Sisterly Love

Written by Sherri Hicks

Last summer my sister and I moved to New York from the sweltering Miami. Her job in the fashion industry brought her to the city that never sleeps and I thought I’d just quit my barista job and tag along. We had it all planned out, live in a shoebox, sleep in the same bed, keep the ceiling fans running and windows open to save on our power bill, and cook every night so we can spend money on fancy dinners on the weekends. It seemed like the perfect move towards sisterly bonding. However, three weeks into sweating in our sleep, we decided the fans weren’t cutting it. I broke down on a Monday afternoon in July and looked upHttp://NEWYORKenergyrates.com to get the AC crankin’. Ceiling fans in 90 degree weather wasn’t our only fail. Turns out, Sarah kicks in her sleep. I didn’t get a restful night for six months and we finally decided it was time to give in. We splurged for a two-bedroom uptown and have never looked back. Of course, we don’t exactly eat fancy dinners on the weekends. Unless roast beef instead of PB&J counts.

Third Quarter a Stinker for Stocks; NASDAQ, SP Down 14%

The Markets

The third quarter officially ended today on September 30, and, unlike the usual quarter-ending, window-dressing ramp job, stocks suffered through their worst day of the week, in a month and quarter that was one of the worst of recent memory - and there have been some bad ones, recently.

The Dow Jones Industrials ended the quarter off more than 12%. The S&P and NASDAQ were rocked lower by 14%.

In simple terms, anybody in an index fund with $100,000 at the end of June, now has somewhere between $86,000 and $88,000. That may not sound like much, but $12-14,000 is roughly equivalent to the wages for a minimum-wage worker for a year. That's not a good sign for the bottom income earners in American society, because it means that the "wealth creators" so often cited by Republican office-seekers, have one minimum wage job less than they can create, should they now choose to part with some of that hard-earned (and easily lost) cash.

On the day, stocks started lower, stabilized, but fell off a veritable cliff into the close. There was no window dressing, no PPT push, no ETF re-balancing or anything to keep stocks afloat into the close. Nobody seemed willing to take significant positions in stocks, even though the 4th quarter is historically the best for stocks. The levels of gloom and doom rival those of the disastrous 4th quarter of 2008, when the global financial crisis was first realized and stocks gyrated lower and lower and lower.

Not only were stocks affected negatively during the month and quarter, but most commodities also fell by extraordinary percentages, especially gold and silver, which were whacked roughly 16 and 25% respectively. There was no place to hide for even the most conservative investors. Yields on Treasuries fell like rocks off a precipice. Bond yields for the 2-year, 5-year and 10-year note fell 40-45% in the quarter. The benchmark 10-year note closed out the quarter at a yield of 1.90%. The 30-year bond was the best performer of an ugly bunch, with yields falling only 35% since the end of June.

Crude oil was down 17% in the quarter, though gas prices at the pump have barely matched the decline. With gas prices nearly $4.00 a gallon at the beginning of summer, the average price - if 17% is the expected decline - should be around $3.35, though the AAA Fuel Gauge Report has the national average at $3.44. For perspective on how high real gasoline prices are, the price at the same time last year was a celebratory $2.69.

In company news, Eastman Kodak (EK), once a proud member of the Dow 30, fell 54% on the day amid reports that the company had hired the law firm Jones Day to discuss reorganization plans or a bankruptcy filing. Shares of Eastman Kodak dropped 91 cents to close at 0.78, an historic low.

Bank of America (BAC) plans to begin charging debit card users a $5 monthly fee in January, 2012, due to changes in the amounts banks can charge merchants per debit card use. BAC finished the day 23 cents lower, at 6.12.

Big corporate bankruptcies are dead ahead, likely to commence in the fourth quarter and accelerate through the first three quarters of 2012. Third quarter earnings reports kick off on October 11, when Alcoa (AA) reports after the bell.

Thank goodness for the baseball playoffs and football. Yeesh!

