What if Cuba got $6.6 billion in weapons?

Imagine This

What if China gave/sold $6.6 billion dollars worth of weapons to a country 90 miles off our shore  – CUBA. What would the reaction in the USA be? Chest thumbing 24/7 outrage and our military would move into position. As Popeye (see comments section) point out we just sold $6.6 billions in weapons to Taiwan 90 miles off the China cost.

We want China’s help in sanctions against IRAN growing nuclear threat. How is China going to act now to the American threat of $6.6 billion of new weapons off its shore? How would we react?

Bottom line, – this is feeding the military industrial complex need for profits/wars.

Wanting America and Obama to Fail

Part 2

Nobel Prize winner Paul Krugman editorial today echoed the problems Investor411 brought up Friday when Senator Shelby held up held up 70 top government appointments over two pet pork projects. In fact, other Senators are doing the same.

Obama’s, Press Secretary, called Shelby’s individual filibuster “silly.”  Silly? – The whole White House need to drink a quart of testosterone – Where is he fight that dominated the Obama campaign?

Falling Euro’s Threat to America.

Many, smaller European companies are on the verge of default. Obviously, Credit Default Swaps are traded on their bonds. So nobody knows just how mush of the debt they have and probably more importantly taking bets on there success and failures.

Simon Johnson , MIT prof and former Chief Economist of the World Bank has an editorial on this.  Basically the Euro will get weaker relative to the USA and this will help European socks, but also push American stocks higher.  Mantra for months has been stronger dollar = weaker US markets. Compare a chart of the Dollar ($USD) and the SPX (S&P 500)

Here’s the problem nobody knows how bad or over leveraged things exactly are because there was little regulation. – just like the theUSAUSA.

Who is Killing Financial Reform?

Robert Reich has a must read editorial on Democrats, lobbyist, and others who are involved in killing financial reform. It’s been over a year since Lehmann crash and nothings been done to fix shadow banks.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

.

Significant indexes – Forecasting tools for market direction

• McClellan Index fell to -69.02 = Still Oversold. How low or oversold can markets get before rebounding. We did reach @-93 about 3 days ago, about @-115 last November & @ -130 back in the fall of 2008 .Since +60 is overbought & a sell signal – we are 130 points away from that and only 60 away from the HUGE Nov 2008 crash (see chart) Bad numbers are Bullish

• BDI – This chart shows the Baltic Dry Index (scroll down) , a measure of shipping costs, Has broken through a major month long  support level at @ 3000 .  Yesterday the BDI rose +30 at 2715. This is the second day of a rebound that will have to get above 3000 to be meaningful.
• $USD -The USD moved up dramatically as stocks fell lasst week.  As discussed many times before a rising dollar hurts US stocks because our goods cost more to export Rising Dollar = Bearish for Stocks

Fearless Forecast – We’re in for a buppy ride – Hard to value the extent of the European Debt problem – So when you don’t knoe investors almost always paly it safe and that means sell – Down Week – Buying the dips

Positions

The  Positions Section (also at top of blog) has the latest buys and sells – Revised positions over weekend) – These are positions I actually own

SELLING & BUYING

Here’s stocks YOU suggested  to add to the Watch List. – Will try to analyze stocks over weekend.
GS, JPM, CSCO, SHOO, ICON, SOA, ALF, VSEC, BIDU VPRT (tomorrow)

Still adding to positions. The more the McClellan dips the more you should add

The strategy .  Buy a position in an oversold market and sell 1/2 of it when it gains 5 to 10% and let the rest ride.  The position should take into account major trends that you understand. For me China, Emerging Markets and Brazil still fit the bill. However there are concerns about a long term US/China trade war. Also any of the ETF’s that do 2 & 3 X what the major US indexes do.

Bottom Line – We are oversold and ready for at least a short term run – Investors 411 opened a 5% position in TYH (3x financials) Friday at 117.14 A short term trade with a tight stop at 177.14.  Will take 1/2 profits at 5%+ rise

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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Wanting Obama & America to Fail

I may criticize Obama and before him Bush, but I never wanted them to fail. Our politicians have gotten so partisan that Obama’s failure has become far more important than solving problems that confront our country and the world.

Richard Shelby (Powerful Republican Senate finance committee minority leader) – has held up 70 Obama appointments because he wants “earmarks” (special compensation) for his state of Alabama. The Huffington Post  labeled him Mr. Roadblock after Shelby held up the nomination for chief of the General Services Office for 10 Months . She passed 96 to 0 . Additional story here . Buying votes has overwhelmed US politics. But this case was just way too blatent.

PIGS

- World Market’s stocks plunged in an aftershock of the financial earthquake that hit last Oct. 2008. In 2008 it was the huge shadow banks that stood on the brink of collapse from over leveraged debt bombs called Credit Default Swaps.  Iceland’s economy is still shattered because it took on too much OVER LEVERAGED debt.

P ortugal, I reland, G reece, and S pain are now in trouble. You can add Great Britain and all the former Soviet satellite countries.  They bought into the unregulated free market capitalism and now like financials are suffering.  They are selling their debt at much higher prices than we are.  Are other countries going to fall like Iceland?- Bill Gross (big bond seller) editorial

Here’s the problem nobody knows how bad or over leveraged things exactly are because there was little regulation.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

Worldwide stocks dropped in big, above average volume on fears of a credit meltdown in Europe. (See above) This, added to China and some other emerging markets pulling back on stimulus has driven all major indexes to yearly lows = Bearish

Jobs number -  Headlines -20,000 job losses in January (about what was expected) 9.7% Unemployment rate . Don’t understand how they got this number – down -0.3 % and not seeing job creation).  Seems implausible. They did a yearly revaluation. Basically this is good news for stocks .

