Investors 411 Blog

$ Health Costs to Rise Again$

Yet another major survey showing health care cost will rise again for you next year. Link to Kaiser Foundation study in WaPo – Here

• prices increased 130% over last 10 years
• next year 41% of businesses said they will increase percentage workers pay for heath care premiums.
• 8% will drop health care entirely
• 9% will tighten eligibility for health care
• From Mercer consulting - 2/3 of employers plan to raise what workers pay for heath care next year.

Major business lobby (Business Roundtable ) states – if current trends continue, annual health-care costs for employers will rise 166 % over the next decade — to $28,530 per employee-

If you’re a business big enough to be listed on any stock exchange where are you going to go for a sophisticated labor force – Will you go to a country that will charge $28,530 more for an employee? Wonder why jobs will lag the recovery in the USA. This is one huge reason why.

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Bill out of Senate on health care possible today, then everything goes into committee. – Max Baucus the, the Democratic Senator that is heading up the Health Care reform has received $3 million from the insurance companies fighting health care reform. Story LINK.

91% of Baucus’s campaign contributions come from outside Montana. (Wikipedia)

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals and Fundamentals

Technically, both the NASDQ & the S&P rallied in increased above average volume = Bullish sign

The volume is still nothing like the volume we saw in the first 1/2 of 2008.

Fearless forecast for this week - Down early, as dollar stabilizes and fears of regulation (see below/above). But, rallies are getting bought into. So prediction is for another positive week. Repeat – this current rally is based on the dollar falling – Best read of tea leaves is for the oversold dollar to rally for at least a day or two.

Outside of a major event, like Israel bombing Iran, the Fed raises interest rates it looks like stocks will continue to rally into the end of the year.

Some old money is beginning to come back into US markets. Best example of this is GE , the mother of all conglomerates is up 10%+ in huge volume over the last two days. GE is the kind of investment more conservative investors or those on the sidelines like to hold for the long term. Not recommending this as an individual play right now, because it looks a lot like climax selling (going up too far too fast in huge volume) and would wait for a pull back.

Bernanke – “From a technical perspective the recession is very likely over.” – but a slow recovery including jobs.

Obama – Gave a speech on how far we had come since he took office Market zizzles, job loss down from 700k to 200k, and we are no longer loking over edge of economic cliff.

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Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . The BDI has leveled off and started to rise over the last few weeks. BDI fell a minor -19 yesterday. They are small losses,but the index has fallen 3 days in a row. BDI trading at 2431 and has recently formed a resistance level at 2388. Would not trust any rally, especially in foreign exporting countries if the BDI breaks down below this number.

Each day this still looks more like a base has been formed above a key support level Longer flat bottoms and slowly moving higher/lower is usually indication of, at least, a short term bottom-Bullish short term outlook for BDI and we have certainly recovered from the devastating lows of Dec./Jan. 2388 is number to watch We are getting mighty close to support levels . Another down day is reason for caution.

The BDI is 41% off its high (early June) Before that it gained almost +170% from early April to Jun e

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$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

The dollar has fallen 7 days in a row.  It dropped  -0.18% yesterday. Dollar trading at $76.41. Rate of fall has slowed dramatically and it looks like at least a short term reversal is likely. The last two days have seen rallies in the dollar crushed. There is a support level around $76 (lows from Sept & Aug. of last year)

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

Last year’s low was around $71, so there is a long way to go before the next major support level.

Positions

The whole Positions Section has been revised (Click on “Positions” at top of blog).

Added another 5% to portfolio of  SPX (at 1038) Added another 5% of SPX at 1045 yesterday

GLD (gold ) – Investors411 already has a 5% position in GLD. A sh0rter term play. Added another 5% yesterday at $97.5 .

Reasons – This is gold’s third attempt at breaking out over $100 – its major resistance level.  Technically, there is strong volume behind this move and the end of the year has historically been strong both technically and fundamentally for gold (lots of religions have holidays and gold given for gifts) This time gold is getting an added push at resistance because  of the falling dollar & countries printing gobs of money (future inflation). Looks like gold will shine.

Plus if GLD can break above $100.44 (Its resistance level or all time high) a lot of people who bet against this happening will be forced to cover their short bets.

Will be adding more positions on dips – Unfortunately the dips are very small. Like both EWZ (Brazil) & FXI (China) & EWY (S. Korea)

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

“He Saved More Lives Than Anyone in Human History”

AP Photo by Bill Meeks

Nobel Prize winner Norman Borlaug died Saturday and American Corporate media ignored the passing of a man who “fostered a movement that save up to a billion lives.” Borland won the Nobel Peace Prize for fighting Hunger

Borlaug grew up on an Iowa farm and developed a type of wheat that helped feed the world. It’s interesting who American media chooses to honor with headlines. You can rad more about “The Father of the Green Revolution” here & here &  HERE

If our plant survives, Borlaug is one of those name will be remembered.

