Down goes the Dow

fisky wrote:

Okay, saying every time with a technical indicator is pretty iffy. I'd have to check to see for sure how accurate it has been, but when I first saw this indicator last winter, I was very impressed and decided to follow it and share with the rest of the posters here.

Again... no call now or likely in the near future because the band will widen after today's new high.

How can you differentiate between the loss of a squeeze and a break out?

Up 42 so far today, the seemingly inexorable march continues, with money continuing to be cheap.

Plane crash produces another sub 17K buying opportunity. There's panic in the market.

Mock all you want, but I enjoy getting financial advice from Letsrun rather than from professional wealth managers. It's free and no one has an ulterior motive to push me into certain products.

Q1: Does it make sense to re-fi my 3.75% 30-yr fixed mortgage to a 10y interest-only then 15y higher rate loan and free up cash for investment elsewhere?

Before you say bubble-borrow, here are some facts.

Home value 1.4M.

Mortgage balance 800K.

Debt: only the mortgage.

Mid 40s, 3 kids.

Healthy income.

The choice is whether it makes more sense to keep paying down my mortgage, which is the classic move because it's my highest rate of borrowed money, but I already have a lot of equity and that equity isn't liquid (although I do have a HELOC of 150K for emergencies). Wouldn't an I/O loan that frees up 3K/month which can go into the market, 529s, etc. make more sense? Assume I don't fear a massive interest rate hike in year 10 because the balance is manageable and I expect to be fully-employed. My hesitation is that because of taxes, I need to earn 8% short-term or 5% long-term to come out ahead of paying down the 4% loan. Isn't that a better move over 10y? Put differently, shouldn't I do this and pay off my mortgage slightly early with the cash I earn in the market? Related, I probably have equal amounts of equity and retirement money, but relatively little free cash sitting around. What am I forgetting to consider? (assume I have the discipline not to spend the 3K on hookers, blow and an Alter G).

Thanks in advance for the debate.

Good article about Ralph Nader and overpaid executives:

http://www.forbes.com/sites/elizabethmacbride/2014/07/14/ralph-nader-on-how-much-entrepreneurs-should-be-paid/

MH wrote:

Plane crash produces another sub 17K buying opportunity. There's panic in the market.

I assume you're being sarcastic. The bull market is in no danger at least until the fall election season. Then there will almost certainly be a double-digit correction.

Down 161 yesterday, up 37 so far today. Nothing really to see here, still just above 17k

To the troll with the long post trying to hijack the thread, 2/10. But in any case of refi, one should always compare it to simply paying additional principal on the original loan, and make sure to factor in any refi fees--that way, you will often pay it off in the same amount of time or even earlier, and will have the option (should your financial situation change for the worse) of paying the current payment, which is usually a lower dollar amount.

What's not to like? More flexibility, and you end up paying it off in the same amount of time anyway. Before my mortgage was paid off, I considered re-fi'ing, and did once, because the interest rate was just so much lower it made sense. But not a second time it didn't. I ran the numbers including what I was paying off early, and re-fi'ing would actually have been worse.

The surprising thing was that the person at the mortgage company said that she had never seen anybody do this type of analysis before, and she had been in the business 20 years. Whatever.

Anyway, since you're a troll, forget you--but anybody considering re-fi'ing, make sure you do this type of analysis.

The seas have eyes wrote:

fisky wrote:

Okay, saying every time with a technical indicator is pretty iffy. I'd have to check to see for sure how accurate it has been, but when I first saw this indicator last winter, I was very impressed and decided to follow it and share with the rest of the posters here.

Again... no call now or likely in the near future because the band will widen after today's new high.

How can you differentiate between the loss of a squeeze and a break out?

I'll try to answer your question. The width of the BB is based on volatility over the past 20 days looking at the high, low, and close. When the Dow (or any stock or index) moves sideways in a narrow range for 15 (or so) trading days, the bandwidth will begin to narrow considerably as the old trading days fall off the 20 day moving average and new days are added... as long at the days coming on stay within a narrow range.

It is possible that a squeeze occurred July 2nd, but it wasn't definitive enough for me to invest based on it.

As a technical indicator, BB squeezes aren't reliable on the stocks I've checked

Drops 120 so far early Monday morning to below 17k, plenty of time to recover.

Bearish?