Significant indexes

• McClellan Index fell to -70.88 = Oversold. How low or oversold can markets get before rebounding. We did reach @-93 about 3 days ago, about @-115 last November & @ -130 back in the fall of 2008.

• BDI – This chart shows the Baltic Dry Index (scroll down) , a measure of shipping costs, Has broken through a major month long  support level at @ 3000 .  Yesterday the BDI rose +12 at 2685.

Analysis – Oversold conditions means we are closer to a buy than a sell. Two major questions.

• Is this correction going to grow? Technically the answer seems to be yes . The charts are showing now 4 major down days in big volume. We are at yearly lows and the McClellan Oscillator is at -71. 3 trading days ago we hit -93 and the markets were at a higher low. All this is Bearish but oversold markets are when to buy.
  
• How to play the dip When everyone else sells you buy. The bigger the dip the better your chances. Of course this works best for a short term trader, who is willing to buy the dip and sell a few days/week later.  The more a longer term investor is in cash- the more its time to nibble.
  

Positions

The  Positions Section (also at top of blog) has the latest buys and sells (Usually updated over weekends – will try to update last few weeks today) – These are positions I actually own

SELLING & BUYING

Here’s stocks YOU suggested  to add to the Watch List. – Will try to analyze stocks over weekend.
GS, JPM, CSCO, SHOO, ICON, SOA, ALF, VSEC, BIDU VPRT

ETF’s -  6% of portfolio FXI (China), 5% EWZ (Brazil), & 10% MOO (Agriculture) -  Total 21% invested. Sold 1/2 position or 5% of portfolio of EWZ yesterday at $65.1 . This was bought at $52.8 back in July. A +23% gain

I will be adding to positions (hopefully long term) today, hopefully in a dip.

The strategy .  Buy a position in an oversold market and sell 1/2 of it when it gains 5 to 10% and let the rest ride.  The position should take into account major trends that you understand. For me China, Emerging Markets and Brazil still fit the bill. However there are concerns about a long term US/China trade war. Also any of the ETF’s that do 2 & 3 X what the major US indexes do.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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National Georaphic – Great Wall of China (Emerging Markets)

Trends, Wars, & YOUR Money

Investors411 has followed 3 or 4 major investment trends over the last decade - Globalization, Peak Oil, Spread the Wealth & The Great Recession (the later needs some revision).  Global politics and events have impacted these trends and therefore investment choices.

• Fall 2008s financial meltdown proved again Free markets need regulations or they form boom and bust cycles . Even, arguably, the #1 proponent of self regulating free markets Alan Greenspan admitted he was wrong
• Working middle class taxpayers in the USA and around the world bailed unregulated markets with stimulus, packages, printing money, TARP programs, taxes , etc. This was socialism for the rich . It further expanded the gulf between the rich and poor in many countries.
• Emerging markets have kicked our asses as far as growth is concerned for almost a decade. Globalization and Spreading the Wealth to a growing, not shrinking, working class were the primary causes behind this.
• Most emerging markets have a managed or planned economy vs. our more unregulated economy. Few emerging markets were involved in highly speculative trading vehicles (example – Credit Default Swaps)

More recent events impacting trends.

• Wars - The US weapons budget has exploded over the last decade to the #1 budget sector and to @ 50% of the world spends on weapons. Obama has increased the weapons budget and the secret war in Pakistan is no longer a secret.
• Trade war brewing – Relationship between the world’s #1 economy and the world’s fastest growing economy is souring. Check out NYT’s stories on China over last few months
• China – has moved to defuse a growing housing (people moving to cities for better jobs) and a possible  inflation bubble before it pops. Decent month old editorial on this. Remember Chinese banks did NOT sell credit default swaps on housing, so this housing bubble is not as sever as USA’s. But, this is still a serious problem.
• JOBS – While the job losses have declined in the USA from -700,000 to @ -50,000 a month, we increased last month. Obviously US jobs over the last decade have been lost to globalization and consumers in the USA are now saving more. Considering the above 3 bullet points its hard to see stimulus plan alone keep this figure from flattening or falling. (more later)

Bottom Line – Let’s try to be as objective as possible and look at the technicals. In this case, the chart of either the FXI (China) or EEM (Emerging Markets)

Both charts are similar, but China (FXI ) is a little more sever. Notice how fast they exploded in the first 1/2 of 2009 and that growth slowing in the last 1/2. Now for the first time the 50 day moving averages are heading down . In fact China is trading below its 200 day moving average. The countries led us out of recession (Indonesia, Brazil, India, & China never even entered a recession)

It certainly looks like growth has peaked and emerging markets are now in a correction phase.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

US Markets basically held onto the significant gains of the last two days – an oversold bounce. Holding onto gains = short term Bullish

CSCO – again had a great earning report and is putting 2000 to 3000 new people to work.

