positive
CONFERENCE BOARD COINCIDENT ECONOMIC INDEXTM
Unchanged
Increase
Upward
SUMMARY
5 Positive 4 Negative 3 Neutral
4) RITE Investment Strategy Index Scale: 0 = Neutral; +10 = High Opportunity Environment; -10 = Extreme Negative Risk Miasma EFFORT, RISK, FREEDOM, KNOWLEDGE/INFO
August 31 REPORT
COMMENTS
1) Domestic Political Risk
-8
Deleterious Lawmaking Gone Rampant Fraught With Unintended Consequences
2) Tax Risk
-5
Taxes Coming plus Bush Tax Cuts Will Expire
3) Individual Incentive Freedom
-3
Assault on Freedom Continuing
4) Production of Knowledge
+5
Positive corporate snippets persist; ergo, the potential for R&D investment.
5) Technical Analysis of the U.S. Stock Markets
-0-
Sideways market.
6) Corporate Snippets
+ 10
Positive Snippets Remain
High 7) General Business & Economic Snippets
0
50% Neg. 50% Pos.
8) Economic Indicators
+1
Slight Improvement on Indicators from last month
9) Merger/Acquisition Activity
+8
Strong at 49
Sum of Total
8
Sudden Large Decrease from 12
Average of Total
1.14
Slight Increase
Percentage of Equity Commitment
55.7%
Slight increase from last month’s 52.8%
History of Strategy Index Month & Year
Percentage Index
October 2009
72.2%
November
71.6%
December
72.8%
January 2010
71.1%
February
73.35%
DJIA
Gold
Oil
USD Index
March
66%
April
68%
May
70% 56.1%
10,024.02
June 30th
56.6%
9,774.02
July 30th
52.8%
10,465.94
1,183.5
78.99
81.655
Aug 31st
55.7%
10,014.72
1,248.1
72.29
83.165
June 1st
5) Summary EQUITY MARKET CONCLUSION: The corporate profit news is good but the General Business and Political News has not improved, and the RITE Strategy Index has levelled off and remains a little above the 50% mark; thus, we can expect this market to go in a general sideways movement. As a result, the index suggests a slight increase of your Equity Position to 56%. PART 2: HEDGING 1) HEDGING/INFLATION SNIPPETS FROM THE WSJ Deflation 08/12 Investors Reload the Guns On Euro 08/14 Dollar Seems Headed Higher Against Euro: A shift in worries about economic growth is injecting new life into the dollar, with the U.S. no longer seeming such a laggard compared with Asia and the euro zone. Inflation 08/03 Fed Mulls Symbolic Shift: Officials to Consider Putting More Money Into Bond Market as Recovery Wavers
Deflation Snippets = 2 Inflation Snippets = 1 Total Snippets = 3 INFLATION TABLE RITE Report MONTH
CONSUMER PRICES
PRODUCER PRICES
Bureau of Labor Statistics
Bureau of Labor Statistics
INFLATION DATA.COM
INFLATION SNIPPETS %
DEFLATION SNIPPETS %
Dec 2009 + 1.8%
+ 2.4%
+ 1.84%
Jan 2010
+ 2.7%
+ 4.4%
+ 2.72%
44%
56%
Feb
+ 2.6 Jan
+ 4.6% Jan
+ 2.63
44%
56%
March
+ 2.1%
+ 4.4%
+ 2.14%
40%
60%
April
+ 2.3%
+ 6.0%
+ 2.31%
29%
71%
May
+ 2.2%
+ 5.5%
+ 2.24%
50%
50%
June
+ 2.0%
+ 5.3%
+ 2.02%
25%
75%
July
+ 1.1%
+ 2.8%
+ 1.05%
25%
75%
August
+ 1.2%
+ 4.2%
+ 1.24%
33%
67%
COMMENT
2) HEDGING SUMMARY a) Stock Market Hedging Trading Strategy Suggestions: 1) Consider having your trader putting on a slight hedge to the down side in case the near term news turns even worse. 2) Another strategy: Write Covered Calls. b) Oil: Four months ago the RITE Report predicted it will continue its long term ascent. For short term considerations, write some covered calls for supplemental income to your petroleum equity holdings as the oil sector has stalled in its upward trend.
c) Gold: The Inflation Table continues to indicate that inflation is here. Plus, the inflated Fed balance sheet still looms and may even increase. Continue to go long. IT IS STILL A GOOD TIME TO BUY THIS COMMODITY.
d) The U.S. Dollar: The news of the European economy is not strong. Thus, the U.S. Dollar Index remained level; but due to Fed policy and inflation data above, we expect the U.S. Dollar Index to begin to further decline. _________________
(The RITE Report’s name was derived from the acronym of the four variables inherent in all economic transactions; Risk, Information/Knowledge, Time, and Effort. Of course, this would be for a service, and if the product were a material good, there would be an additional factor of Material - or Land as the economist would say. See The Philosophical Equations of Economics at www.philosophypublishing.com for further info on this subject.) For Your Reference: CUSTOM RESEARCH: Please note that custom economic and/or macro investment research is available on request. SELF-ADVERTISEMENT BLURB: Chris Angle is the author of: The Nature of Aesthetics - 978-0-9661126-4-1 Defining Ethics Good & Evil - 978-0-9661126-5-8 Truth and the Nature of Decisions - 978-0-9661126-6-5 The Philosophical Equations of Economics - 978-0-9661126-3-4 These books may be viewed at: www.philosophypublishing.com DISCLAIMERS/CAVEATS: 1) Past performance is not indicative of future results. 2) Trading futures and options involves substantial risk of loss and is not suitable for all investors. Carefully consider the suitability based upon your experience, objectives, financial resources and other relevant circumstances. Alternative
investment products, including hedge funds and managed futures, involve a high degree of risk. Alternative investment performance can be volatile and are not suitable for all investors. An investor could lose all or a substantial amount of his or her investment. 3) This communication does not constitute an offer to sell, or a solicitation of an offer to buy or sell, any products named herein, commodities interests, futures contracts, or securities, and is intended for informational purposes only. Any offer for any investment product will be made solely by the appropriate disclosure document or private placement memorandum. 4) The RITE Report has been prepared either from publicly available information or reflects the opinions of the author. Information contained in this report is believed to be reliable but may not have been independently verified. The RITE Report does not guaranty, represent or warrant, or accept any responsibility or liability as to, the accuracy, completeness or appropriateness of the information contained herein. At no time will the RITE Report make specific recommendations for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended. Information contained herein may not be current due to, among other things, changes in the financial markets or economic environment. Opinions reflected in the materials are subject to change without notice. Forecasts represent estimates. Information provided by the RITE Report is expressed in good faith, but it is not guaranteed. Long-term success trading or investing in the markets demands recognition of the fact that error and uncertainty are part of any forecasting effort. Investing carries risk of losses. Information provided by the RITE Report does not constitute, and should not be used as a substitute for tax, legal, or investment advice. Please ask your broker or your advisor to explain all risks before making any trading and investing decisions.