Your Doctor Accepts Heath Care Reform

A 2000 physician survey published in the prestigious New England Journal of Medicine LINK shows 73% “were willing to accept limits on reimbursement for expensive drugs and procedures for the sake of expanding access to basic health care.” This is quite a remarkable stat since this means a pay cut for doctors.

Can you imagine  the Gordon Gekko’s of Wall Street, your basic American politician, Shadow Bank executives, the Insurance Industry, the Pharmaceutical companies, & the Military Industrial complex taking the same stand?

Bank Robbers

(see Bottom Line below in red )

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals and Fundamentals

Obama spoke at noon yesterday and threatened reforms to fix the problems that cause the economic meltdown – Markets rallied – To put it bluntly – the rally was basically Wall Street laughing out loud over fear of his reforms. Wall Street owns far too many politicians, including those in his administration to worry.

Bottom Line – A bank robber steals from a bank and you catch him. He gets punished. A shadow bank top executive steals from a bank in a ponzi scheme and you give him more money or else he will shut down his bank and no one will have any money. Perhaps shadow bank executives lost a small, portion of his/her wealth when the bank’s stock dropped, and a few top dogs lost their jobs – but, so far, that’s all folks.

Fearless forecast for this week - Down early, as dollar stabilizes and fears of regulation (see below/above). But, rallies are getting bought into. So prediction is for another positive week. Repeat – this current rally is based on the dollar falling – Best read of tea leaves is for the oversold dollar to rally for at least a day or two.

Mantra - Protectionism is the great danger to worldwide economic recovery. A trade war especially between the USA and China would be about a big a hit to any recovery.  Yesterday – US and China are “bickering over tires and chickens,” This kind of news should have hurt stocks, but did not. LINK = Bullish when stocks react positively to bad news. However something to watch for further developments.

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Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . The BDI has leveled off and started to rise over the last few weeks. BDI fell a minor -17 Monday. BDI trading at 2451 and has recently formed a resistance level at 2388. Would not trust any rally, especially in foreign exporting countries if the BDI breaks down below this number.

Each day this still looks more like a base has been formed above a key support level Longer flat bottoms and slowly moving higher/lower is usually indication of, at least, a short term bottom-Bullish short term outlook for BDI and we have certainly recovered from the devastating lows of Dec./Jan. 2388 is number to watch

The BDI is 41% off its high (early June) Before that it gained almost +170% from early April to Jun e

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$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

One big reason Investors411 is currently  focusing more on US equities (XLF & SPX ) is because of the drop in the dollar making foreign exports more expensive in the US and US exports less expensive abroad. However, On the whole an orderly/slow drop of the dollar helps US markets and a case can be made that it helps worldwide recovery.

The dollar has fallen 6 days in a row.  It fell less again yesterday, but still dropped a small -0.07% yesterday. Dollar trading at $76.61. Rate of fall has slowed dramatically and it looks like a short term reversal is likely. 

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

Last year’s low was around $71, so there is a long way to go before the next major support level.

One major downside – The falling dollar shows a lack of confidence in the USA

Positions

The whole Positions Section has been revised (Click on “Positions” at top of blog). Check it out

Added another 5% to portfolio of  SPX (at 1038)

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

“You Lie Boy”

Remember back in Oct. of 2002 when over 100,000 protesters gathered in Washington to protest the Iraq war. Even the supposedly left leaning Washington Post buried the story in its metro section. The paper’s ombudsman later lamented, “a couple of ho-hum photographs that captured the protest’s fringe elements.”

The Same WaPo puts on the front page Sunday, an anti government protest organized by the right wings favorite cable channel (Laughably called FOX news ) of “60,000 to 70,000 almost exclusively WHITE pro corporate interest protesters . The WaPo is only the tip of the corporate mainstream media that has focused on screaming protesters depicting opponents as Nazi’s or socialists rather than on the substance of heath care. LINK

This is no surprise when you consider Pew Research’s statistic that “the politics and the protests of health care, accounted for a staggering 62 percent of all cable news coverage” for one week in mid August.  LINK

Your comments recently have captured this inequity and American’s media focus on the disruptive lunatic fringe elements as a way to hide any legitimate discussion of the issues.

• From  a personal email – Other significant health care issues not discussed LINK to article
  
• From Doggie’s Mom – “Let’s get back on track” LINK
• From Bob Sadinsky – “the race card… Of the 47 million without coverage, I am sure that mainstream thought is that they are either Slackers, Black or Latino or Illegals. So why should my money go to cover them and worse yet,why should my coverage suffer so these “people” can be covered. LINK
• From NYT’s Maureen Dowd – “You lie boy” LINK
• From Think Progress A Sunday protestor (Fox media fan) on why Obama will opress white America video LINK

More and more its looking like the mainstream media is bias is promoting, but hiding an ugly racial divide that is growing in America.

Anniversary of Meltdown

On the eve of the collapse of Lehman Brothers and the near collapse of financial institutions throughout the world, President Obama has a major address today.