Hard to see a major  move in stocks in front of – The Monthly jobs report t on Friday Each of these reports becomes more and more important.  In November we reached positive job growth (+6,000 ). But this is looking like retailers hiring folks for Christmas buying season.

Best Read of Tea Leaves – You’re NOT going to be happy with the jobs numbers.

Significant indexes

• McClellan Index at -32,18 = We’ve pulled way back from -90 or oversold levels two days ago. Over -60 + Oversold
• BDI – This chart shows the Baltic Dry Index (scroll down) , a measure of shipping costs, Has broken through a major month long  support level at @ 3000 and is keeps falling. Yesterday the BDI closed at  2673.= Bearish However the rate of decline is SLOWING and this almost always indicates at least a short term reversal.
  

Positions

The  Positions Section (also at top of blog) has the latest buys and sells (Usually updated over weekends – will try to update last few weeks today) – These are positions I actually own

SELLING & BUYING

Thanks to 5 of you who sent in suggestions fo r Stock Watch Lis t!

ETF’s – were still 6% FXI (China), 10% EWZ (Brazil), & 10% MOO (Agriculture) – Since we have rallied would consider selling  another 5% (hopefully in a rally – which seems unlikely today)

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

2010 Future?

Pakistan, Iran, Iraq, China and Future Wars

The NYT is carrying an ominous front page story on 3 Americans dying in Pakistan . And you thought there were NO US troops in Pakistan.

How the Pakistan media portrays the US – 123 civilians killed & 3 al Qaeda fighters in drone attacks January. US to increase drone attacks by 75% Only 9% of Pakistani’s support these drone attacks. The opposition Muslim party is by far the now the most popular and their mantra is “Go America Go ” – Hint – they are not cheering us on, but telling us to get out.

Combine this with our growing problems in Yemen, Iran & China (see yesterday’s Investors411) and 2010 is shaping up to be another year where animosity between the US and the rest of the world grows. Recently the NYT reported that over 30 other US companies besides Google were hacked in China. The China/US economic relationship is key to the growth of their and the world’s economic well being.

Check out Popeye’s comments on right of blog. I’m certainly not as strongly anti Obama as he is, but he brings up some good points. Especially, the American media failed to mention that NATO refused to send 10,000 more troops to Afghanistan.  Once again another “coalition of the willing” seems to be breaking down.

Perhaps the real reason for the troop escalation in Afghanistan is preparation for an invasion of Iran . We now will have over 100,000 troops on both sides of Iran – In Iraq & Afghanistan. Best blog for educated inside information continues to be Prof.Coles Informed Comment

Bottom Line – Trend - 2010 looks to be a year of growing instability with the US and the rest of the world. This could have a negative impact on stocks.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

US markets rallied significantly again.  This time volume increased and was just above average. Increased volume is what bulls love to see in a 1% or greater rally. But these figures were not the BIG volume bulls want to see and were there when stocks fell over the last few weeks.  So far we have an oversold bounce . Time will tell if it develops into anything.

The major event of this week will be the Monthly jobs report at the end of the week.

February is historically a BAD month for stocks.

Markets had every reason to tank as Obama economic adviser and legendary Fed Chair Paul Volker spoke in front of the Senate Finance committee about breaking up too big to fail banks. Instead, stocks move higher.  Much needed financial reform of the shadow banks looks DOA to investors.

Significant indexes

• McClellan Index at -21.79 = We’ve pulled way back from -90 or oversold levels two days ago.
• BDI – This chart shows the Baltic Dry Index (scroll down) , a measure of shipping costs, Has broken through a major month long  support level at @ 3000 and is still falling. Yesterday the BDI closed at  2691.= Bearish – especially for China. More on this tomorrow)
  

Mistake – Unfortunately, I was away Thursday through Monday.  It looks like Thursday Friday when the McClellan Oscillator hit -70 then -90 was the time to buy.

Chinese stocks bottomed 5 trading days ago and are once again leading US stocks higher.  There is a disconnect or contradiction with the BDI falling. China, whose economy is both export and import driven, should see an INCREASING BDI when its markets grow.

Positions

The  Positions Section (also at top of blog) has the latest buys and sells (Usually updated over weekends – will try to update last few weeks today) – These are positions I actually own

SELLING & BUYING

Stock Watch List

NB – I feel much more confident with ETF’s because they reflect global trends than individual stock. Too many things can go wrong with individual stocks. Click on ticker symbol for chart

• SEED – A China related stock. In a buy the dip position at 50 day moving average
  
• AAPL - Apple’s latest product seems to be a bit of a dud. Former leader now under performing.
  
• HMIN - Failed breakout . China play. Will recover when  China does.  Will drop from list soon
  
• CAAS – Broke down though 50 day, but has rallied last two days in STRONG volume. Tempting
  
• PCLN – Fell below 50 day moving average. Had a good pop in price and volume on Monday. Tempting
  
• F – Now less over extended. Too much recent down day volume. Tempting
• DRWI - Big exporter to China -  Was way too overextended to buy, and now sitting on 50 day MA support level  No big volume as stock dropped= good sign. Buy the dip .
  
• ENOC – New – Reduces costs for utilities – No big volume behind its recent fall. Potential buy the dip .
• ATHN – New - Software reduces costs for health care - Broke its longer term bullish trend in big  volume – Will drop from list soon.
  
