My portfolio finished the day up 0.08%. With that done, it is time for…the weekend open thread!

Instead of the usual entertainment-related subjects, this weekend’s open thread is dedicated to everyone’s most dreaded subject: income taxes! I would like to offer a little easy tax tip.

I was doing my taxes today on TaxAct (I recommend them), and when I finished, I was getting back a $600 refund from the state of Georgia, but I was going to have to pay the federal government $42. So I went back into the program, and found the section on IRA contributions. For a simple contribution of $235 to my IRA, I turned that federal tax payment into a $3 refund. I arranged the contribution today, and now I only owe money to my own IRA account. I even increased my state refund.

In honor of my taxes, the phrase “easy money” comes to mind. With that thought, here is a scene from Rodney Dangerfield’s movie Easy Money:

I would be remiss if I didn’t include Billy Joel’s theme song from the movie:

So what tax tips do you folks have?

The S&P 500’s Williams %R daily and weekly are both in overbought territory, as the daily and weekly RSI both nudge closer to overbought. The McClellan Oscillator is also nearing overbought, at 42 (with 60 being overbought).

But even more worrisome is the McClellan Summation Index, which is a long-term version of the McClellan Oscillator. The MSI is at 881, with 1000 being overbought (although it can go higher than that). To give you a taste of what to expect, here are the MSI and S&P 500 charts from last April-July:

While the MSI can go higher than 1000, or even 1200 (which is what it reached on May 21st last year), when it reaches those levels, expect a correction on the way. At 1000, it is time to start taking short-term long positions off the table, and quit adding positions, because a better price is coming. Mind you, the MSI doesn’t always correlate so perfectly with the S&P 500 like in the example above. The MSI is based on the NYSE, not the S&P 500, so the MSI is much more broadly based. But it does make an excellent warning sign for future corrections.

The S&P 500 levels to watch today:

UPSIDE: 1858 (February 24th’s high and the all-time high), and 1880 (top of the Bollinger Bands).
LAST CLOSE: 1854 (February 27th’s high).
DOWNSIDE: 1852 (2 data points), 1849-1850 (January’s high and December’s high), 1840-1847 (8 data points), 1835-1836 (3 data points), 1830 (February 13th’s high), 1823-1826 (5 data points), 1819 (50 day moving average), 1815 (February 12th’s low), 1812 (20 day moving average), 1809 (February 13th’s low), 1798-1800 (3 data points), 1791 (February 10th’s low), 1790 (100 day moving average), 1784 (February 3rd’s high), 1774-1776 (2 data points and October’s high), 1770 (January’s low), 1767 (December’s low), 1758 (February 4th’s high), 1755 (February 5th’s high), 1753 (150 day moving average), 1752 (February 6th’s low), 1745 (November’s low), 1743 (February 4th’s low and the bottom of the Bollinger Bands), 1739 (February 3rd’s low), 1737 (February 5th’s low), 1729 (September’s high), and 1726 (200 day moving average).

Reuters (via Yahoo Finance): Big cut in U.S. fourth-quarter GDP growth looms

The U.S. government is set to slash its estimate of fourth-quarter growth as exports and restocking by businesses were less robust than previously thought, leaving the economy on a more familiar path of modest expansion.

Gross domestic product growth will probably be lowered to a 2.5 percent annual rate, according to a Reuters poll of economists. That would be down sharply from the 3.2 percent pace reported last month and the 4.1 percent logged in the third quarter.

“The revision to the GDP number will better reflect the underlying economic trend because the increases in inventories and exports that massively lifted growth in the second half of the year were simply not sustainable,” said Harm Bandholz, chief U.S. economist at UniCredit Research in New York.

The Commerce Department will release its fresh estimate of fourth-quarter GDP at 8:30 a.m. (1330 GMT) on Friday.

I won’t try and predict what the new number will be, but I will say there is potential for a major market drop today. If the GDP number is revised significantly lower, say below 2%, the markets could have a very bad reaction to this, especially in light of the Federal Reserve’s tapering intention.

Bloomberg: Republicans Opposed to Yellen Flee Paul in Search of Rules

Republican lawmakers are seizing on a monetary-policy debate that’s older than the Federal Reserve itself as a means of hemming in the central bank as it enters its second century.

Led by House Financial Services Committee Chairman Jeb Hensarling of Texas, they’ve accused the Fed of following a haphazard, discretionary policy that investors have found hard to fathom and that has done little to help the economy, even as it recovers slowly from the worst crisis since the 1930s. As an alternative, they want Fed Chair Janet Yellen and her colleagues to adopt a rules-based approach that they say would be more understandable and reliable.

“We are into an improvisation phase where an incredible amount of discretionary power has been imparted upon the unelected and relatively unaccountable,” Hensarling said in an interview. “I don’t think that is good for promoting long-term economic growth.”

Read the entire article. I think the Republicans are correct here, mainly because of the economy’s recent booms and busts, which have been brought on by subjective Fed policy. They are guessing at what they should do, and they are too often wrong.