Sherwehe , who has sent in some other very enlightening emails refers to an article in Vanity Fair entitled “Good Billions after Bad ” LINK to article

The lack of regulations to the “free market” got us is into the worldwide recession. Even Alan Greenspan admitted this. But as good as Obama’s speeches are his administration sure looks like a paper tiger when it comes to doing something. So far no real corrections have been made. Printed $ and tax payer funds have been given to shadow institutions throughout the world. OK, financial markets are recovering, but while their stocks have sizzled reform has fizzled.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals and Fundamentals

Technically Friday’s slight loss in falling, below average volume , is just what bulls like to see.

Fearless Forecast for last week – ” is for a down week” – Except for Friday markets rallied – Therefore, prediction correct

Fearless forecast for this week – Down early, as dollar stabilizes and fears of regulation (see below/above). But, rallies are getting bought into. So prediction is for another positive week.

The second long term risk – Protectionism – If the BDI breaks down further is means huge cargo ships are sitting empty and protectionism is growing throughout the world.

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Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . The BDI has leveled off and started to rise over the last few weeks. BDI fell a minor -22 Friday. BDI trading at 2468 and has recently formed a resistance level at 2388. Would not trust any rally, especially in foreign exporting countries if the BDI breaks down below this number.

Each day this looks more like a base has been formed above a key support level Longer flat bottoms and slowly moving higher is usually indication of, at least, a short term bottom-Bullish short term outlook for BDI and we have certainly recovered from the devastating lows of Dec./Jan.

The BDI is 41% off its high (early June) Before that it gained almost +170% from early April to Jun e

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$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar. The multi year chart gives you a much better picture of  where we seem to be headed (down) and the next major resistance level. An orderly/slow fall in the dollar is good for the majority of S%P companies that make most of their $ abroad. Dramatic longer term falls indicate loss of confidence in America.

One big reason Investors411 is currently  focusing more on US equities (XLF & SPX ) is because of the drop in the dollar making foreign exports more expensive in the US and US exports less expensive abroad. However, On the whole an orderly/slow drop of the dollar helps US markets and a case can be made that it helps worldwide recovery.

The dollar has fallen 5 days in a row.  It fell less, but still dropped -0.17% yesterday. Dollar trading at $76.68 Short term Bullish for most stocks

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

Last year’s low was around $71, so there is a long way to go before the next major support level.

Positions

The whole Positions Section has been revised (Click on “Positions” at top of blog). Check it out

This is a dollar dropping rally. Don’t get a sugar high from it.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Cautious Optimism on Stimulus

Christina Romer

We’ve come back from the edge of the financial cliff, Stocks have rallied significantly, & Job loss has decreased from @700,00 a month to 216,000 last month.

“We have absolutely seen a change in trajectory,” said Christina Romer, top White House economic adviser. White House said that translated to about “one million jobs that would have been lost without government efforts “

There have certainly been many different government programs along with the Fed that have change the financial picture – In its first report to Congress on the stimulus, the White House Council on Economic Advisers said the economy was improving and would have been far worse without the stimulus . LINK

Also Treasury Secretary Tim Geithner both in front of congress and on the CNBC echoed some of those achievements and future problems – LINK

One interesting point is besides these economic gains $80 billion have come back in from the loans.

Making $ off the Stimulus

Instead of editorializing on the stimulus, let’s take a look at how to trade/invest on this huge amount of cash stimulating the US and the world’s economy and make your portfolio grow. Some significant points.

• The Chinese stimulus is over twice as large as the US relative to the GDP of each country. Their stimulus is more focused (one political party) and faster acting. We’ve already seen a far bigger move in their market than ours. This should continue. Invest in China
• US has guaranteed the solvency of the giant “too big to fail” shadow financials. Smaller banks are not covered and getting toasted. From the best Goldman Sachs t o the worst AIG & Citi , if the government is going to guarantee your survival you have a huge advantage. Invest in too big to fail shadow financials
  
• All the printing of money,taxpayer stimulus, & government loans is forcing the dollar lower. The US is a deficit nation. This forces commodities (traded in dollars) higher. Invest in commodities – Copper, Gold, energy & and energy rich countries – Brazil

Health Care

One of you sent in the a link to different views on health care from the NYT. Will post this on the comments section of the blog. This echoes a comment made by Doggie’s Mom.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals and Fundamentals

NASDQ continued its breakout move. Both the Dow & the S&P, joined the NASDQ  broke out to new yearly price highs yesterday. Small cap stocks (Russell 2000) broke out two days ago. – Bullish sign

Up five trading days in a row for major indexes – we’re getting a bit oversold.

This rally is very much related to the dollar dropping. According the talking heads over 1/2 of the profits of the S&P 500 come from foreign countries – so when the dollar drops their profits grow.

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Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . The BDI has leveled off and started to rise over the last two weeks. Flat yesterday +01 yesterday.

