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Instablog – Updates of Dow 30 Industrial Companies & Gold / Silver / Crude Oil / U. S. Dollar - - From My SeekingAlpha.com Articles and my SafeHaven.com Course of Study: April 9nd.

|Includes: Apple Inc. (AAPL), MCD, MRK, MSFT, PG, VZ

Instablog – Updates of Dow 30 Industrial Companies & Gold / Silver / Crude Oil / U. S. Dollar - - From My SeekingAlpha.com Articles and my SafeHaven.com Course of Study

 

Date:  April 9, 2011

 

Introduction

 

Companies and Indexes for this week:  AAPL, VZ, MRK, PG, MSFT, MCD, $GOLD, $SILVER, $WTIC, $USD.

 

In my effort to become acquainted with serious investors, who may be looking for or perhaps would consider, ( as an alternative to mutual funds and / or stock brokers )  a 50+ year profitable - professional financial analyst / asset manager - I am providing:

 

*   This weekly flow of information and data - - with recommendations.

 

*   A flow to you of  my private Emails of on going identification of – Inflection Points and specific Securities Recommendations. 

 

Please let me know – if you are interested - by sending me an Email with just a bit of information about yourself and your investment objectives.  This offer is definitely / exclusively being made available -  for a limited time -  to Serious Investors.  There is no obligation and it is totally free – but it is important to me that you understand my requirement for followers, and prospective clients is that - you “communicate” with me, one on one!

 

As you likely already know I am slowing down my flow of articles with a focus on company fundamental valuations.  I have written over 50 articles covering many companies – so far – but it requires too much time (as well as other reasons) to do a proper job.  You may want to review some of these efforts in my archive? 

 

The information and data within these (getting old) articles and this weekly missive are backed by my “Three Pillars” of Investing Wisely.  They are: My Rotation Model, My SHB Cycle and My Inflection methodology.  In my analytics, I also use a highly disciplined / weighted fundamental (40%), technical (35%) and consensus (25%) analysis.   (please see below for URLs that will help explain this “stuff”)

 

In addition I am providing SafeHaven.com a weekly Course of Study focused on the Dow Jones 30 Industrials.  It is quite similar to this missive.  To view my most recent Course, an Investment Basics Course and my bi-monthly Commentary / Update - -  please click on the below URL – and view my Archives:

 

http://www.safehaven.com/author/489/steve-bauer

 

 


 

In the below tables there is an update of this week’s grouping of 5  ‘valuated’  eg. - Dow 30 Industrial companies plus Apple, Inc. with brief Comments and Current Recommendations.  You will also have my technical perspective of the four above mentioned Commodities.

General Market – Current Perspective

The general market is currently over-valued, over-bought and is showing serious signs of deterioration, especially in the area of breadth.  Interest rates are on the rise, and inflation is becoming and will be a serious problem.  This means, with regard to your portfolio - you might consider moving to and holding cash or perhaps if you are a more proactive investor, begin taking bearish positions. I would not recommend taking short positions in these five securities - there are much better (bearish) candidates to consider with equally low or lower risk. 

This means that in time frames like we are currently experiencing, the risk / reward ratio of owning common stock or mutual funds is not what I consider “Investing Wisely.”  If you disagree with this and are not willing to share with me your opinions, I strongly suggest that you do not follow my work / analytics.  For me, holding cash until the risk / reward ratio is totally in my / your favor - is a basic philosophy for investors and unthinkable for traders.

My analytics is on a crescendo towards a “Breadth” Bearish Inflection Point.  That could well happen next week.  It may have done so on Friday.  This coming few days will either confirm or reject a Bearish turn in the marketplace.

Note:  The above paragraphs and words do not change very much - week by week, but when they do I recommend you remain alert!  Changes are in italics and bold.

Companies – Current Perspective

 

Apple, Inc:  for those of you who follow my work/analytics closely – you know that I focus much of my effort on Comparative Analytics.  AAPL serves that purpose very well – it is my - Numero Uno!

 

Symbol

Category

Fundamental

(weighting 40%)

Technical

(weighting 35%)

Consensus

(weighting 25%)

 

(NASDAQ:AAPL)

Bellwether

Excellent

Very Good to Excellent  - -   (deteriorating)

Excellent

 

Comments:   Apple remains in a strongly ascending trend and has both momentum and relative strength working for it.  I do believe it is in a topping formation.  This a very critical time frame for making investment decisions – including Apple, Inc.  The question is for AAPL and for most all securities is:  Hold through a pullback or sell and perhaps re-buy?  The probabilities are very high that a General Market / Apple bearish inflection point will occur very soon and I believe you should be preparing to make this decision.

