June 2010

June 2010

*A wild roller coaster ride eventually took the markets down for poor showing 1^st half of 2010.

*If you think Greece is in bad financial shape, the US is actually in worse

*”Look ma, no hands” with Microsoft’s new Kinect for Xbox 360, or “Look ma, no glasses”, got Nintendo’s 3DS.

Figure 1

The market threw out a couple curve balls this month in the way two failed Follow-thru and two failed Correction signals (Figure 1). These signals came quickly which, in my personal studies, are failure prone. It was market volatility and short term profit taking which made June choppy and unpredictable. There was no sign of long term support from institutional buyers. This speaks to the uncertainty about the market. GLD (SPDR gold trust ETF) continued to be the bright spot of the portfolio this month as it climbed toward a all time record high. Technically, the indices have breached support and should be headed lower; BUT in this market, it could throw another head fake up as it did throughout June.

With all the news focused on Greece and the rest of the PIGS, it’s really the US in worst shape, according to Scotia Capital (Figure 2). The markets have given the US more “wiggle room” to bring in fiscal austerity. But that does not seem to be in Geithner game plan, as stated in a letter during June’s G20 conference.

Figure 2

In response, the G-20 as it writes up their position in a three-page communiqué:

Conclusion: the U.S. still doesn't get it. The rest of the world seems to be facing up to the source of the fiscal problems (other than public unions). The U.S. is in an incredibly huge dilemma. The debt levels of the European Union pale in comparison to those of the U.S. Will the New Normal be imposed on the U.S. by the rest of the world? Where does this end? Disaster or just a modest life and economy for the future by countries living within their means? The second might seem pretty nice if it follows the former!

This year’s E3 Conference may have been one of the best ever with revolutionary product introductions from each of the bigs: MSFT (Microsoft Corp), SNE (Sony Corp), and NTDOY.PK (Nintendo Co LTD ADR). Sony introduced their “Wii” controller, called Move (http://www.youtube.com/watch?v=s9ybHddDMgM). It does improve on the Wii with the addition of a camera to read body movements. The Playstation will also offer 3D gaming with through a software upgrade. Expect Wii and Xbox 360 to follow with their own 3D upgrades. Speaking of 3D, the 3DS handheld from Nintendo was introduced for portable 3D gaming without the glasses! (http://www.youtube.com/watch?v=pWYgM1RGixM&feature=related) . From Microsoft comes Kinect for Xbox 360, a high def 3D camera to detect precise body movements. In other words, your body becomes a controller. Perhaps the best way to understand this is to see this: http://www.youtube.com/watch?v=iH5d35qVirs&feature=related). With these products generating hardware upgrades and new software sales cycles, keep a watch on GME (Gamestop) at about $21-$22. GME (Gamestop) is the Street’s pure play when it comes to gaming, but be aware, as the market continues to throw out curve balls, individual stocks will follow suit.

Going out on a limb, my may be that the most important feature of the AAPL (Apple Corp) iphone 4 is Facetime, or video conferencing. While it technology has been around for over 30 years, it has yet to be easy and convenient. Initially, it will only be available on WiFi, but as Apple makes this viral, it may become the killer app and reason users will upgrade to 4G. They are off to a great start, check out this touching video http://www.viddler.com/explore/engadget/videos/1503/.