Dow 10,913.38 240.60 (2.16%)
NASDAQ 2,415.40 65.36 (2.63%)
S&P 500 1,131.42 28.98 (2.50%)
NYSE Compos 6,791.65 183.26 (2.63%)
NASDAQ Volume 2,081,539,875.00
NYSE Volume 5,323,945,500
Combined NYSE & NASDAQ Advance - Decline: 1442-5118
Combined NYSE & NASDAQ New highs - New lows: 31-515 (look out below!)
WTI crude oil: 78.65, -3.47
Gold: 1623.80, +7.90
Silver: 29.94, -0.73

Bull Trap Has Been Set for US Stock Investors

The Markets

If you're like a lot of people, confused by the volatility of the stock market and the herky-jerky, up-down pattern that has persisted for over two months, you are not alone. Most people simply have given up on stocks and may take a look at their 401k or investment plan statement from time to time, but the day-to-day fluctuations are simply too severe and too random for anybody to really get a grasp on what's going on with stocks.

Fear no more, because Some technical analysis and a couple of definitions from Investopedia explain the condition to the letter. After studying the pattern, it is clear that what we have been experiencing is nothing more than a Bull Trap with a series of Fakeouts built into it.

Using the Dow Jones Industrials as a guide, we know that after the initial decline from 12724 on July 21 to 10720 on August 10, a loss of 2000 points in just 14 sessions, the Industrials have generally traversed a range from 10733 to 11613, a mere 900-point range which the markets cannot seem to penetrate either on the upside on downside. In other words, it's been hovering - up and down - closer the bottom, setting up the classic Bull Trap and offering a series of fakeouts when in an uptrend, only to collapse.

One can take the news of world financial events at face value or ignore them at this point, because unless something truly extraordinary occurs, the global financial conundrum won't matter to the market, as the trap has already been set and the next move will be lower, below the range and below 10733, probably down to 10200 or 9400 before it's finished.

Of course, the timing is everything, and this sideways trading could continue for a few more months or the final breakdown could happen over the next few weeks. It will appear as if the world is coming to an end, but it won't be, as there will still be at least 9000 Dow points underneath as a base. Those caught buying in here will be hung out to dry, with lots of overhead resistance, trapping them into losing positions for six months to possibly a few years, depending on which individual stocks one has bought.

So, the correct strategy at this point is to short near the top of the range, or the middle, but be prepared to wait. Options players may be interested in long-dated, out-of-the-money naked puts on the Diamonds (DIA), which tracks the Dow. A tiered strategy starting in November, December or January may be the best way to go, depending on one's own risk appetite.

That's all for today, some food for thought, as stocks finished in a very diffuse manner again, though in reality it was nothing but another failed rally.

Dow 11,153.98, -143.08 (1.30%)
NASDAQ 2,480.76, -10.82 (0.43%)
S&P 500 1,160.40, -9.34 (0.81%)
NYSE Compos 6,974.91, -97.97 (1.42%)
NASDAQ Volume 2,329,045,750
NYSE Volume 5,151,046,000
Combined NYSE & NASDAQ Advance - Decline: 4292-2216
Combined NYSE & NASDAQ New highs - New lows: 15-367 (still screaming SELL)
WTI crude oil: 82.14, +0.93
Gold: 1,617.30, -0.80
Silver: 30.52, +0.39

Stocks End Three-Day Win Streak; Shopping the Dollar Stores

The Markets

Another day passed by without Europe imploding from excessive debt and they're still drinking plenty of Ouzo over in Greece, even as the country dives into desperation and poverty.

The economic climate hasn't much bothered the titans of industry and banking who populate the environs of Wall Street, but maybe the lingering doubt and uncertainty over economic issues is starting to get to them a little bit. Days like today show the strain a long, drawn out economic slide can have on markets. Stocks and indices don't just do straight down in a day or two; bear markets, like all good things, take time and patience to play out and this current one, which started just a few short months ago, looks to have a lot of downside over many months ahead.

There was little in the way of news concerning the global powers and their attempts to deal with the continuing crisis. No mutterings of sentiment from the ECB or Angela Merkel or French president Sarcozy. Even our own President Obama was pretty hushed up, and for him, that's saying something.

It was like the Harry Potter movie when they speak about "he who shall not be named"; nobody was interested in talking about the economy any more, but it surely was on the minds of traders, who sold off everything as the market entered the home stretch, making all the talk about a bounce, or end of quarter window dressing sound a little foolish.

Perhaps it was just more old-fashioned profit taking, by those who know that it's best to get out of the way of oncoming trains, like the one coming when third quarter earnings reports begin to hit the Street.