Each day this looks more like a base has been formed above a key support level Longer flat bottoms and slowly moving higher is usually indication of, at least, a short term bottom-Bullish short term outlook for BDI and we have certainly recovered from the devastating lows of Dec./Jan.

The BDI is 41% off its high (early June) Before that it gained almost +170% from early April to Jun e

——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

The dollar dropped of the table and through its major support level three days ago and has continued to fall.  It fell -0,30% yesterday. This added drop is confirmation of the technical breakdown the day before. Dollar closed at $76.81. Its  major support level is @$77.5 . After 11 days of consecutively being up one day and down the next, the dollar has fallen 4 days in a row. Short term Bullish for most stocks

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

Bottom Line – Both the BDI & the Dollar are forecasting at least a short term rally.

Last year’s low was around $71, so there is a long way to go before the next major support level.

Positions

The whole Positions Section has been revised (Click on “Positions” at top of blog). Check it out

Instead of waiting for that illusive 5 to 10% dip to invest nibble a little bit now. This is a dollar dropping rally. Don’t get a sugar high from it.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Obama’s Back

AP photo by Jason Reed

Last night American’s saw the Obama they saw during the campaign as he took leadership of the heath care debate. CNN saw a 14% rise in acceptance of the “Obama plan” from those who watched the address to congress. LINK . 67% supported “Obama’s plan” and 29% opposed him.

One Republican congressman, who later apologized, shouted out that he was a liar. Be prepared for a lot more shouting, false accusations, and disruptions from the party of NO. When you don’t have the facts on your side trying to shout down, and making repeated accusations prevents rational debate. Unfortunately it does work because American corporate media focuses on that instead of the facts and reasoned debate. Obama this time was armed with eloquence and details (substance) – LINK

Video, written parts of speech LINK

If health care costs keep growing (doubling every 7 to 10 years – depends on whose stats you use) individuals, medicare recipients and small businesses will be devastated .

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals and Fundamentals

NASDQ (think mostly tech stocks) Had and increased, above average volume breakout to a new yearly high. – Bullish sign

Up four trading days in a row for major indexes – we’re getting a bit oversold.

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Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . The BDI has leveled off and started to rise over the last two weeks, +29 yesterday.

Each day this looks more like a base has been formed above a key support level Longer flat bottoms and slowly moving higher is usually indication of, at least, a short term bottom-Bullish short term outlook for BDI and we have certainly recovered from the devastating lows of Dec./Jan.

The BDI is 41% off its high (early June) Before that it gained almost +170% from early April to Jun e

——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

The dollar dropped of the table and through its major support level two days ago It fell -0,28% yesterday. This added drop is confirmation of the technical breakdown the day before. Dollar closed at $77.04. Its  major support level is @$77.5 . After 11 days of consecutively being up one day and down the next, the dollar has fallen 3 days in a row. Short term Bullish for most stocks

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

Bottom Line – Both the BDI & the Dollar are forecasting at least a short term rally. Key to look for is can the dollar get back over its $77.5 support level?

Positions

The whole Positions Section has been revised (Click on “Positions” at top of blog). Check it out

Have to update positions section (away all weekend) Investors411 problem is that we are under invested in equities. The predicted 5 to 10% correction this month almost happened last week (-4+%), but close doesn’t count. Investors411 sold 6% of portfolio which was invested in FXI (China) for a 55% profit.  FXI still 12% of portfolio is in China and will increase this at first minor dip.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

The End of Democracy?

E.J. Dionne who writes primarily for the Washington Post had an editorial entitled It Could Be the End of Democracy as We Know It . LINK

What Dionne is referring to is an upcoming Supreme court decision that threatens to overrule a 1990 decision that upheld the long-standing ban on corporate money in campaigns.

Yes, McCain/Feingold legislation made it much harder for corporate giving and it still got through. However this legislation would open the floodgates.

HAVE WE so quickly forgotten the #1 lesson of the 2008 economic meltdown-that Greenspan as he admitted was wrong and “free markets” could not regulate themselves ? This week US corporations may be given unfettered access to buy politicians. Indeed as Dionne explains “President Barack Obama’s health care speech on Wednesday will be only the second most consequential political moment of the week.”

Quantum Shift in Savings

Another unheralded event is not making headlines. That the quantum shift of Americans from net borrowers to savers . Since Reagan took office and reversed the trend of diminishing national deficits (see last Thursday’s blog for data on deficits as part of GDP) The shop till you drop,go into debt up to your eyeballs era is coming to a close for the American consumer.  MSNBC reports that in July “Americans cut debt by $21.6 billion in July; $4 billion was expected” LINK

Some conclusions from this data:

• How is there a quick economic recovery if American’s save more?
• Saving more is obviously a good thing and increasing debt bad.
• Real Organic growth is going to come from outside the USA (countries like China who were huge net savers and are saving a little less now)

Financial flows like this reinforce the concept that in the USA any recovery in GDP is going to be slow to materialize and real organic growth is going to be led by emerging markets whose middle classes are growing and don’t have huge deficits.  Even countries like Germany who have been net savers and whose businesses do not worry about paying health care costs are at a distinct advantage over the USA.