 

Special Note for those of you who have been or are “attack soldiers” and feel an obligation to criticize my very successful methodology of Investing Wisely:

 

Please understand that the purpose of including AAPL each week is to remind you that it is a fantastic “Bellwether” and more important it is a model company.  So, comparing Apple to these Dow 30 Industrial companies (for some of you) is like comparing apples and lead sinkers or worse.  Keep in mind that many companies are in the process of rotating into a comparable level to Apple and that when they do, they are like Apple, worth owning during bullish time frames.  Few companies do match up with AAPL - but when they do, (or come close) believe me, they are ‘worth owning.’ 

 

I suggest you remember that from time to time Apple turns unfavorable (look at a long- term chart) and when that happens, I believe, it is best to sell and re-buy.  At this “re-buy” time the ‘other’ companies that I mention above that have ‘rotated’ into favor along with Apple should be the ‘other’ companies you also buy.  

 

Thanks for reading this special note    I am totally pissed at the general readership / self appointed critics of SeekingAlpha.com and it is the same for most every other financial blog.

 

Understand that as the General Market / Sectors / Industry Groups “Rotate” in and out of favor – Bullish to Bearish and then back again to Bullish – I believe there are time frames that it is best to hold Cash.  This is one of those time frames.  However, for more proactive investors you should have or begin to take bearish positions in highly selective securities.

 

 

 

 

Grouping Five: (see below for a list of the six groupings of five - Dow 30 Industrial Companies.)

 

Symbol and Current Numeric Ranking within the Dow 30 Industrials

Category

Fundamental
(weighting 40%)

Technical
(weighting

35%)

Consensus
(weighting 25%)

 

(NYSE:VZ) Ranked: # 5

Bellwether

Good

Very Good

Good

Comments:  Currently, at $30.6 –

 

The theme, this week is the same as last week,  for these five companies – and that is - that the information that you read in the “sources” below is Very Inconsistent and my analytics / valuations. This is particularly true when working with the enormous spread of information and date propounded by financial analysts.  This is a major problem with investors who cannot read between the lines.  Consensus analysis is the worst by far, so be careful when you think you have found a company that fits into my “Bell Curve.”

 

You will note that Verizon is currently carrying  a rather high Ranking against its Dow peers. ( please remember my strong emphasis on owning companies that are within the top 5% on my ‘Bell Curve’  --  if you compare the performance of CAT # 1. with say MRK #25.  and other low rated Dow 30 companies you will understand.  Next year, earnings' growth will fall back just a bit but will remain strong.  The company is like Telephone currently under heavy accumulation.  (I can explain that to you privately if you ask)  Fundamentally, there appears to be consolidation of the recent growth, and I am not impressed with the longer-term. This week I suggest you look at the PEG – currently negative for VZ, but will improve.  Can you answer the question of WHY?   Technically, it looks like it is going to the moon, but that is highly unlikely.  However, it definitely remains a hold.  Consensus wise, it is only “good.”

 

(NYSE:MRK) Ranked: # 25

Bellwether

Good

Good

Very Good – but not deserved.

Comments:  Currently, at $33.3 – I suggest the company will improve but will remain one that will move, even close to the top of Ranking list against its Dow peers. Remember, this is again a “DOW” company that will produce very conservative ‘numbers’ as compared with other pharmaceutical (Non-Dow) companies. I see yet another pullback in price on the near-term horizon.   Fundamentally, clearly MRK deserves its low ranking and my disapproval of its management style. Earnings will improve dramatically but that currently has not been reflected in its price action.  That offers a major fundamental concern to me.  What about you?  Take another look at MRK’s PEG – currently very high  but will improve.  Can you answer the question of WHY?   Technically, it looks like it has  topped.  The risk / reward factor for owning MRK is not good.  I would sell at the top of this current bounce. Consensus wise it is “very good.”  And that is unexplainable by this old Prof.

 

(NYSE:PG) Ranked: # 22

Bellwether

Good

Very Good

Good

Comments:  Currently, at $62.1 - the company has been in the 60s three times over the past ten months.  If owning a company like PG is how you think investing should be pursued, then I suggest you stop reading this investment course.