• IMAX – Great long term chart – falling back to its 50 day moving average. Outperforming overall market Still a buy the dip opportunity . Investors411 has a 2% of portfolio position in this stock

IMAX still rules. DRWI, SEED & ENOC seem to be the best of the rest. Would open position in any of these on an overall stock market dip.

Looking for a couple new suggestions to YOUR recommended list.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

HMS Titanic

Sipping White Wine

Every year major capitalist leaders from around the world get together at Davos Switzerland and to sample the world’s best wines. This banquet usually sings the praises of globalization and unfettered free markets. But the tone decidedly changed.  France’s President Sarkozy took the lead. What’s unique was wealthy wine sippers went after banks (David Ignatius editorial) in arguably the banking capital of the world – Switzerland. Populism (going after the too big to fail banks and using YOUR tax dollars to bail them out) was popular.

Bottom Line – Volker (who goes in front of Senate Banking committee today) & Obama have both spoken out against the too big to fail shadow banks. The Supreme court has given them added power (see past updates). Remember – for something to get done it has to pass the Senate and Chris Dodd (D – CT) is the chair of the Senate finance committee.  He’s the guy who approved the HUGE bonuses for Wall Street Shadow Banks.

Betraying a Nation

Thanks to Yankee Bob for filling in and bringing to light some credible and different ways of fixing our deficit problem.

If we are on the  sinking economic Titanic and the passengers are running from side to side frantically looking for an answer –  the real question is what is the crew (political leaders) doing about their boat. Even an idiot realizes you cant keep cutting taxes and increasing weapons, social security, medicare/medicaid, which combined with the increasing debt make up 70+% of the budget.

Senators (D – ND) Kent Conrad and (R – NH) Judd Gregg worked for 2 years to form a bipartisan commission to deal with the sacred budget cows that both parties have. Two weeks ago it came to a vote in the Senate and even sponsors of the Bill like (R) John McCain switched sides to vote NO .  In all 22 Democrats , 23 Republicans , 1 Independent were too afraid to vote for this bill.  It failed to win the necessary 60 votes to break a filibuster. (53 yes to 46 no) Here’s a David Broder editorial and a list of the cowards who “Betrayed America. “

Obama promised to form a Presidential Commission to look into this, but it lacks the power of a Senate commission.

Future Wars

We supposedly want China’s support in backing harsh sanctions against Iran .  So The US (Obama) goes ahead with selling $6.4 billion dollars worth of weapons to Taiwan.  China want to have a reconciliation with Taiwan and wants the island to be part of China. China embargo’s  Think we will ever get China to join us with harsher sanctions on Iran?

Like the giant alien plant Seymour in Little Shop of Horrors – the Military Industrial Complex in the USA keeps crying FEED ME

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

US markets rallied significantly in decreased below average volume. Volume did NOT confirm the rally. Only the NASDQ had volume that was even average.  Yesterday’s trading was an oversold bounce.  Technically, so many traders/investors had sold conditions were oversold (see McCellan Oscillator below) and we ran out of sellers.

Volume, our #1 technical forecasting tool, has indicated a major reversal is potentially underway. Three+ big volume combined with major declines shows major players heading for exits in the last 2+ weeks.

The major event of this week will be the Monthly jobs report at the end of the week. Earnings season is basically over.

Significant indexes

• McClellan Index at -53.52 =  Yesterday we rebounded from over -90 .  We are just below -60 or oversold levels. If everything eles is equal both  long term investors and even short term traders should buy when markets are oversold and sell when they are overbought +60 .
• BDI – This chart shows the Baltic Dry Index (scroll down) , a measure of shipping costs, Has broken through a major month long  support level at @ 3000 and is falling. Yesterday the BDI closed at  2745.= Bearish – especially for China. More on this tomorrow)
  

Fearless Forecast (for week) The US jobs report is critical for Americans, but not Wall Street. Wall Street can grow on profits from abroad. In fact, earnings reports which are getting better each quarter, are mostly improving on growth from emerging markets. China, the #1 emerging market has moved to slow growth and prevent a bubble – this has slowed their economy and stocks over the last month. However, the FXI has rebounded over the last few trading sessions in strong volume = Bullish The BDI is showing the exact opposite of a rebound, but an economy that’s slowing.= Bearish

So we have conflicting signals on China’s growth story. We also know from past experience that US which is still the economic leader worldwide (this position has diminish for a decade and continues to do so) can move significantly higher in weak volume. We saw this form Aug to the end of last year.

Best read of tea leaves – since we are technically oversold we should have an up week . There looks to be no major meltdown in the near future – only a question of will there be a further correction. Technically oversold positions should improve in the short term.

Positions

The  Positions Section (also at top of blog) has the latest buys and sells (Usually updated over weekends – will try to update last few weeks today) – These are positions I actually own

SELLING & BUYING

ETF Watch List

Current owned positions

• FXI (6% of portfolio) China – major technical breakdown of “head & shoulders trading pattern. Bought at @40 Now at @40
  
• EWZ (10% or portfolio) Brazil – Between 50 & 200 day moving average, but in correction. Bought at @ 52 & 59. Now at @67
  
• MOO - (10% of portfolio) Agriculture stocks – Moved below 50 day MA. Bought at 42 Now at@ 42
  
• IMAX – (2% of portfolio) – 3D movie theaters and future TV network. (Will keep adding on each dip) Now at 13.50

Since we are closer to -60 on the McClellan this should be a time to BUY rather than SELL 2010 is NOT going to be the kind of major bullish year 2009 was, but if we add when conditions are oversold you’ll do a whole lot better in the long run. The more oversold the better.