This is why Investors411 focuses on foreign ETFs that have organic growth and growing economies/middle classes – Invest in where the money is and will be flowing

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals and Fundamentals

Major US indexes rose again.  This time volume rose,but was still below average.  Stocks are rising because the dollar is falling. It took a massive hit yesterday.

This week , FEARLESS FORECAST - is for an up week .

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . The BDI has leveled off and started to rise over the last two weeks, +33 yesterday.

Each day this looks more like a base has been formed above a key support level – Bullish short term outlook for BDI and we have certainly recovered from the devastating lows of Dec./Jan.

The BDI is 41% off its high (early June) Before that it gained almost +170% from early April to Jun e

——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

The dollar dropped of the table and through its major support level. It fell a whopping-1.16% % yesterday. Dollar closed at $77.26. Its  major support level is @$77.5 . Short term Bullish for stocks

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

Bottom Line – Both the BDI & the Dollar are forecasting at least a short term rally. Key to look for is can the dollar get back over its $77.5 support level.

Positions

The whole Positions Section has been revised (Click on “Positions” at top of blog). Check it out

Sold 1/3 (or 6% total stock) position in FXI (China) last week A Mistake . With both the dollar falling and the BDI finding technical support and rising China again looks like the place to be invested in. Investors411 has only 12% of its portfolio invested in China. Looking to now add to this position.

Individual stocks-Another reason I hate individual stocks is because an event like a big conference can impact the stock. Apple has one of those today.  Will Steve Jobs show up? How will he look, what new product will they feature? – I have no idea on how to answer these questions that will move the stock. All I know is technically it outperformed the major US markets and like NVS is at a new high.

Taking advantage of falling dollar. There is a downside to a falling dollar, especially a currency that falls like a stone. However for most American companies that rely on exports for real organic (not cost cutting) growth benefit from this.  It also inflates the prices of commodities. Its no accident that as the dollar reaches a yearly low commodities like gold, oil, and copper reach highs. So any country or commodity play looks good right now.

Right now Investors411 is caught with its pants down because we are not more fully invested in countries & sectors where the money is flowwing.

Have to update positions section (away all weekend) Investors411 problem is that we are under invested in equities. The predicted 5 to 10% correction this month almost happened last week (-4+%), but close doesn’t count.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Wall Street Journal and Stimulus

The weekend WSJ had a lead editorial (you have to subscribe to get the editorial) that suggested the remainder ($400 billion) of the stimulus should be given to American business in the form of a tax cut .  The WSJ does, of course, have a "supply side/free market" economic bias that is to enrich the companies they write about. What is good for Wall Street in the short term is often quite the opposite for the long term well being of the country and even stocks. Best example is the WSJ support for "free markets" to regulate themselves greatly intensified the worldwide recession. (see past Investors411)

If you cut taxes for business here’s what happens-

• The money could go into a stock buyback
• The money could go into dividends
• The money could go into bonuses for top executives
• The money could go into research
• The money could go into hiring new workers  – First choice to hire is, of course, cheaper labor outside the US that does not have  heath care or has fully paid health insurance by the country.

Stimulus value for the American economy is minimal, but for the individual company its great. The stock market is recovering quite well on its own, why do we need to cut its taxes more?

If you offer a stimulus plan that gets money flowing and more people buying products – business also grows, but so does the economy because more money flows. I’ve given two examples, but there are others in the stimulus program

• The $8000 first time home buyer stimulus . This works in a myriad of ways Some – Stimulates a much larger purchase ($100,000+ homes), new homes need new appliances, increases property values of surrounding homes, helps fix the declining foreclosure crisis, could result in more construction jobs etc. In short much more money flows and demand grows.
• The Cash for Clunkers progra m – Even if you factor in only the cars built in America (60% – see your emails) This encouraged the purchase of the remaining 2009 inventory, put more efficient cars on the highway, gets more money flowing (purchase of a $20,000 car).

In short DEMAND increasing and MONEY FLOWING among more people makes an  economy grow far faster than simply cutting taxes on business which has almost no impact on demand and gross money flows.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals and Fundamentals

Major US indexes rose in light decreased volume on Friday.  The decreased volume show indecision of investors and traders over the jobs data.  The jobs rate fore from 9.4 to 9.7% but the job loss fell from 247,000 to 216,000 jobs. Over 1/2 the job loss was in the manufacturing and construction sectors.

Last Week , FEARLESS FORECAST – "is for a down week ." Major US markets were down as well as most world markets .

This week , FEARLESS FORECAST - is for an up week .

Major news for the week is going to be Obama’s health care speech on Wednesday. Anything less than a clear full & forceful  commitment  to a public plan for heath care will give insurance companies and some major HMO’s a quick boost in price.