 

Fundamentally, This year, earnings' against next years earnings’ are improving but not earnings' growth for the coming few years.  Remember, JNJ like KO and PG are Dow components are very slow movers and definitely designed for a conservative investor.    Technically, on a more near-term basis Proctor & Gamble is looking tired and not moving in the direction of a new high. Is there more life in it for the near term? My work says no.  My asset management says – it is just not a competitive investment.  In 1999 it peaked at nearly $50 and dropped to $22 within a year.  It then moved to a high in  2008 of $68 – then pulled back to $43.  Again this is pathetic performance, but not as bad as other Dow components.   Consensus wise it is currently not one of the strongest.  You should know that Consensus Analysis is very important but often not all that accurate (and that is an understatement)!  The financial analysts have their favorites and are paid to say good things about – companies that are - undeserving.  Think about that.

 

(NYSE:MCD) Ranked: # 18

Bellwether

Good

Good

Good

Comments:  Currently, at $76 – it sold for $79 in December.  The recent mini-bounce is not impressive.  The company looks healthy for a big Consumer Services company.  I dislike the stock and I dislike their hamburgers.  I live where they just put in a franchise, and that makes me sick.

 

Fundamentally, I do not like McDonalds for the longer-term.  The forward earnings’ growth is flat and that is all you can expect from a company like this.  Technically, it looks strong but be careful.  I see a further pullback in the making.   Consensus wise (and like so many companies in the Dow) the “Street” and its financial analysts are not doing an accurate job for you to follow their information and data – that is not a positive situation!

 

(NASDAQ:MSFT) Ranked: # 27

Bellwether

Very Good

Very Good

Very Good !

Comments: Currently, at $26.2 -  At this time, it is Ranked rather low by me and most everyone else, and I believe that is an accurate assessment. Fundamentally, MCD is going to fall back in its earnings from the lofty figures posted more recently.  It is doing a good job of telling you that in its recent price action.  I would point out that the longer-term picture (20 years or so) the company had gone nowhere.  Technically, in 1999 it was at $46 per share, by 2002 it had dropped to $17 per share.  The price recovered to $34. per share by 2007 and then fell again to $14 in 2009.  Currently, Microsoft has only come back to the high twenties per share.  These figures are pathetic.  For those who own MSFT, I offer my sympathy and suggest that if you are a “Student” of the market you should know better than to participate with this historic performance.  The Consensus (this is a blatant misrepresentation of the data provided to financial analysts and their presentation to you and I)   The picture offered by the “Street", and its financial analysts are not doing an accurate job for you to follow their information and data – that is not a positive situation!  Sound familiar, well you will hear more about this as I guide you through these 30 companies.

In my ‘Longer Version I have five (rather detailed) Notes: Again, click on the above URL to visit my last ‘Longer Version’ of this Course of Study.

You can find all Dow 30 Industrial Companies and a number of other supporting Bellwether and High Profile charts amongst the 100 or so in:

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID4095527

The Prof's Six Groupings of the Dow 30 Industrials

Grouping One: BAC, CSCO, GE, BA, XOM
Grouping Two: HPQ, AXP, KFT, TRV, CVX
Grouping Three: CAT, HD, KO, DIS, DD
Grouping Four: T, IBM, JNJ, AA, JPM
Grouping Five: VZ, MRK, PG, MCD, MSFT
Next Week  --  Grouping Six: PFE, , MMM, UTX, WMT, INTC


Commodities - Current Perspective

Four for focus:  These four commodities are offered in order to compare their on going analytics with that of the Dow 30 Industrials.

This presentation each week will be a simple update of the Technical picture. Fundamental and Consensus Analysis is much too complex to present in this format.  However, understant in order to invest wisely in an appropriate ETF or Company the work / analytics is much the same as for any common stock.

 

Symbol and Name

Category

Fundamental
(weighting

40%)

Technical
(weighting

35%)

Consensus
(weighting 25%)

 

Gold  ($GOLD)

Bellwether

Very Good

Excellent

Very Good

Comments:  Currently, at $1,458., Gold is and has moved up strongly and has been a leader since late 2008.   Current Technicals:   It looks like it is topping but may just keep doing its thing.  If you were worried during the January 2011 pullback you can expect yet another, but a likely and perhaps more severe pullback in the coming weeks. Until Gold experiences a meaningful pullback, and then clearly fails to successfully test the previous highs, it is likely a hold.  However, looking at the near-term and not wanting to “experience a meaningful pullback” – I suggest that prudence says that if Gold will not break-out strongly that it is a sell.  Students and investors alike should develop an exit strategy.  Few, ever even consider this as part of their investment philosophy.

 

Silver  ($Silver)

Bellwether

Very Good

Excellent

Very Good

Comments:  Currently, at $39.6., ( Gold & Silver track each other very well historically) Silver is and has moved up strongly and has been a leader since late 2008.   Current Technicals:   It looks like it is topping but may just keep doing its ting.  Until Silver experiences a meaningful pullback, and then clearly fails to successfully test the previous highs, it is likely a hold.  However, looking at the near-term and not wanting to “experience a meaningful pullback” – I suggest that prudence says that even though Silver has broken out on the upside while Gold has yet to do so that the longer-term performance for Silver will continue to track Gold both in a bullish manner as well as a bearish manner.