"The S&P 500 .SPX has rallied 80 percent since October 2011, the last time it saw a 10 percent pullback, an RBC Capital Markets report released Monday said.

There have only been two other such runs of more than 1,000 days in the last 25 years." - Reuters

I told you guys to buy uranium stocks (specifically Cameco) a while back and now you missed your chance. NYSE:CCJ exploded in the past month. Hopefully someone listened.

Up 3.38% YTD as of July 21 2014 close.

Totally respectable so far, and pretty much exactly as I had predicted for Q2/Q3. I'm still waiting for action later in the year.

By "action" do you mean a correction?

Yes, a correction.

Many will scoff at this, but we are one infrastructural failure away from collapse. While I don't know how likely that is to happen in the near future, what I do think is likely to happen is a crisis in confidence.

There are no more bargain-priced asset classes anymore. Bond yields are WAY down. RE, as an investment, is overpriced. People have moved into riskier investments trying to find yield, but the risk hasn't been appropriately priced. The real rate of consumer inflation continues to rise. Offshoring continues rampant. Neither current nor foreseeable tax policy will permit tax-free repatriation. Real unemployment/underemployment/non-employment is very high. People aren't confident, and with the end of summer, everybody will start paying attention again, just in time for the fall elections.

Change will come in some measure, and therefore uncertainty will rise. As uncertainty rises, confidence will diminish, in my opinion.

This sets up for a correction. How big it will be I have no idea, it depends on what exactly happens with QE, the elections, international politics, harvests, etc.--but Q4 is where the "action" will happen. So, I don't know if it will represent a great buying opportunity or not. I am ready, if it does. I have sat out the markets this year, and that hasn't been a problem for me, I am content to wait for a better opportunity.

But the question is, how good an opportunity? Equities and other investments are the province of the well-off, and goods and services marketed to the well-off have risen significantly in price, with some exceptions. As the world saturates, people who are able, will pay more for differentiation, and I include investments in the things that they will buy to this end.

I don't see the prices of luxury goods dropping, in fact they have skyrocketed. Those who buy them still see them as a good value--similarly, those who buy investments at current valuations may well still see them as a good value. When you have 50k to invest and you're making 2% after tax, you've "made" only 1k...but when you have 5M to invest, you're making 100k. The better-off can afford a lower rate of return, and will gobble up assets sold off by those who can no longer afford to own them.

I will not argue the merits or demerits of this phenomenon, I just want to say that I believe that it is happening, and that as a result, the correction may not be so big, and that the market may continue to rise significantly after that correction happens, and that it would take something precipitating a collapse (major or minor) to change that outcome.

Just my 2 cents. DJIA up 68 so far today, with prices (consumer, home, etc.) rising, and yields (treasuries) dropping.

Well, of course there's going to be a correction. That's not much of a prediction.

another all time high today for the SP 500.

Maser, you can keep saying the year is nothing to speak of and finding some index to prove it, but the fact is that the SP 500 is up 8.5% YTD incl dividends. Which is an annual rate of around 15%. Which is a very good 7 months...especially after the bonanza of 2013. Not giving even some of that back is outstanding.

World stocks are up 7.0% with the dividend.

U3O8 wrote:

I told you guys to buy uranium stocks (specifically Cameco) a while back and now you missed your chance. NYSE:CCJ exploded in the past month. Hopefully someone listened.

well ok

Since your post on May 28:

CCJ +9.6%

Uranium ETF (URA): +4.3%

Energy ETF (VDE): +6.6%

US Stocks (VTI): +4.3%

So your generic uranium call merely matched the market and lost to generic energy stocks by a large amount. Nothing to brag about there.

but

Your specific cameco call was a good one.

U3O8 Believer wrote:

U3O8 Believer wrote:

It's time to get in on uranium guys.

China, Japan, Germany are all ramping up nuclear energy. The U3O8 spot price has leveled off. Do it now. Don't wait.

U3O8 spot price up $0.25 and NYSE:CCJ up 4% since this post. Fukishima is gradually going from 'tragedy' to 'historic event', and there's no reason CCJ can't get back to $40/share like it was before the meltdown. Choo choo!

there are your two posts for reference.

I never said that the year would be nothing to speak of, in fact I explicitly stated that I could see something like 3-4% in Q2 and Q3, look back through the thread and you will see this.

Remember also we're talking DJIA here now SP 500 or world stocks.