Bottom line here is Wall Street will probably come out of this with the feeling that they own or have broken the Obama administration.  This should add to stock prices in the short term.  The long term is a different story (more later).  The BDI has also started to level off and formed a base. (see below)

History – In 1929, right before the great depression, the market reached its high on the Tuesday after Labor day

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Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . The BDI has leveled off over the last 9 days , +17 yesterday.

Unfortunately, since early summer we have created  lower lows and lower high that confirms both the mid term bearish trend .@ 2298 is a major area of support and the BDI has fallen since early June from 4291 to 2413. This is just 115 points away from a major support level.

The 9 days of relatively flat trading could be a technical base forming just above the BDI’s major support level.  The 17 Friday is a small,but hopeful move in a bullish direction.

The BDI is 41% off its high (early June) Before that it gained almost +170% from early April to June

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$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

The dollar was fell -0.35 % Friday. Dollar closed at $78.16. Its  major support level is @$77.5 & it has 2 major resistance levels – a falling 50 day moving ave. at @$79.o0 and the August highs of @ $79.5 .  If it breaks down through support stocks should rise, if it breaks up through resistance stocks should fall.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

For an unbelievable 11 straight days the dollar has reversed direction – One day up and the next day down.  If the dollar goes in the same direction two days in a row you might call it a trend.

Positions

The whole Positions Section has been revised (Click on "Positions" at top of blog). Check it out

Sold 1/3 (or 6% total stock) position in FXI (China) Boy this sure looks like a mistake this AM

My bias – I will be away at an art show this weekend & I tend to get conservative when I’m not near my computer. – Too scared of bad jobless figures on Friday. The decrease

Your Comments

Both privately and in the comment section of the blog you are asking for individual stock recommendations. OK I have a few. NVS (Novartis)-  a swine flu play (46% of US flu vaccine) and Apple computer – AAPL (Apple is moving into China)

I bought both these stocks early last week. Please remember this is a trade rather than an a longer term investment. I have a predetermined 8% loss price that I will get out. What I have is a trailing stop which means if the stock goes up so does the stop.  Will take 1/2 profits with a @8% gain and let the rest ride.

Both stocks have decent technical charts, a fundamental story, & if markets move higher, they should outperform like they did Friday. (Buy the dip)

I do not like recommending individual stocks and much prefer ETF’s. Sectors are easier to understand, more liquid, and less likely to dramatically fall.

GLD – our 5% position in gold is doing quite well

Have to update positions section (away all weekend) Investors411 problem is that we are under invested in equities. The predicted 5 to 10% correction this month almost happened last week (-4+%), but close doesn’t count.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Sorry limited time this AM -Shortened Update

US Oligarchy is Kicking Ass

Political overview

One of the classic battles in every country is between the rich oligarchy and the people. In some countries like China, even though there is lots of corruption and pollution, the middle class is growing and they have a government surplus.  In the US the oligarchy is clearly winning & the middle class shrinking and the debt growing. The new administration has made little difference.

• The military industrial complex oligarchy is growing even as Afghanistan (Obama’s "necessary" war) has, like Iraq, become an unpopular war (poll numbers well below 50%).

• The big shadow bank oligarchy is winning. They don’t have to mark their profits to market, have received huge bailouts, still take exorbitant salaries, & no serious methods of regulation have been introduced to regulate them. Little hometown banks getting toasted.

• Small American business, the middle class, and medicare recipient can not compete with other countries or maintain anything resembling the same lifestyle if health care costs rise another 100%. (see past Updates)

• Massive debt built up by past Republican administrations is now being added to by Obama as he stimulates to keep us from falling into another great depression. The oligarchy used to pay a far greater share of this debt – now YOU (mom and pop) do.

Stocks

Everything hinges around the jobs number today .  The back ended stimulus program is working. Some private sources are showing the stimulus creating 500k to 700k jobs.  But these are temporary and in a year or two will run out.  The oligarchy in the big companies that are recovering will hire cheaper labor abroad. (see above)  One big added incentive is they will NOT have to pay growing health care costs if they hire foreign workers from Europe to China.

Markets have been reacting poorly to good news so there is a lot of temporary downside risk possible with today’s announcement.

The good news for markets is Obama will probably cave in on the public option in his speech on Wednesday.  This means the insurance oligarchy has won . Big US companies will not be impacted because they will hire abroad. Small business will get hurt because of the increased cost of heath care.  But most of these small companies are NOT on the major US stock exchanges.

This is perhaps the last chance to fix Health Care in the US.  It’s 16% of GDP and growing. Far less in all other other countries. Economically its hard to see Americans climb out of the growing hole – health care, energy dependence and debt along with an unregulated oligarchy have a strangle hold on government. However, it is plausible to see stock prices increase, because globalized (larger) American companies will hire abroad and make new profits from emerging markets.

All this doesn’t happen overnight, but continues to be the direction we are heading.

Barr

PS – You’d think after the oligarchy’s greed and corruption became so transparent after the shadow bank meltdown last September there would be some larger cry for change.

