ColinTwiggs, Author at the patient investor

April 30, 2014

S&P 500 follows through

S&P 500 follow-through above short-term resistance at 1880 strengthens the case for an advance to 1950. Breakout above 1900 would confirm. A 13-week Twiggs Money Flow above zero would signal long-term buying pressure. Reversal below 1850 is unlikely, but would warn of a test of primary support at 1750.

S&P 500

* Target calculation: 1850 + ( 1850 – 1750 ) = 1950

CBOE Volatility Index (VIX) below 14 indicates low risk typical of a bull market.

VIX Index

Nasdaq 100 breakout above 3600 would suggest a fresh advance. Follow-through above 3750 would confirm, offering a target of 4000*. Recovery of 13-week Twiggs Money Flow above zero would also be a bullish sign, while respect of resistance at 3600 would be bearish.

Nasdaq 100

* Target calculation: 3700 + ( 3700 – 3400 ) = 4000

The primary trend is upward and none of our market filters indicate elevated risk.

April 30, 2014

Challenging Putin’s Values | NYTimes.com

Thomas L. Friedman’s opinion at the NY Times:

…….Ukraine is not threatening Russia, but Ukraine’s revolution is threatening Putin. The main goal of the Ukraine uprising is to import a rules-based system from the E.U. that will break the kleptocracy that has dominated Kiev — the same kind of kleptocracy Putin wants to maintain in Moscow. Putin doesn’t care if Germans live by E.U. rules, but when fellow Slavs, like Ukrainians, want to — that is a threat to him at home.

Don’t let anyone tell you the sanctions are meaningless and the only way to influence Russia is by moving tanks. (Putin would love that. It would force every Russian to rally to him.) If anything, we should worry that over time our sanctions will work too well. And don’t let anyone tell you that we’re challenging Russia’s “space.” We’re not. The real issue here is that Ukrainians, as individuals and collectively, are challenging Putin’s “values.”

We couldn’t stop them if we wanted to. They’ve been empowered by globalization and the I.T. revolution. Get used to it, Comrade Putin.

April 30, 2014

Is Israel an Apartheid State? | Bloomberg View

Congratulations to Jeffrey Goldberg for this opinion on John Kerry’s statement:

I will dissent from Boxer’s critique, both because I believe that Kerry is a pro-Israel secretary of state who worries about the Jewish state’s future, and because I myself have used the word “apartheid” not only to describe a possible terrible future for Israel, but also as a way of depicting some current and most unfortunate facts on the ground…….

I suppose this passage makes me an enemy of Israel, in the same way Kerry is an enemy of Israel, and in the same way that the former Israeli Prime Minister Ehud Barak (who is also Israel’s most decorated soldier) is an enemy of Israel, because Barak has also warned about the dangers of the status quo: “As long as in this territory west of the Jordan River there is only one political entity called Israel,” he said in 2010, “it is going to be either non-Jewish, or non-democratic. If this bloc of millions of Palestinians cannot vote, that will be an apartheid state.”

A two-state solution (the apartheid government in South Africa called them “bantustans”) will never resolve the conflict. Israelis face some hard choices.

April 30, 2014

No Alan, more income tax is not the answer | MacroBusiness

Leith van Onselen comments on Alan Kohler’s support for a proposed debt levy:

The first best solution is to shift Australia’s tax base away from productive enterprise (both individuals and companies) towards more efficient sources, such as land, resources and consumption. According to the Henry Tax Review, the marginal excess burden (i.e. the loss in consumer welfare relative to the net gain in government revenue) from the GST is just 8%, whereas it is near zero for taxes on land and resources. They also compare very favourably against the two biggest current sources of tax revenue – personal income tax (24% marginal excess burden) and company taxes (40% marginal excess burden) – offering the nation large productivity pay-offs from fundamental tax reform.

