There was something that came across my desk today that inspired me to create a new word: Republi-Tards. Republi-Tards are traders that bring politics into their market analysis. Their really pompous people that actually think their world view is superior to everyone else.

In this episode I talk more about Republi-Tards and their cousins, doomsday preppers.

Yes, you heard me, these are the herds of people who try and profit from a Night of the Living Dead scenario. Why? Because their one glowstick short of a rave.

Post-Apocalyptic Career

As the economy slowly improves, zombie killers like Alex Jones are going to have a tough time finding a new career and source of income. Fear not, FNMA is the answer so long as you can get over your “everything has just been papered over” delusion. If not, I’m pretty sure McDonald’s will survive the apocalypse. I totally see Alex Jones doing drive-thru.

Disclosure: I just went long FNMA for a long term hold.

The argument you see today about the Federal Reserve and the economy is really nothing more than an age old argument put forth by Rene Descartes.

I’m seeing a lot of talk about the economy being fake and the only reason that stocks have been going up for the last 5 years is because the Federal Reserve keeps pumping money into the economy. The logic goes that stocks going up are really just an illusion created by the Federal Reserve.

This is nothing more than an age on philosophical study called, “The Brain In A Vat” hypothesis. How do you know that you are not really just a brain inside a vat and that everything you see is just an illusion?

In this episode, I use an incredibly simple tool on Finviz to destroy the idea that stocks going up are just an illusion created by the Federal Reserve pumping money into the economy. Thanks to the Edgar system and multi-platform conversion tools, we can actually search through the filings of thousands of companies and show all the ones that have had revenue growth of more than 5% since 2008 when the Economic Crisis first hit.

This lesson will show you how most people are just zombies: they repeat what other people say and don’t actually think for themselves.

After destroying the “it’s all an illusion” argument, I move on to deal with the question of when the Federal Reserve should stop its stimulus. Folks it’s really simple. The market drops 200 points on talk of the Federal Reserve stopping stimulus. This happens because the private sector isn’t strong enough yet for the Federal Reserve to stop. When we talk about the Federal Reserve stopping stimulus and the market does nothing on the news, that’s how you know when it’s time for the Federal Reserve to stop its stimulus.

I find it funny that these CEOs and money managers from the private sector who are responsible for tanking our economy in the first place are now paraded in front of us on CNBC and in the financial media as experts who know when the Fed should stop stimulus. The Federal Reserve will stop its stimulus when the Federal Reserve stops its stimulus and not a day before.

CLICK HERE TO GO TO FINVIZ AND DO A STOCK SCREEN LIKE THE ONE SHOWN IN THIS VIDEO!

CLICK HERE TO GO TO FINVIZ AND DO A STOCK SCREEN LIKE THE ONE SHOWN IN THIS VIDEO!

Cyclical stocks have done a breakout! This is something that we have not seen over the last few years.

In 2010, 2011, and 2012, cyclicals topped and then turned down as the economy slowed down in the summer. This helped make the Sell In May and Go Away and the start of the weakest 6 months of the year very pronounced for these years.

In 2013, not only have we not seen the typical pullback, cyclicals have actually broken above the 2007 high!

This is very bullish for the economy folks. The reason this is so bullish is that cyclicals are economically sensitive stocks that often lead the economic cycle both up and down. The Morgan Stanley Cyclical Index (chart above) is comprised of over 20 economically sensitive stocks like: FedEx, Ford, Citigroup, Caterpillar, Whirlpool, and United States Steel Corp.

Non-cyclical stocks are not economically sensitive because people will buy the products they sell no matter what the economy does. Examples of non-cyclical stocks are things like electricity and toilet paper. No matter how bad the economy gets, people still need toothpaste and toilet paper.

As market analysts, we watch cyclicals because they are a good early read and will lead the fundamental analysis reports released every month on the economy.

In this episode, I talk about cyclical and non-cyclical stocks and the recent breakout on the Morgan Stanley Cyclicals Index.

In this economic analysis, I shine the light on just how wrong the doomsday forecasters like Peter Schiff and some other gold bugs have been over the years.

How To Know When Someone Is a Political Ideologue and NOT a Market Analyst

1. You hear a commentator or journalist refer to the current Democrat or Republican Administration in a negative way. The market doesn’t care about your political biases. If it did, all Democrats or all Republicans would be the best traders and the richest on Wall Street. If it did, you would see campaign slogans like, “Be a Better Stock Trader and Join the Republican Party!” Your political party affiliation has nothing to do with how successful you are as a trader. Both Republican and Democrat traders do equally as well in the market.

2. The so called “market analyst” keeps saying the same things, no matter what the market does. By definition, an analyst analyses the market. The market is always changing and as such a market analysts commentary should always be changing and evolving in response to what the market is doing. A political ideologue is motivated by their politics and not the market. As such his comments never change no matter what the market does. Remember, NOTHING is ALWAYS a good buy or a good sell. Everything goes through bull and bear market cycles. As such, a real market analysts comments should alternate between being bullish on certain sectors and being bearish on others. A real market analyst lets the market guide his analysis.

3. You hear someone say that the Federal Reserve “prints money” to finance QE. The Treasury prints money, not the Federal Reserve. QE is generating bank reserves, not money, because it’s intended to create scarcity (in Treasuries), not liquidity.