Traders should be able to do well today & early this week because of oversold positions.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Housekeeping – I’ll be away for next 3 trading session. Buying a portable computer to keep Investors going for next trip. Today we have Guest Editorial by Yankee Bob . You can read entire unedited piece in comments sections. (Bolding mine)

Fixing The Budget

When you consider that we fight the wars, spending that is off the books, that many fortune 500 companies find ways to pay no taxes, (there is only a minimum tax on people not,corporations); it’s no wonder we have a deficit.
How many trillions has the Bush tax cuts deprived the Treasury? The share of US treasury revenue from corporate taxes when Ike was in was above 30%.
Now I think it’s less then 20%.  Did these tax cuts for the corporations result in more jobs? NO!!! It results in huge pay for the executives.

A 5th grader could balance and probably pay down our debt but the corporate press has us convinced that it’s hard or impossible to do.  Solutions-

1, Make corporations pay the same rates they did under Ike.

2. Stop the ridiculous subsidies to the fossil fuel community{like they can’t afford it and no one would look for oil anymore if you did} And stop the farm subsidies that are handouts to big Agra.

3.Stop the Wars and bring the troops home. Reduce  our troop and base presence in the world. We have a staggering number of bases and troops all over.

4. Stop the madness of spending on Defense and Homeland Security . Most of it is a waste. A lone gunmen ,a carful of terrorists with a book of matches or a stick of dynamite is a real threat that our expensive military hardware is useless against. In fact, with the fall of the USSR, what is it for?  How many thousands of homes in the California deltas that are already crumbling from our lack of maintenance could a careful of terrorists take out with  just low level explosives,or nationwide; the electric grid, major bridges, fuel depots  and chemical sites.  How much havoc could they cause with a pack of matches in California in fire season? Remember the panic the pair of assassins caused about 6-7 years ago on the East coast?  I’m not saying that there is no terrorist threat. I am saying that it has been overblown and that the systems and  super weapons we have  are incapable of protecting us. So,why are we spending so much so unwisely?  Why have we been made to surrender our Rights and Liberties when the threat is so overblown?

5. Restore the tax stream that the Bush tax cuts  took away from the Treasury Revenues
and put in the inheritance tax for the super wealthy.

6. Take the limit on payroll taxes off . Is there a more regressive tax anywhere? We get taxed up to about $100,000 and then those that make more then that don’t have to pay anymore. We have to listen to endless drivel from the right that Social Security has to be cut back and that it’s an unfair tax on young workers! How about  having the over $100,000 a year people pay the tax on their whole salary,including stock options. The shortage or crises may be real but the solution is simple. Just extend the tax. It’s as contrived as California’s revenue problem. They limited their property tax abilities and then they end up with deficits and the feds have to help them. Why can’t they get rid of their proposition 2,I think it was.

Do a few of these and  not only would there be money for all.  It would probably pay off the debt, too.  A 5th grader could do this. But,it is not going to happen .

Have a different View? Is Yankee Bob right?

How would YOU fix the deficit and stimulate economic growth?

Send your view into comment section of blog.

-

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

An Apple Computer led rally disintegrated in the last 2 hours of trading. Markets ended up down slightly in INCREASED volume.  Pretty much Monday and Tuesday canceled each other out. But the fall has stabilized.

Volume, our #1 technical forecasting tool, has indicated a major reversal is potentially underway. Three+ big volume combined with major declines shows major players heading for exits.  You need some sort of major fundamental to turn this around.  Apple computer (technology) seems to have failed, despite some very good news.

Three major fundamental problems confronting markets.

1. China is trying to slow down growth through bank limiting loans. China has led the world in economic growth.
2. Obama’s State of the Union may focus on ways fixing too big to fail institutions
3. Jobs report last month rose from +5,000 (Nov) to -85,000 (Dec) . Weekly reports are more supportive of the -85,000 number or worse.

Significant indexes

• McClellan Index at -73.75 =  still significantly oversold.  (see Sunday’s Investors411 for more analysis)

Positions

The  Positions Section (also at top of blog) has the latest buys and sells (Usually updated over weekends)

These are positions I actually own

SELLING & BUYING

ETF Watch List

Investors411 has cut back on lots of positions – Example FXI (China) 24% to 6% of portfolio total. See Positions of 2009 Investors has moved from over +70% invested to @ 35% invested over the last month or two. Wish we were now less invested, but not going to cry over spilled milk.

If we were down to 10% invested I would be buying. Did purchase a 3% of portfolio position in ROM (an ETF that does 2x what tech stocks do) I put a 6% stop loss on this.

• FXI (6% of portfolio) China – major technical breakdown of “head & shoulders trading pattern. Bought at @40 Now at 39
  
• EWZ (16% or portfolio) Brazil – Between 50 & 200 day moving average, but in correction. Bought at @ 52 & 59. Now at 67
  
• MOO - (10% of portfolio) Agriculture stocks – Moved below 50 day MA. Bought at 42 Now at 42
  
• ROM – (3% of portfolio) – 2X what tech stocks do. Have a tight 5% stop/loss order on this. Short term play. Just bought.
  