You might want to consider that while Silver has out performed Gold on the more recent upside that – Silver may just do the same on the downside.

I suggest you re-read the above Comments on Gold.

 

Crude Oil  ($WTIC)

Bellwether

Very Good

Very Good

Very Good

Comments:  Currently, at $110.5., Crude Oil is tracking Silver and the above is also applicable to this commodity.

I suggest you re-read the above Comments on Gold.

 

U. S. Dollar  ($USD)

Bellwether

Very Good

Very Good

Good

Comments:  Currently, at $75.6., at this time there is nothing to lead one to believe that the Dollar will be turning up – however!.  Current Technicals:   it is still in the range of the November lows and there is a possible technical scenario that would say that a turn-up is in the making.  That turn-up could well be coincident with a turn-down in the General Market.  In other words - a possible rally in the U. S. Dollar and a pullback in the General Stock Market?

Stay alert, this could be a very interesting study / scenario for both students and investors.

You can also find all these Commodities and a number of other supporting Bellwether and High Profile charts amongst the 100 or so in:

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID4095527

 

Source information and data:

Yahoo Finance
MSN Money
MorningStar
BarCharts
StockCharts
Nasdaq.com

You can also find all these Commodities and a number of other supporting Bellwether and High Profile charts amongst the 100 or so in:

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID4095527

Notes for the above Tables:

Note One:  While I cover my Three Disciplines, Fundamental, Technical and Consensus analysis, my focus for these updates is primarily technical.  It’s the WHEN that is so very critical in this market, and I have given you the WHAT in my SeekingAlpha.com articles and above.   Selectivity is also an essential for investing wisely, but rather easy if you will use the “Three Pillars” of my Methodology.  I continuously monitor the fundamentals and consensus status of these and many more companies, sectors and industry groups.  As a mini example, please see my Public List in StockCharts of about 100 companies listed alphabetically by my two categories of securities - Bellwether and High Profile.  Use this URL:  Click here and scroll through them.

Note Two:  When these three disciplines are Excellent to Very Good they become Candidates for Buying and when they are Poor to Very Poor they become Candidates for Short Sale.  There is always rather large number of companies in both categories, but I wait for clear, bullish or bearish Inflection Points to be sure.  You might want to think of these comments in terms of a slot machine.  When my ‘Three Disciplines’ have 3 bars of Excellent / Very Good – it’s a bullish Jack Pot!  Strangely enough to some investors, when I have 3 lemons of Poor to Very Poor – it’s a bearish Jack Pot!

Note Three:  Within this missive I stop short of providing specific recommendations.  If you are interested in a more specific dialog please let me know.  Just so you know, I will work with you for a time if you currently are seeking or believe you may have in the future - interest in my professions asset management / consulting / mentoring services.

You can find my specific article for these securities by going to search and my name in SeekingAlpha.com.

 

There is more supporting information about my work / analytics in the following URLs:

 

My Personal / Private Blog  --  Investing Wisely:  (Introductory Information about my Investment Methodology)

 

http://twitter.com/InvestRotation

 

Three articles supporting my “Three Pillars” of my Investment Methodology that you may want to read:  (the title for each is at the end of the below URLs)

 

https://seekingalpha.com/instablog/121308-steven-bauer/119898-my-rotation-model-a-short-explanation

 

https://seekingalpha.com/instablog/121308-steven-bauer/120955-my-shb-cycle-a-short-explanation

 

https://seekingalpha.com/instablog/121308-steven-bauer/104062-inflection-points-a-short-explanation

 

 

If you would like an opinion on securities in your portfolio and you are a serious investor, please feel free to Email me with your request.  I would appreciate your first reading my Bio. in SeekingAlpha.com to be sure we are at least a little bit compatible.  Use this URL for my Bio and other information:

 

https://seekingalpha.com/author/steven-bauer

 

Please understand that I do not read and thus do not reply to anything coming to me from the SeekingAlpha.com – Message Board or Comments on my articles.  I also will not read or respond to what I consider to be negative, brief or demanding language from any perspective or any source.  Please use my Email Address to open a positive dialog.

 

Thanks for your interest in my work / analytics and possible my professional services.

 

Steven Bauer,  Ph.D.

 

My Email Address:  senorstevedrmx@yahoo.com