4. You hear someone say that the Employment Initial Claims report is fake because claims are only dropping because people have given up looking for work. If that was true, then why have non-farm payrolls been climbing since 2011?

In this episode, I blast away at the crazies on the Internet who masquerade as market analysts by exposing the folly in their cult-hero Peter Schiff.

If you really want to make money trading in the markets, you need to learn how to tune these guys out.

The DOW, NASDAQ, S&P 500, and Russell 2000 are all in strong uptrends! My rating is that the Bulls have a strong advantage over the Bears going into trading next week.

Heavy Institutional Buying Detected On Monday, Tuesday, and Friday

I detected heavy institutional buying on three days last week: Monday, Tuesday, and Friday. The top performing sectors on those 3 days were: Technology, Energy, and Materials. Folks, these are strong offensive sectors!

Why would institutional traders be buying into these offensive sectors at the start of the weakest 6 months of the year for the market if a big market pullback was coming? They wouldn’t.

The U.S. Jobs number for April was better than forecasted. For the past few years, we’ve gotten a economic slowdown in the springs as evidenced in falling jobs numbers. Will this year be different? Too early to know for sure but we are off to a good start.

Both the S&P 500 and the Dow industrials hit record all-time highs for the first time, with the S&P 500 breaking through the 1,600 mark and the Dow briefly surpassing 15,000. The Russell 2000 also hit an all-time high.

Fundamental analysis reports that moved markets last week were Wednesday’s FOMC Meeting Announcement and ISM Manufacturing Index, and Friday’s Employment Situation report.

The Fed essentially kept monetary policy unchanged. The Fed funds target rate remained at a range of zero to 0.25 percent. Importantly, QE3 and QE4 are unchanged with planned purchases of $40 billion per month in mortgage-backed securities and $45 billion in Treasuries.

Strength in details masks what is a headline slowdown for the ISM index to 50.7 from 51.3. Positives in the report are acceleration for new orders, up 9 tenths to 52.3, and a back-to-back build in backlogs at 53.0.

The numbers are still soft but April employment beat expectations and there were upward revisions. Total payroll jobs in April increased a somewhat improved 165,000 after rising a revised 138,000 in March (originally up 88,000). Market expectations were for a 153,000 gain for April.

There are no major fundamental analysis reports scheduled for release next week.

Big earnings announcements to watch next week are:
Monday – Tyson Food
Tuesday – Disney, Electronic Arts, Whole Foods, DirecTV
Wednesday – Wendy’s, Toyota, Activision Blizzard
Thursday – Dish Network, Cablevision, Sony
Friday – True Religion

IF YOU LIKE MY WEEKLY MARKET ANALYSIS, YOU OUGHT TO SEE THE DAILY ANALYSIS FROM MY TEACHER JB! CLICK HERE TO LEARN MORE!

IF YOU LIKE MY WEEKLY MARKET ANALYSIS, YOU OUGHT TO SEE THE DAILY ANALYSIS FROM MY TEACHER JB! CLICK HERE TO LEARN MORE!

Back in October of 2010, I did a video on YouTube called Bonds and Quantitative Easing For Dummies. It has over 58,655 views. I still get compliments on this video today.

The battle line drawn in the sand by the Federal Reserve has been to hold a normalized yield curve.

If you look at the S&P 500 and where it’s at today, you might be tempted to jump on the lame republican band wagon that the market is going to reverse and crash just like it has every time since 2000 when it gets to this level; however, if you really know your economics and the importance of the yield curve, you are not going to make that mistake in your analysis.

It’s amazing at how stupid people are, even CEOs, when they talk about how a major downturn is likely because it has happened before when the S&P 500 was up at the level it currently trades at today.

Comparing the two previous downturns off this level in 2001 and then again in 2008, to the S&P 500 today is like comparing apples to oranges. You can’t make that comparison. If you do, it shows you have no understanding of quantitative easing and how it’s all about holding the normalized yield curve.

In this episode, I’m going to look at the economy and the market from both a fundamental and technical perspective and show you how anyone comparing the S&P 500 today with 2001 or 2008 is an idiot.

IF YOU LIKE MY MARKET ANALYSIS, YOU OUGHT TO SEE MY TEACHER JB! HE’S ON A HOT STREAK RIGHT NOW!

IF YOU LIKE MY MARKET ANALYSIS, YOU OUGHT TO SEE MY TEACHER JB! HE’S ON A HOT STREAK RIGHT NOW!

There was some major honey badger pwnage today on Wall Street. All that happened today was that a bunch of scared traders who watch the news way too much got shook out of their long positions on a rumor, while the honey badgers stepped in and bought up the bargains and burped in the scared traders face to boot.

A freaking lie got them to sell for a loss while buyers snapped up the bargains. The carnage was over in just 4 minutes. How embarrassing.

Most people listen to way too much negativity and as a result are wound up way too tight. Turn off your stupid AP twitter feed because you just got pwned today.

In other stupid news, Apple just announced it will have to start buying investors to keep their stock from falling further. I have nothing against buying investors. A company has got to do what it has got to do. My beef is that Apple only now is moving to shore up the stock after it’s already fallen 40% from its high? They sat on a $140 billion pile of cash and watched their stock fall 40% before actually deciding to take some of that money to shore up its stock? They should have taken action 9 months ago before the company lost 40% of its value.