See Sunday’s analysis.

The problem here is if US stocks go down another 5 to 10 % – Brazil & China because of their volatility will double this. Tough call since the McClellan Oscillator now at -74 but has reached -120 last November.

So lets take profits on @1/3 of Brazil EWZ off the table. I do believe we are closer to lows , but no one ever went broke taking profits.

See POSITIONS (scroll down) for details on above and what’s under consideration for 2010. Sorry have not had a chance to work updating this last weekend and will not this weekend either.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Obama’s Brain Freeze

Obama is seeking to Freeze many Domestic programs headlines the NYT today. Also check out Bob S’s & Mama Jama’s recent comment on right side of blog.  We have the answer as to what Obama would cut - domestic programs.

Here we are with a 10% jobless rate and well over 16% jobless rate if you count those no longer on the rolls. US Corporations from IBM to Apple  are growing because they are growing their investments (now well over 50%) overseas. Housing numbers still hurting, banking mess not fixed and the vast majority of US workers and unemployed believe we are in a recession and Obama freezes domestic spending.

It’s a huge flip flop – Stimulate the economy to create jobs – now a year later he cut domestic spending and guess what’s going to happen to jobs & the economy.  Job loss has decreased from -700,000 to about -50,000 per month. Not bad . However, we are still NOT anywhere close to creating the kinds or number of jobs (+250,000 a month) it takes to stimulate a jobs recovery. Take $300 billion of the stimulus away in domestic cuts and hopes of a recovery will evaporate.

When the jobs picture flattens or worsens and Obama asks for more $ to stimulate it you will have a flip flop flip

So maybe this will buy Obama a few points of popularity this week, but it is just what Herbert Hoover did and FDR did. They took away the stimulus too soon and in both cases the depression got a whole lot worse. Bob S first mentioned the FireDogLake site but it has an excellent compilation of criticism on Obama’s move

We the Corporation

Common Cause and Talking Point Memo are both reporting that the recent Supreme Court decision (see past few investors411) opens the way for Foreign Investors/governments who own chunks of US corporations or whose companies are registered in the USA to contribute to US campaigns.

Example  A Saudi Prince or wealthy Chinese investor (really their government) who owns say @ 5% of a US shadow bank will have a lot more power to intimidate or influence any candidate than.  Foreign investors have over the last decade bought huge hunks of American companies and are very influential in corporate board rooms. You the far less wealthy  taxpayer and voter will soon have even less power in YOUR democracy than rich Communists or Arab dictators

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

Stocks rallied a bit in decreased volume. Volume,our #1 confirmation factor of price move, is still very Bearish. We’ve had at least 3 significant falls in BIG increased volume. This is enough distribution (major players moving to sidelines) to turn a market.

AAPL reported after markets close d. This is one of the stocks whose results can move markets. Last evening there was no change in price after its report. Lots of news surrounding a new Apple product Wednesday

Fed meets over next two days – expect little/NO change.

Bernanke reconfirmation vote – Looks like he will get reconfirmed and that should help stocks. But two problems –

1. he/the Fed will be weakened because the Fed chair usually almost unanimous
2. The Fed is like everything else from the Supreme Court on down an almost totally political organization. Any appearance of his independence was shattered by him lobbying senators for his appointment.

State of the Union – Markets are worried about what Obama will do about shadow banks. See Sunday’s and Monday’s Investors411 for more on this. We need to fix the too big to fail systemic problem – this will hurt stocks, especially financials in the short term – but stocks, our democracy and our country will be better off in the long term .

Significant indexes

• McClellan Index at -64.84 =  still significantly oversold.  (see Sunday’s Investors411 for more)

Positions

The  Positions Section (also at top of blog) has the latest buys and sells (Usually updated over weekends)

These are positions I actually own

SELLING & BUYING

Did not pull trigger on any longer term ETF investments. Waiting for state of the Union address to see what Obama does about Shadow banks.

YOUR Stock watch list

NB – I feel much more confident with ETF’s because they reflect global trends than individual stock. Too many things can go wrong with individual stocks.

• SEED – In a buy the dip position directly above 50 day moving average
  
• AAPL – obviously a market mover who again is sitting on its 50 day.
  
• AMZN – Lower highs lower lows on chart – removed from list
• HMIN - Failed breakout . China play. Will recover when  China does.  Will drop from list soon
  
• CAAS – CAAS hanging in there 50 day moving average.
  
• PCLN – Fell below 50 day moving average, but no big volume on downside move. A potential buy in any market reversal.
  
• F – Now less over extended.
• DRWI – New – Big exporter to China -  Was too overextended to buy, and now only a bit overextended. No big volume as stock dropped= good sign. Potential buy the dip.
  
• ENOC – New – Reduces costs for utilities – No big volume behind its recent fall. Potential but the dip when it hits 50 day.
• ATHN – New - Software reduces costs for health care - Broke its longer term bullish trend in big  volume – Will drop from list soon.
  
• IMAX – Great long term chart – falling back to its 50 day moving average. Still a buy the dip opportunity

All these are better buys in an oversold market. That condition exists NOW.

The problem is not knowing how aggressive Obama is going to be about shadow banks/too big to fail institutions.  We should have a good idea by state of the Union – Wednesday night.  You could gamble either way.