April 28, 2014

Medium-term selling pressure but long term bullish

Summary:

Medium-term selling pressure is strong, warning of a secondary correction
But the primary trend is up and VIX remains low
Long-term prospects remain bullish

The S&P 500 continues to encounter resistance at 1880 and bearish divergence on 13-week Twiggs Money warns of medium-term selling pressure. Breakout above 1900 would signal a primary advance, but a secondary correction is more likely. The primary trend, however, remains upward.

S&P 500

VIX below 15 continues to indicate low risk typical of a bull market.

S&P 500 VIX

The Nasdaq 100 displays stronger selling pressure on 13-week Twiggs Money Flow. Respect of resistance at 3600/3650 would be cause for concern, breach of support at 3400 completing a head and shoulders reversal with a target of 3100* at the primary trendline. Recovery above 3750 is unlikely at present, but would offer a target of 4000.

ASX 200

* Target calculation: 3400 + ( 3700 – 3400 ) = 3100

April 26, 2014

How marijuana use among teenagers can affect brain development | The Economist

From P.H. at The Economist:

Hans Breiter, a professor of psychiatry and behavioural sciences at Chicago’s Northwestern University, worries that the rush to promote recreational use is reckless, and that not enough thought is being given to the balance between costs and benefits. In a study published today in the Journal of Neuroscience, Dr Breiter and a group of researchers from Northwestern, Massachusetts General Hospital and Harvard Medical School found that the size, shape and structure of parts of the brain are changed in teens and young adults who smoke weed as little as once a week. Earlier studies have focused only on tetrahydrocannabinol (THC, the main psychoactive component of pot) affects the brains of animals or intensive, dependent human users—and found evidence of impaired learning, memory, attention and decision-making. But those studies did not consider the effects of casual use.

April 26, 2014

Fractional reserve banking: ‘the chief loose screw’ | House of Debt

By Atif Mian and Amir Sufi quote from The Chicago Plan (1933-1939) of which Irving Fisher was a strong supporter:

“A chief loose screw in our present American money and banking system is the requirement of only fractional reserves behind demand deposits. Fractional reserves give our thousands of commercial banks power to increase or decrease the volume of our circulating medium [money] by increasing or decreasing bank loans and investments. The banks thus exercise what has always, and justly, been considered a prerogative of sovereign power. As each bank exercises this power independently without any centralized control, the resulting changes in the volume of the circulating medium are largely haphazard. This situation is a most important factor in booms and depressions.”

April 26, 2014

Ukraine: An energy war based on gas pipelines [video]

April 26, 2014

Mindset of WWII German Soldiers | Sonke Neitzel

Vivid, sometimes chilling descriptions of the life of German soldiers during World War II brought to life in secretly recorded transcripts of German POWs. Historian Sonke Neitzel, co-author of “Soldaten: On Fighting, Killing, and Dying – The Secret WWII transcripts of German POWs.”

April 24, 2014

For The Fallen

For The Fallen
Written September 1914

With proud thanksgiving, a mother for her children,
England mourns for her dead across the sea.
Flesh of her flesh they were, spirit of her spirit,
Fallen in the cause of the free.

Solemn the drums thrill; Death august and royal
Sings sorrow up into immortal spheres,
There is music in the midst of desolation
And a glory that shines upon our tears.

They went with songs to the battle, they were young,
Straight of limb, true of eye, steady and aglow.
They were staunch to the end against odds uncounted;
They fell with their faces to the foe.

They shall grow not old, as we that are left grow old:
Age shall not weary them, nor the years condemn.
At the going down of the sun and in the morning
We will remember them.

They mingle not with their laughing comrades again;
They sit no more at familiar tables of home;
They have no lot in our labour of the day-time;
They sleep beyond England’s foam.

But where our desires are and our hopes profound,
Felt as a well-spring that is hidden from sight,
To the innermost heart of their own land they are known
As the stars are known to the Night;

As the stars that shall be bright when we are dust,
Moving in marches upon the heavenly plain;
As the stars that are starry in the time of our darkness,
To the end, to the end, they remain.

~ Laurence Binyon (1869-1943)
In commemoration of ANZAC Day