Whatever it was, stocks took a pretty solid body blow and after enough of these, with conditions still uncertain or deteriorating, volatility high and the leaders of the civilized world unable to get themselves and their banker buddies out of the mess they created, stocks and indices will stay down, move lower and not recover for a long time.

The happy part is that there will then be bargains galore amid a stock pickers paradise. Good companies will fall alongside bad ones, and prices will be so cheap and the competition so slim, that bargains stocks will appear all over the market.

All that has to happen is for the political leaders and global banking interests to make a few more policy mistakes and WHAM! stocks will be hit with the same ton of bricks that have already shuttered hundreds of thousands of small businesses around the world. Money will be scarce, people scared and unsure and institutions and governments will tumble.

Start making plans now, because this great drama of economics is playing out in the present and conditions for it getting really ugly are already in place.

Have faith in the bankers and politicians. They've screwed up before, and they're certain to do so again.

Dow 11,010.90, -179.79 (1.61%)
NASDAQ 2,491.58, -55.25 (2.17%)
S&P 500 1,151.06, -24.32 (2.07%)
NYSE Composite 6,876.94, -166.18 (2.36%)
NASDAQ Volume 1,912,622,750.00
NYSE Volume 4,787,752,000
Combined NYSE & NASDAQ Advance - Decline: 1179-5322
Combined NYSE & NASDAQ New highs - New lows: 16-231
WTI crude oil: 81.21, -3.24
Gold: 1612.00, -37.70
Silver: 29.96, -1.92

Idea: Shop Dollar Stores for Big Savings

We all know people who refuse to shop at, say, Wal-Mart, in the belief that they are somehow superior to the rest of the inhabitants of the planet and the low-cost experience is "beneath them."

When the economic tsunami blows through their part of the world, they'll likely be unprepared to make do with less or reconfigure their lifestyle to accommodate the new financial realities. For the uninhibited types and those without pretensions, there is life after Sak's, the GAP and JC Penny's and it can be found at strip malls and shopping centers around the country. They are known as dollar stores, where everyday items are sold at a discount, every day.

In case you missed it, Wal-Mart doesn't really promote their "lowest price" guarantee much any more, and that's because they're often not the lowest. The dollar stores - particularly Dollar Tree, Dollar General and Family Dollar - crush Wal-Mart and all other competitors on general merchandise all the time.

Whether it's laundry detergent (you do wash your own clothes, occasionally, no?), tomato juice (who doesn't love a good Bloody Mary?) or sunglasses, you can find good deals ($1 is good no matter what it is.) at these bustling retail establishments, plus hundreds of everyday items from cookware to spices to party and gift ideas to personal grooming products and much more.

Now, you can go to Home Depot and spend $2 to $3 for a roll of duct tape or buy two or three rolls of comparable quality for the same price. You can buy your snacks and chips at the local supermarket chain for $1.79 and up, or find the same selection for less at any of the dollar stores. These places are popping up all over the place.

In fact, Family Dollar plans to open 450-500 new stores in the coming twelve months. The others are expanding at a steady clip, even in this down economy. These companies have found a niche market that will only get bigger as the economy deteriorates and will hold their own in any economic environment, because there are always going to be people who will seek out bargains.

Bankruptcy Can Happen to Good People

In today's economic environment, it's difficult for average Americans to make ends meet, no matter what line of work you're in or how frugal your home life has become. Prices for essentials, such as food, heat and utilities, gas and rent have either stayed high or gone higher during the current three-year financial meltdown.

Sometimes, people try their best, but still can't pay all their bills, either because of the lack of employment, divorce or health issues (one of the leading causes of financial stress) and have to take the last resort, bankruptcy.

If you've never been through the bankruptcy process, it can be frightening and embarrassing, though it doesn't have to be either. Bankruptcy laws were put on the books in America many years ago, with the intention of giving people a fresh start.

The first step - after you've determined that your current condition isn't sustainable - is to find good representation, like a solid Omaha Bankruptcy Attorney, who can guide you through the myriad of rules and explain the different types of personal or business bankruptcies.

A competent Nebraska Bankruptcy Lawyer can help you understand your rights under Chapter 7, 9, or 11 of the bankruptcy code without making you feel as though you've failed or done something wrong with your life.

Bad things happen to good people all the time, and lawyers who understand life and the bankruptcy code can guide you to a better situation with the knowledge and skill only trained professionals can provide.