Caution – I have continually overestimated Obama when it comes to almost everything. He may be all talk about business accountability and the Paul Volker/Elizabeth Warren faction within his government will loose.

See POSITIONS (scroll down) for details on this and what’s under consideration for 2010. Sorry have not had a chance to work on this last weekend.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

What Would You Cut?

Everybody’s answer or mantra is Waste . But then their minds go blank in describing what waste and how much of the budget that would impact. (extremely small) So lets look at the 2008 budget and you tell me where to cut.

Remember the defense budget has/is exploding higher. Because of our aging population, the next two biggest expenses (Medicare,Medicaid & CHIP) and Social Security are going to expand rapidly. Also debt is going to grow. That’s over 70% of the budget. Let’s take a look at the Safety Net programs that have declined for decades. Would you cut.

• Tax credits on children for moderate/low taxpayers
• Supplemental income for elderly and disabled poor
• Unemployment insurance
• School meals for children, food stamps, housing assistance, aid to abused and neglected children etc.

These programs “lifted approximately 15 million Americans out of poverty in 2005 and reduced the depth of poverty for another 29 million people.”

So what exactly would you or your conservative friend cut? Show them the chart . I did and it left one speechless on what to cut. What would you cut? More info on programs

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

Three major events for week

1. Bernanke reappointment – Now seems likely (from latest Lexus/Nexis news search) = Bullish
2. Obama State of the Union - Is Obama all talk about shadow banks . Too early to tell . If not = Bearish
3. Earnings – As almost aways doing better than expected.

Significant indexes

• McClellan Index at -79.33 =  significantly oversold.  (see Sunday’s Investors411 for more)

FEARLESS FORECAST – Oversold markets will rebound on the Bernanke news, but could get spanked if folks believe Obama has the guts to break up the too big to fail shadow financial institutions. Obviosuly I hope he does. The short term hit to stocks is far better than another possible systemic meltdown where taxpayers bail out big corporations.

We are way oversold so expect a Bullish week.

Positions

The  Positions Section (also at top of blog) has the latest buys and sells (Usually updated over weekends)

These are positions I actually own

SELLING & BUYING

As stated Sunday adding (10% to 20%) to positions because we are so oversold. See Sunday’s Investors411

Whenever I invest in an individual stock I try to set a 7% stop-loss.  That’s a price 7% below what I bought it for that Fidelity automatically sells the stock.

I’ve lost 7/8% on small IMAX & ENOC positions this year. Still own some IMAX bought at 12.9

Note – I’m far more comfortable with ETF’s than individual stocks.

ETF’s – I know its tough to take a chance and buy when everything is sinking, and may sink some more. Decided only to possibly risk 10% of portfolio.

• EWZ – (Brazil) Add 5%
• ? – Haven’t decided yet between EDC, ROH & TYH . All of these are high risk ETF that do 2 and 3 times the indexes they track – emerging markets and techs (Last 2) Would love to see further dip.
  

Will send out by email to group that has email address when I do invest .  If you’d like to get on this list send me an email .

See POSITIONS (scroll down) for details on this and what’s under consideration for 2010.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Poster from 1880

Your Comments

The Day Democracy Died – or the Corporate takeover of America – has received more of YOUR comments (7 public and 4 personal) than any other editorial. We the People , in the USA,  has become We the Corporation. Check out all the insightful public comments (scroll down). Most are listed on the right side of blog.

Fundamentally Democracy has changed in the USA. Investments are taxed at 15% and working class Americans are taxed at

• $8350 to 33,950 = 15%
• $33,950 to 82,250 = 25%
• $82,250 to 171,550 = 28%
• 171,550 to 372,950 = 33%
• above 372,950 = 35%

Bottom line here is that our tax structure encourages investment/gambling on corporations for a living rather than working for a living. People like me are spending more and more time investing/gambling , in part because of the lower tax rates rather than working.

Bottom Line – This adds to the destruction of the work ethic in America . It also make the wealthy who own most stocks, (trust fund children, hedge fund managers, those in the ultra upper class) wealthier. Again the corporations win and working Americans loose.

Even Investors411 is kind of a Dr. Jekyll & Mr Hyde by offering investment/gambling advice while at the same time recognizing that we are all (as one of you put it) on the Titanic (perhaps a better name would be the Good Ship Democracy) rushing from one side to the other.

There is a quantum shift in that investment advice below

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

US stocks got toasted in HUGE volume – AGAIN – Technically – It’s starting to look like a market that is going elliptical to the downside  or a climax sell off. Four reasons were given for stocks big drop this week.

1. China – China was going to tighten credit and therefore growth would slow.  The BDI which measures the flow of goods, specially China imports shows no signs of collapsing  (see below)
2. Obama will go after shadow banks . If successful this would mean to big to fail firms like Goldman Sachs will be broken up into several pieces.  All the shadow banks can now (Supreme Court decision) spend whatever they want (including your tax dollars and the trillions that the Fed is loaning them at 0%) to prevent this.  It’s an election year and within the Obama administration Bernanke, Geithner & Larry Summers are solidly behind the too big to fail banks. Summers even helped to write the legislation that created shadow banks.
3. Bernanke will not get reappointed – Bernanke was one of the arsonist who brought the world to edge of an economic meltdown and one of the firemen to bail it out. If Bernake’s appointment goes down so will stocks. The uncertainty created by a new Fed chair would hurt stocks. But according to most reports Bernanke has won needed support over weekend .
4. There is no V shaped recovery – My best read of the tea leaves is they are right as far as the economy/jobs are concerned. But earnings reports are showing a lot more  big companies with international exposure are beating earnings on the top and bottom lines.