Obama’s Speech

Yesterday, the administration announced a major address on Health Care  for next Wednesday – Will he take a Stand or whimp out again? From all accounts the White House is still split on what to do. From Politco “High Risk High Reward” LINK & “Obama to Address Congress” LINK

Simple reality is that like in the last 7 to 10 years health care is going to double again. Medicare as well as Americans not on Medicare are in danger of going under unless something dramatic is done.

Will you, your employer, Medicare be able to keep up with another 100% increase? Why do we pay almost twice the cost of other industrialized countries who cover all their people and they get better results?

Jobs & GDP & Deficits

What happens in a recession is jobs get cut and when they get added back American companies choose cheaper foreign labor. This is one major reason employment has been a lagging indicator in recessions.

The back ended stimulus is going to mitigate the job loss – keeps jobs in education, law enforcement, construction etc. But this has its cost in increasing the deficit. The problem here is we already had a huge deficit when Obama took over and it is obviously growing. Not good news.

The other major problem is  growth is the USA over the last decade had a lot to do with phony financial transactions made by shadow banks. (phony accounting)  Therefore, real growth in the USA was a lot less than 3 or 4% over the last decade. Under Obama we longer use mark to market accounting.  Obviously, I’m no expert, but willing to bet this reduces our GDP by at least a few points under Obama & Bush.

One major fact – the huge increase in deficits under Reagan/Bush upset almost no Republicans.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals and Fundamentals

Yesterday’s stock action confirmed the big downside move of the day before. Prices did not recover any of the losses and dropped further despite the fact that the dollar also fell. The dollar falling almost always translates into stocks rising.

A week ago I mentioned that Jim Cramer was wrong and we were due for a more significant correction. Yesterday failure to move higher on good news and marginal losses act as confirmation of a further decline.  The only technical point that is starting to swing in the bulls favor is that the Dow and S&P (SPX) have been down 4 days in a row and are a bit oversold. Would expect a rally today because of oversold positions

Support levels to watch on benchmark S&P 500. SPX currently at 995. The first is 980 . If that falls we could see a lot deeper correction .  Lots depends on the jobs data on Friday.

Lots of analyst look at this as a technical correction.  We came too far too fast. But there is a major underlying fundamental factor. The BDI shows worldwide trade falling. Much of this is due to China pulling back on buying commodities. China also has a technically overheated market. (see yesterday’s blog)

The big news for the month is the jobs report on Friday Right now we reacted so poorly to the good ISM (manufacturing) news, and yesterday’s dollar falling(which should have juiced stock prices), you have to worry about the employment news.

Therefore , FEARLESS FORECAST – is for a down week .

A major correction is underway many in some major exporting countries (China – see past Investors411), and importing countries (USA) seem to be following the downtrend.

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Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . The BDI has leveled off over the last 5 days, -10 yesterday

Unfortunately, since early summer we have created  lower lows and lower high that confirms both the mid term bearish trend .@ 2298 is a major area of support and the BDI has fallen since early June from 4291 to 2413. This is just 115 points away from a major support level.

“Remember almost every country has based their recovery on exporting their way out of this mess” (Source – seeking Alpha)The infotainment financial channels and analysts used the BDI when things were going well and are now ignoring it. The #1 factor behind the BDI’s retreat is China seems to have stopped or seriously slowed down buying of commodities.

The BDI is 41% off its high (early June)

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$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

The dollar was fell -0.44 % yesterday. Dollar closed at $78.74. Its  major support level is @$77.5 & it has 2 major resistance levels – a falling 50 day moving ave. at @$79.20 and the August highs of @ $79.5 .  If it breaks down through support stocks should rise, if it breaks up through resistance stocks should fall.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

The fact that the dollar fell a relatively significant -0.44% and stocks did NOT rise is another Bearish sign

The dollar is also reversed direction 9 days in a row. So today its probably going to go up and stocks down.

European Central Banks left interest rates unchanged this AM – Bearish for dollar & Bullish for stocks

Positions

The whole Positions Section has been revised (Click on “Positions” at top of blog). Check it out

Sold 1/3 (or 6% total stock) position in FXI (China) yesterday This position was bought on 3/12 (listed incorrectly in Positions as 3/20) Gain @+55% This will probably be the biggest gain of any position this year. The remaining 12% – 2% was purchased 3/12, 8% was purchased in April and is up almost +20% and the recently  2% is down perhaps -5% (Did not have time to accurately check these last 2 figures)

Right now, this is NOT some huge reversal, but a correction of an overheated market. If the BDI continues to fall from current levels, we are much deeper trouble. Plan to get back into FXI ASAP, hopefully at a lower price

Refuting all this is the credible Organization for Co-operation and Development OEDC that headlines “the worldwide recession may already be over.” LINK Sorry think the 41% fall in the BDI is cause for concern.

Those traders with guts may look at a fall to SPX the 980 support level as a buying opportunity or a chance for some quick money.  Right now, the best read of the tea leaves is for a 5 to 10% correction . If world trade prices collapse further through support then things could get worse.

My bias – I will be away at an art show this weekend & I tend to get conservative when I’m not near my computer. – Too scared of bad jobless figures on Friday.

Your Comments

Both privately and in the comment section of the blog you are asking for individual stock recommendations. OK I have a few. Stay tuned. Yes I’ve chosen them – NVS (Novartis)-  a swine flu play and Apple computer. (details when I have more time)

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Obama – Leadership & Polls

Lots have analysts have remarked how fast Obama (now at about +50%) poll numbers are dropping .  The one missing ingredient is leadership.

Yes, Obama has lost  support among Democrats and Independents for nor following though on some of his promises. However, the most visible issue is the health care debate . He is getting slaughtered on this because he has NO POSITION . There is something vague about if nothing’s done medicare will go broke and in another 8 years costs will double. This is True, but what or where is the Obama Health Care plan?

Right now Obama looks like that 98 pound weakling who is getting sand kicked in his face.  They labeled him and his non existent Obama plan all sorts of names and it sticks because he doesn’t have a concrete plan. Unless he chooses something and leads the only way to go is down and the mob will win .

Cash for Clunkers

The best stimulus program to come out of government .  The government spends something like $3,500 and gets the consumer to spent $15,000 to $20,000 on a new more fuel efficient car.

The government is getting the consumer to spend @5 times what it has invested .  That 5 times gets multiplied by fuel efficiencies, tax revenues, keeping manufacturing jobs, and the employees of the dealers and manufacturers spend that money to buy other stuff. This all gets money flowing even faster.

This program should be continued with other big ticket items that can be made more fuel efficient .

The best rival to Cash for Clunkers is the $8,000 stimulus for first time home buyers. This also has a huge multiplier effect.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals and Fundamentals

Major US markets had a significant meltdown in increased above average volume .  BEAR’S RULE the short term momentum and the volume indicates that there is more downside to come.

A week ago I mentioned that Jim Cramer was wrong and we were due for a more significant correction.

Support levels to watch on benchmark S&P 500. SPX currently at 998. The first is 980 . If that falls we could see a lot deeper correction .  Lots depends on the jobs data on Friday. However, we had great manufacturing news and when good news sinks the market – that’s an indication of more pain to come.

Lots of analyst look at this as a technical correction.  We came too far too fast. But there is a major underlying fundamental factor. The BDI shows worldwide trade falling. Much of this is due to China pulling back on buying commodities. China also has a technically overheated market. (see yesterday’s blog)

The big news for the month is the jobs report on Friday Right now we reacted so poorly to the good ISM (manufacturing) news, you have to worry about the employment news.

On financials from yesterday-If you prefer gambling to investing, I’d wait another day or until prices get closer to 200& 50 day moving average before putting bullish chips on the table.

Therefore , FEARLESS FORECAST – is for a down week .

The  jobs report for August comes out Friday most important fundamental of the week. ISM (manufacturing ) report out today.  What’s key here is  we get a good number (above 50 would mean manufacturing growth) If market does not move higher on good number, it is a strong indication that market correction underway. - You betcha-what now looks like a  correction is underway not only in exporting countries, but importing countries (USA)

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . The BDI has leveled off – Up +2 yesterday

“Remember almost every country has based their recovery on exporting their way out of this mess” (Source – seeking Alpha)The infotainment financial channels and analysts used the BDI when things were going well and are now ignoring it. The #1 factor behind the BDI’s retreat is China seems to have stopped or seriously slowed down buying commodities.

——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

The dollar was rose a significant +0.75 % yesterday. Dollar closed at $78.74. Its  major support level is @$77.5 & it has 2 major resistance levels – a falling 50 day moving ave. at @$79.20 and the August highs of @ $79.5 .  If it breaks down through support stocks should rise, if it breaks up through resistance stocks should fall.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

This is the index to watch because its impact is immediate.

Positions

The whole Positions Section has been revised (Click on “Positions” at top of blog). Check it out

The high Beta names are getting beaten up. Financials took a big hit yesterday.   The BDI’s drop and the fall of the Shanghai Index technically (see yesterday’s update) certainly forecasted and forecasts further deterioration. If the BDI has stopped its fall we’re OK

My philosophy has always been why be greedy – China/Brazil in the long run will outperform the USA. But a correction will take those stocks further down.

• If you’re in this for the long term (years) hold onto all FXI & EWZ
• If you’re not let’s sell 1/3 to 1/2 the positions. The gains should be @ 20+% and hopefully buy back in at a lower price

When the BDI starts to recover – reaches a higher high. Then jump back in. Right now, this is NOT some huge reversal, but a correction of an overheated market. If the BDI continues to fall from current levels, we are much deeper trouble.

Your Comments

Both privately and in the comment section of the blog you are asking for individual stock recommendations. OK I have a few. Stay tuned.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!