Bloomberg: U.S. Retail Chains See First Profit Decline Since Recession

With results in from 62 of 122 retail chains, the industry has posted its first profit quarterly drop since the economic contraction that ended in 2009, according to Retail Metrics Inc. Revenue also rose at the lowest rate since that year, the research firm found.

The results paint a grim picture of an industry hit hard by the sluggish job recovery and slow wage growth, which have turned U.S. consumers into a nation of penny pinchers. Earnings are expected to drop 6.1 percent on average during the holiday quarter, according to Retail Metrics data. The broader pool of Standard & Poor’s 500 Index companies, meanwhile, are estimated to see profit rise 8.5 percent.

This is an especially bad sign when you consider the added costs people will be paying for Obamacare this year. Unless the sector gets extremely undervalued, I would avoid retail.

Bloomberg: Gold Fix Study Shows Signs of Decade of Bank Manipulation

Speaking of things to avoid:

The London gold fix, the benchmark used by miners, jewelers and central banks to value the metal, may have been manipulated for a decade by the banks setting it, researchers say.

Unusual trading patterns around 3 p.m. in London, when the so-called afternoon fix is set on a private conference call between five of the biggest gold dealers, are a sign of collusive behavior and should be investigated, New York University’s Stern School of Business Professor Rosa Abrantes-Metz and Albert Metz, a managing director at Moody’s Investors Service, wrote in a draft research paper.

“The structure of the benchmark is certainly conducive to collusion and manipulation, and the empirical data are consistent with price artificiality,” they say in the report, which hasn’t yet been submitted for publication. “It is likely that co-operation between participants may be occurring.”

The paper is the first to raise the possibility that the five banks overseeing the century-old rate — Barclays Plc (BARC), Deutsche Bank AG (DBK), Bank of Nova Scotia, HSBC Holdings Plc (HSBA) and Societe Generale SA (GLE) — may have been actively working together to manipulate the benchmark. It also adds to pressure on the firms to overhaul the way the rate is calculated. Authorities around the world, already investigating the manipulation of benchmarks from interest rates to foreign exchange, are examining the $20 trillion gold market for signs of wrongdoing.

Gold price movements last year proved to me that it was rigged. When the price dropped significantly last Spring, and demand for gold went through the roof in Asia, the price should have bounced, but didn’t. That tells me the “supply-demand” equation isn’t working, which can only lead to one conclusion.

That said, I don’t expect any government investigations will reveal much, because governments have a vested interest in keeping gold prices down, in order to keep their currency values up. If currency values drop too far, especially against the gold price, people might realize that gold is more valuable than the worthless pieces of paper they are using.

EUM: -0.14 to $27.40 ( -0.51% , -0.51% overall)– bought at $27.54
SIRI: 0.04 to $3.61 ( 1.12% , -1.63% overall)– bought at $3.67

OVERALL: -0.21%

With emerging markets, especially China, showing some sensitivity to the Federal Reserve’s QE tapering recently, I decided the ProShares Short MSCI Emerging Markets (EUM) is a good buy for the next few months. Holding it for that long a period, I didn’t want a leveraged etf, and EUM is perfect for this play.

At this point, I have a price target of $32 (near the 52 week high) on EUM, although it could surpass this if things get uglier than I expect.

I added EUM to my IRA at $27.54.

Yesterday didn’t happen. For the S&P 500, which was up by 4 cents, yesterday was almost the mirror image of Tuesday: High of 1852, low of 1840, close at 1845. Needless to say, the technicals barely moved.

Futures are down a little this morning, but I wouldn’t expect a huge move until Federal Reserve Chairman Janet Yellen gives her Senate testimony this morning. I expect she will stick to her guns on tapering, with the only question being whether she appears dovish or hawkish towards raising the prime rate. Her history leans towards dovishness, but the last Fed meeting minutes showed some hawkishness starting to form in the group. Stay tuned…

The S&P 500 levels to watch today:

UPSIDE: 1849-1850 (January’s high and December’s high), 1852 (2 data points), 1858 (February 24th’s high and the all-time high), and 1875 (top of the Bollinger Bands).
LAST CLOSE: 1845, inside the 1840-1847 (7 data points) range.
DOWNSIDE: 1835-1836 (3 data points), 1830 (February 13th’s high), 1823-1826 (5 data points), 1817 (50 day moving average), 1815 (February 12th’s low), 1809 (February 13th’s low), 1808 (20 day moving average), 1798-1800 (3 data points), 1791 (February 10th’s low), 1788 (100 day moving average), 1784 (February 3rd’s high), 1774-1776 (2 data points and October’s high), 1770 (January’s low), 1767 (December’s low), 1758 (February 4th’s high), 1755 (February 5th’s high), 1752 (February 6th’s low an the 150 day moving average), 1745 (November’s low), 1743 (February 4th’s low), 1740 (bottom of the Bollinger Bands), 1739 (February 3rd’s low), 1737 (February 5th’s low), 1729 (September’s high), and 1724 (200 day moving average).

Washington Times: All eyes on Moscow’s military moves in Ukraine

Earlier this week, intelligence agencies reported that two Ural-4320 trucks full of armed Russian troops were observed arriving in the Black Sea port of Yalta. Photographs made by a Ukrainian civilian were posted online as the troop transports entered a Russian military facility in Yalta, on the Crimean peninsula in Ukraine.

Other activities in recent days have included the movement of armored personnel carriers observed at Russia’s Black Sea Fleet headquarters in nearby Sevastopol.

U.S. officials said the purpose of the troops is not known, but speculation centers on the possibility of the troops being used as part of an advance force for a future Russian military operation.

Here’s a thought for you: 30 years ago, during the Cold War, how do you think markets would have reacted to news like this? I can tell you, they would have tanked on fears of a major military confrontation. Yet this is somehow different? It is possible the markets are discounting this situation because the Ukraine isn’t a major world supplier. If Russia does send military into Ukraine, it could actually be good for some companies (think defense contractors). Of course, if this is just a first step towards Russia returning to their Cold War ways, is that a good thing for markets overall?

Bloomberg: Even Warren Buffett Can Be Wrong

Above is a good article by Barry Ritholtz about the overall market cap as a percentage of GDP indicator. He makes a valid bullish argument against the indicator. I won’t say he is right or wrong, as only time will tell the answer to that. I personally think the indicator is something to consider, but not something to make a decision about macro conditions by itself. In fact, I don’t think there is any one indicator (technical or statistic) that will give you the economic picture in one shot.

SIRI: -0.01 to $3.57 ( -0.28% , -2.72% overall)– bought at $3.67
SPXU: 0.03 to $59.29 ( 0.05% , -15.66% overall)– bought at $70.30

OVERALL: +0.03%

Yesterday’s drop in the S&P 500 helped relieved some of the near-overbought conditions in the technicals. Futures are up this morning, so we may get a bullish day here. But I would still approach this market cautiously. Sentiment is mixed, and technicals can easily reach overbought levels from here. However, for daytraders looking to pick up a quick buck, this has been a wonderfully volatile market.

The S&P 500 levels to watch today:

UPSIDE: 1849-1850 (January’s high and December’s high), 1852 (February 25th’s high), 1858 (February 24th’s high and the all-time high), and 1871 (top of the Bollinger Bands).
LAST CLOSE: 1845, inside the 1840-1847 (6 data points) range.
DOWNSIDE: 1835-1836 (3 data points), 1830 (February 13th’s high), 1823-1826 (5 data points), 1816 (50 day moving average), 1815 (February 12th’s low), 1809 (February 13th’s low), 1805 (20 day moving average), 1798-1800 (3 data points), 1791 (February 10th’s low), 1787 (100 day moving average), 1784 (February 3rd’s high), 1774-1776 (2 data points and October’s high), 1770 (January’s low), 1767 (December’s low), 1758 (February 4th’s high), 1755 (February 5th’s high), 1752 (February 6th’s low), 1751 (150 day moving average), 1745 (November’s low), 1743 (February 4th’s low), 1739 (February 3rd’s low and the bottom of the Bollinger Bands), 1737 (February 5th’s low), 1729 (September’s high), and 1723 (200 day moving average).

Financial Times: Bitcoin exchange fears $400m theft

If you need a reason to avoid Bitcoins, here you go:

Bitcoin is facing the biggest test of confidence in the nascent virtual currency, after its oldest and most famous exchange went dark and customers feared the loss of $400m worth of Bitcoin.

Mt Gox – a contraction of Magic the Gathering Online Exchange, after its origins as an exchange for the trading cards game – suddenly deleted its Twitter history and then pulled its website offline on Tuesday, prompting a swirl of rumour and recrimination.

In the hours that followed, a document circulated online alleging that the exchange had lost 744,000 Bitcoins – equivalent to almost 6 per cent of the 12.44m coins in circulation – in what the document referred to as “theft” by outside hackers.

Calls and emails to Mt Gox spokespeople seeking comment on the allegations were not returned, but while it remains unclear exactly what has happened, the exchange’s customers were coming to terms with the likelihood that they will not see their funds again.

Mt Gox had suspended customer withdrawals last month, but continued to allow trading, even as concerns mounted. It blamed the restrictions on a “bug” in Bitcoin, which allowed fraudsters to make it difficult for exchanges to track transactions, but other exchanges said they had implemented fixes for the problem.

Weekly Standard: Obama Says Supporters Doing ‘God’s Work’

This is hilarious:

President Obama thanked the group that used to be his reelection campaign, Organizing for Action, in event tonight in Washington.

“The work you are doing is God’s work,” Obama told supporters.

“God’s work”, huh? I wonder who God would happen to be in his mind?

Seriously, this reminds me of when Goldman Sachs CEO Lloyd Blankfein said he was “doing God’s work”. Is this the new meme in Washington and Wall Street? It doesn’t matter how much of a liar or thief you are, as long as you can pass off responsibility to God…