Relevant indexes

• McClellan Index ($NYMO) at -79.33 = significantly oversold .  Well beyond the  @-60 or oversold level.
• BDI -  The BDI/China has come down from highs in mid November. The Baltic Dry Sea Index has leveled off over the last month and started up the last two days.

Two events, outside of earnings which have been rather  good, significantly impact stocks - The Bernanke appointment (Tuesday) and Obama’s State of the Union (Wednesday)

Long term Outlook has changed to NEUTRAL because some key technical levels were broken in big volume.

Positions

The  Positions Section (also at top of blog) has the latest buys and sells (Usually updated over weekends)

These are positions I actually own

I’ve set up two charts. Put them on a split screen and compare. Both are 18 month charts McClellan Oscillator & the S&P 500 Notice that only 4 times in the last 18 month has the McClellan dropped below 80.  Each time it rebounded. It did reach @120 – 3 times  The Oct. 2008 meltdown, The March lows after the Obama election and a 6+% November correction .  3 times the McClellan has reached 80 and rebounded. Once it reached 100.

Bottom Line – chances are good we are going to see some sort of rebound this week. US markets are oversold and could go lower, but this looks like a good place to add 10 to 20% .  If McClellan goes lower (past 100) I’d add more. Fundamentally -  the situation is no where near as bad as it as at the beginning of 2009.  Working class American’s are going to suffer – but stocks with International exposure to emerging markets are going to flourish.

Everybody else is selling, now we start to buy.

SELLING & BUYING

More on exact buys and Sells on Monday.

See POSITIONS (scroll down) for details on this and what’s under consideration for 2010.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

1/21/2010

The Day Democracy Died

We the People , in the USA,  just became We the Corporation . In a real sense all campaign finance reform has been virtually abolished . The US Supreme Court in a partisan 5-4 decision gave corporations and their lobbyist (or any entity) the permission to spend whatever they want on any election . Any candidate who dares stand against any wealthy special interest can be threatened and overwhelmed by money in an election. For more read the lead NYT editorial The Court’s Blow To Democracy

It may take a few years for the real impact to be felt. Here are s ome examples

• Locally – Developers and corporations will be far more able to buy town and state politicians who appoint the local zoning boards and make the laws. If they want to put a strip mall next to your home and crush the value of the houses in your neighborhood they can.  Businesses on the local and state level will get to pay less taxes and YOU will have to pay more.
• Big Shadow Banks – YOU bailed out the big banks for their mistakes and they got HUGE bonuses. Forget Obama’s declaration to fight the Shadow Banks. Goldman Sachs (4.3 billion in profit last 1/4) and the other shadow banks know can throw billions at politicians that oppose any taxpayer bailout. The bailout era may have  just begun .
• Military Industrial Complex – Any weapons company knows it needs a war and fear mongering to grow profits.  Now they can spend whatever they want. The criteria for choosing a weapon will also change from its effectiveness to whichever company has the most money to intimidate a politician. If a poll doesn’t support a war/weapons system they can overwhelm him/her in a reelection with money.
• Monopoly s – The biggest winners are the biggest companies. In every industry the most powerful company rules. It will be far easier forcing smaller competitors out of business once the giant corporations own local state and national politicians. Example EXXON – The biggest corporate entity will have the most money and therefore own the most politicians. Each competitor will get shoved aside or gobbled up starting with small business and ending with their major competitors.
• Freedom -  No other functioning democracy allows the legal corporate buying of politicians . People have the power in these democracies. The corporate board rooms in the USA will be the oligarchy where decisions are made on everything from taxation to your freedom if you dare to challenge their power.
• Taxpayer – The taxpayer has been thrown under the bus.  As corporate taxes fall either deficits will grow or you will be forced to pay the difference.

There will be some corporations and individuals (perhaps Google & folks like Warren Buffett) that will work for the betterment of the world. But greed/profit is the bottom line for corporations. Your $25 contribution or work for a candidate can be overwhelmed by Exxon’s or Shadow Bank’s  $2.5 billion contribution. Our constitution centuries ago was  created for We the People – now its changed to We the Corporations. Remember yesterday 1/21/2010. If there is no change – Democracy as we know it has died.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

US stocks got toasted in HUGE volume.

Obama threw down the gauntlet at the shadow banks and stated he never wanted to see an institution that was too big to fail. "Never again will the American taxpayer be held hostage against these banks that are too big to fail."

However, the Shadow Banks now have the power (see above) & enormous amounts of money (lots of it your tax dollars) to defeat any meaningful reforms.

• McClellan Index at -49.56 = Almost significantly oversold.  Only 10 points till  @-60 or oversold.
  

Sorry, just too upset about Supreme Court decision to even think about stocks.  However, obviously, investing in the biggest corporations, in the long term will make the most money.

Positions

The  Positions Section (also at top of blog) has the latest buys and sells (Usually updated over weekends)

These are positions I actually own

SELLING & BUYING

See POSITIONS (scroll down) for details on this and what’s under consideration for 2010.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING