Investors 411 Blog

Crossroads – Nation Building

Violence in Pakistan

The Huffington Post has become a major focal point in opposition to expanding in Afghanistan.  Site founder Arianna Huffington has an excellent article “Why Joe Biden Should Resign. ” LINK Biden has opposed the Afghan buildup in favor of a focus on Pakistan. Three of you have chimed in on the blog and agree that since Pakistan has Nuclear weapons, many more al Qaeda and affiliates it makes sense not to focus resources (financially 30 to 1 ) on Pakistan instead focus on Afghanistan. 41 were killed yesterday in a coordinated attack on Pakistan Police stations. LINK

Looks like we are going to have a do over election in Afghanistan LINK and then send in more troops for another long costly war.  After that Pakistan, perhaps Yemen, the Sudan, Iran, then back to Iraq.  The LOOOOOOONG war in Afghanistan means nation building in a country whose #1 export is opium not oil.  How are we ever going to get out of debt while spending trillions nation building?

Seems like Obama without Biden is going down the same path as Cheney/Bush .  From an editor in London, Simon Tisdall – “With friends like the US, Pakistan doesn’t need enemies.” LINK Another from Paris by William Pfaff LINK Another from Paris by William Pfaff LINK

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

Last hour rally lifts stocks. Always bullish to close at highs of day. Volume falls. We held onto Dow 10,000 and that’s psychologically bullish. Holding Dow 10,000 into weekend important

Google hit and IBM missed earnings reports. Last night GOOG was up 3% and IBM down 3% in after hours trading. GE and BAC missed this AM.

Good news is NOT having the positive impact it had last quarter. How markets react to news is our #2 confirmation factor. It has turned BEARISH

Warning – Financial sector seems ready for at least a light correction. 1120 on the S&P in technical terms a 50% retracement number. If you don;t know what this means – just think the S&P is at 1097 and there is a big boulder in the road ahead to 1200.

Famed investor George Soros this AM is quoted on CNBC saying  “the US will be a drag on worldwide economic recovery”

Rotation/Sector Rotation

What happens in a bull market is different sectors take over leadership. Leadership rotates. So far in the US – energy, tech and financials have lead. Many foreign markets have broken out before the Dow and other indexes reached new yearly highs. (Brazil, Chile, Australia, Mexico, Germany plus more) The US sector now in the lead is energy. Rotation is what the bulls love to see. It’s like a relay race where another runner picks up the baton or carries the markets.

The supporting themes that juices everything is a falling dollar,  the huge stimulus packages around the world, & bailed out shadow banks/financials.

Oil prices have now also broken out over $77 (new yearly high) and if they go north of $80 Main Street is going to get hit and Wall Street will eventually feel it too.

——–

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) .

The BDI is @ 40% (I haven’t done the math) off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI nine day rally flattened out two days ago and has fallen 99 points. It shot up a significant +91 points yesterday and closed at 2688 =  Bullish for stocks & world trade right now

——-

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

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

Stocks went up so guess what happened to the dollar – The dollar reached a new yearly low two days and steadied yesterday at +0.04 % The dollar closed at $75.50. We have developed a support level just below $76 . The dollar closed below its support level. = Bullish for stocks

NB -

• Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.
• A slow decline in the dollar = good a rapid decline = bad .
  

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

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

I will try to revise this section to make it clearer – Open to any private suggestions – just went over it today.

Recommendations-

• Buy GLD on dips.
• Our other positions have gone way up and are NOT worth chasing at this time .
  
• If you are a stock picker or short term trader do not chase hot stocks – wait for a dip. Everything seems overbought. Financials on dips still decent plays. Looks like dip is coming.
• Traders – Bought small position in CSCO a few days ago
• Traders – NVS (Novartis) 11+% profit so far. Usually would take profits now or at least sell 1/2, but going to wait till swine flu hits.
• Having reached a higher high on major indexes, you start to think more about how much to hold and how much to sell.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Dow 10,000

Yesterday the Dow closed over 10,000.  Some major facts that cheerleading American corporate media has ignored about Dow 10,000

• The Dow was at 10,000 ten years ago. Buy and holding stocks over the last 10 years has really LOST money. A whole lot more than you think
  
• If you adjust for inflation the Dow is really at 7,537 – you lost 25% of your purchasing power. Thanks to one of you who sent in this LINK
• If you compare the Dow to Gold (in some ways this is like showing how far the dollar has fallen in value relative to other countries) “It cost about 30 ounces to buy the 10,000 Dow last time. Now it costs less than 10.” The  loss in purchasing power becomes even bigger.

Therefore, relative to the rest of the world and inflation major US companies/the Dow has taken a huge fall over the last 10 years.

Relative to this years Dow low 6470, Dow 10,000 sounds mighty good .  Financials have lead this Dow/Stock Market recovery from 6470 to 10,000.

• JPM * (see below) just announced multi billions of dollars in better than expected profits. So will other shadow banks
• These financials are giving big rewards to top executives who still look for ways to make bets on money (Credit Default Swaps etc) and are building up hoards of cash in order to have collateral on these hidden bets.
• Obama and his Wall Street administration have even made it less transparency for shadow institutions – mantra, we now have NO mark to market accounting.
• The banks are not making loans to small businesses like they’re supposed to and the gov’t instead is making those loans/gifts – cash for clunkers, tax cuts, $8,000 first time homeowner gift etc.
• These big shadow institutions are here to stay. LINK according to Obama’s administration “the genie is out of the bottle.” Looks like these huge unregulated institutions are here to stay.

Therefore shadow banks, the creators of “financial weapons of mass destruction” (Warren Buffett quote) rule. Obviously those who robbed you and brought the world to its financial knees are being rewarded. Investors411 has screamed about the injustice and future doom of continuing the  hidden financial system, but it has contributed significantly to the Dow reaching 10,000.  Like greedy little pigs we are again building a financial system on illusion.

Investors411 recommends the following  (see overview for more)

• Traders – Play the financial stocks (shadow banks). They rule. Ride the wave. Dow 10,000 means lots of wealth has been again created for upper middle to ultra wealthy. Some of this will get spent and help the American economy and the blackmail shadow banks have is if they go under so does the stock market . Never forget we are only building another hidden asset bubble
• Long Term Investors – Do what everyone else is realizing buy Gold GLD (see past Investors411)
• Long Term Investors – Buy countries that create wealth by manufacturing real goods or producing real commodities – China & Brazil

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

“Expect other indexes to follow Gold & Brazil. ” (Both GLD and EWZ have broken out to new highs.)

Put on your Rally caps and watch volume – Today should be the day that we know if the money on the sidelines is willing to start to get back into stocks.

Volume showed a wee bit of new money did come into the market, but let’s see if it gets sustained. CNBC and everyone who has money invested in Wall Street is cheerleading for that money to return (see above editorial)

So we’ve had at least a one day rally, but more importantly we’ve fundamentally had top line (sales) growth from Intel and some minor companies.

* JPM , Perhaps the #2 shadow financial institution also hit an earnings home run. Remember, instead of TARP money going toward the elimination of bad debt (credit default swaps) all the Bush and Obama administration have done is shovel money at them and allow them less transparent accounting. Most likely shadow banks/financials are hoarding funds because their real debt from the financial crisis is still huge.

Google & IBM are the next major tech to report after markets close today.

——–

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) .

The BDI is @ 40% (I haven’t done the math) off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI nine day rally flattened out two days ago and has fallen 99 points. It fell a -49 points yesterday and closed at 2579 . Even though a reversal seems eminent, we have technically achieved a higher high even though the BDI is falling.  Another 100+ point drop well start to get a little concerned and the line in the sand support level is 2163 =  Bullish for stocks & world trade right now

——-

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

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

Stocks went up so guess what happened to the dollar – The dollar reached a new yearly low fell a significant -0.46 % The dollar closed at $75.47. We have developed a support level just below $76 . The dollar closed below its support level. = Bullish for stocks

NB –

• Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.
• A slow decline in the dollar = good a rapid decline = bad .
  

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

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

See comments section of blog for a complete update on positions.

EWZ – Brazil up +4.05 % yesterday is starting to go parabolic.  It’s going up way too fast as investors are chasing the stock.

GLD – Remains a solid buy the dip opportunity (even small dips)

XLF, UYG & FAS (big financials/shadow banks) are also buy the dip opportunities . UYG is riskier and FAS is most risky. Traders could see a buy the dip opportunity today.

Sold FAS yesterday for +8% profit

Your (Monitor’s) Questions – See comment section of blog

INTC did fizzle yesterday – up only +1.66% vs our positions in China (up +3.55% ) and Brazil (4.05%) Technically, Intel had gone up almost 40% last quarter and a whole lot right before earnings – so the higher price was already built into the stock. China & Brazil have not had the same huge run up, although Brazil is reaching the same overbought position that INTC.

For US and other countries to move forward we’ll have to see other companies show top line sales growth.

Outlook is still CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Class Warfare – Editorial

The most important stat this week (see yesterday) was from Bill Mahr reminding us 1% of the USA had 8% of the wealth in 1980 when Reagan took office. Now that 1% has 23% of the wealth

There is class war fare raging out there as the rich and the uber rich have through excess GREED dramatically altered America’s financial & economic structure. They are toasting the middle and lower classes.  In other countries like China and Brazil wealth is growing among the middle and lower classes. Unless we can fight back and change this dynamic America will continue to fall.

One of the major trends in history is when the majority realize just how badly they’re getting screwed by an oligarchy and they fight back. Sometimes like in the heath care debate after all the shouting tea baggers people start to realize just how expensive health care has become and the wonder why other people abroad are living longer from infants to seniors. Why does  it cost so much less for a better quality of life/health in similar countries abroad?

Bottom Line – Capitalism is the best economic system we have on the planet right now, but it need regulation and if left to itself = people are people and GREED runs wild if we don’t enforce regulations.

Your Comments

Popeye joined D .& Sherwehe on trillions going to fight wars instead to other causes? Check out the comments and join the debate.

Several of you have privately mentioned that I’m too tough on Obama. Sorry I think he deserves it. Others want me to focus more on health care – will do.

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

Fearless forecast on earning season  from yesterday -“Expect other indexes to follow gold & Brazil. ” (Both gold and Brazil have broken out to new highs.)

Intel again hit a top and bottom line home run in their earnings report and forecast. Shadow financial - JP Morgan this AM seems to have also done better than expected. INTC up 5%+ in post market trading and JPM up 3%+ in pre market trading. Revenue for these companies is coming in better than expected. Its a regulatory and interest rate utopia for shadow banks/financials right now.

Perhaps even a bigger positive was the fact that tech giant Cisco bought a major telecom nuts and bolt company and actually went up. Almost always companies go down when they make multi billion dollar purchases. See Cisco buys Starent LINK A huge chunk of what happening is all those phones being sold in growing China market (and elsewhere) that seem to do everything including cleaning the kitchen sink.

CSCO fundamentally seems like a decent buy for those interested in stocks

Sure looks like he rally will get extended. Watch volume. Resistance levels Dow 10,000 could fall today and other major will probably see new yearly highs.

Put on your Rally caps and watch volume – Today should be the day that we know if the money on the sidelines is willing to start to get back into stocks.

——–

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) .

The BDI is @ 40% (I haven’t done the math) off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI nine day rally flattened out yesterday. It fell a -50 points yesterday and closed at 2646 . Even though a reversal seems eminent, we have technically achieved a higher high =  Bullish for stocks & world trade

——-

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

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

The dollar reached a new yearly low (barely) last week and fell -0.45 % The dollar closed at 75.82. We have developed a support level just below $76 . The dollar closed below its support level. = Bullish for stocks

NB – Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.

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

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

Our positions in gold GLD and Brazil EWZ are clearly out preforming US markets and our China/smaller S. Korea position. The later two are approaching new highs. Would buy more of GLD & EWZ on dips. On a purely fundamental basis financials should lead any rally and are therefore a decent short term trade

Added XLF (financials) yesterday (10%) of portfolio at 15.15. For traders I’ve also been playing FAS (3x financials) Bought the dip yesterday at 84.00 with a tight stop. Bought small position in MVIS (mentioned many times over last few weeks – recommendation sent in by one of you) – I missed the dip when away, so bought in advance of expected good earning reports.

Big banks and techs continue to be recommended areas. QID is an interesting play (2X NASDQ 100)

When/if the SPX or S&P 500 hits/gets close to resistance area of  1200 – would take some off the table. Long term ETF’s for China, Gold, & Brazil continue to be the best bet to buy on dips.

Right now GLD is the best position to buy on slight dips. – The G7 nations bill themselves as the world’s most powerful economies, but in the end the vast majority are turning out to be the biggest debtor nations – especially the USA. This growing debt is driving Gold fundamentally and technically it has broken out from a two year long resistance level.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Bill Mahr

Last week he had Tom Friedman and this week he had Lincoln Chafee (former moderate Republican Senator) on his HBO show real time with Bill Mahr.  He’s sometimes over the top, always funny, and gives a non regurgitated version of current events.

His most important stat this week was 1% of the USA had 8% of the wealth in 1980 when Reagan took office. Now that 1% has 23% of the wealth .

Right now up on his web site is “How Sarah (Silverman) saves the world – Provocative and funny LINK

Obama’s Closet

Sitting on the desk in the Main Room is going to be that big shiny Nobel Peace Prize, but what happens when we open the closet door.

• 13,000 more troops for Afghanistan (Obama’s “Necessary” war) LINK to WaPo story.  Obama’s words are sweet 7 he will have his Peace Prize.. But his action are totally different – now the USA has in Afghanistan and Iran “more troops than the peak during the Iraq “surge” that President George W. Bush ordered.”
• Paulson (Bush’s Sec. of Treas.) instead of using TARP funds to absorb bad debt (CDS’s) gave the money to shadow institutions. Obama continued the practice and even allowed them to change their accounting practices so that they would not have to show bad debt. (eliminated mark to market accounting) You can call this good, bad or ugly. But the reality is, just like Bush he is privatizing profits and socializing risk.
• How the hell are you going to reform anything (health care, medicare etc.) when all the money continues to go to shadow institutions and war.

Your Comments

Both D .& Sherwehe have opened a debate that enlightened anyone who has not fallen hook line and sinker for the fear mongering militarists who run the USA. What if the “$3 trillion ” going to fight wars went instead to other causes? Check out the comments and join the debate.

4 Factors Moving Stocks/Wall Street

Editorial below under Technical and Fundamentals. Unfortunately, these factors may move socks higher, but what’s good for Wall Street will not always help Main Street USA.

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

Basically the US markets have been up 5 days in and overbought markets hesitated yesterday.  The Dow has eked out a new yearly high, but the other major indexes still have a point or two to break out to new highs. Four major factors stand in the way of a breakout (Actually there are lots of factors or potential factors, but three keys.)

1. The Dollar – Discussed below
2. The BDI – Again below
3. Technicals – You have an overbought market that has risen in decreasing volume in front of major resistance level. = Bearish . However you do have one major US stock index and several foreign stock indexes (Brazil, Australia & some others) that have broken out to new highs. Also commodities like gold have had solid breakouts. = Bullish
4. Earnings Season – Three major tech companies report this week – INTC, GOOG, & IBM . Everyone is looking for top line growth -sales. Last earnings season it was Intel’s  (reports tonight) expectations of a bit better top line that juiced markets. Three major shadow banks JPM (today),GS (tomorrow) report & BAC (Friday) .

Bottom Line – The shadow banks will continue to do well. Bush, Obama, and Bernanke (The Fed & our government) have privatized the profits and socialized the risk. The oligarchy, just like in a communist country soaks up the wealth. As long as they are NOT forced to use mark to market accounting and have the

The big tech companies should benefit from the falling dollar. They have cut jobs in the USA and will first hire people where labor is cheapest and closest to growing markets that do not have huge debt – China & other emerging markets. The question is has top line growth abroad (China’s stimulus package & other emerging markets) been strong enough. China, Brazil, India S, Korea (the 4 majors) combined are growing but their combined GDP’s are total 1/2 of the USA’s.

This will radically change in the next decade as they continue to out preform the USA. The US is burdened with massive debt, phony wealth created by shadow banks and huge war costs.

Best read of tea leaves – Shadow banks will do well. Less sure about Big tech, but there will be no huge earnings miss. Therefore, expect other indexes to follow gold & Brazil.

——–

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) .

The BDI is @ 40% (I haven’t done the math) off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI nine day rally flattened out yesterday. It rose a +1 points yesterday and closed at 2696 . Even thougha reversal seems eminent, we have technically achieved a higher high =  Bullish for stocks & world trade

——-

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

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

The dollar reached a new yearly low (barely) last week and fell -0.35 % The dollar closed at 76.16. We have developed a support level just below $76.

NB – Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.

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

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

Our positions in gold GLD and Brazil EWZ are clearly out preforming US markets and our China/smaller S. Korea position. The later two are approaching new highs. Would buy more of GLD & EWZ on dips. On a purely funadamental basis financials should lead any rally and are therefore a decent short term trade

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

The Mighty Casey Strikes Out

The beloved Boston Red Sox were eliminated from the playoffs . I’m going into a cocoon till spring training.

“Deja Vu all over Again”

Yogi Berra’s famous phrase is applicable to our financial situation.

It’s been just over a year since the shadow banks brought the world to its knees and we almost fell over the brink. We had the socialist or communist bailout – you the taxpayers. Nothing has been done to really fix the problems that existed. The dominance of the financial sector continues over politicians and the media continues. Our growth is being measured just like it was before.

This screams for any investor to keep a watchful eye on your investments. If we keep allowing GREED and self interest to run financials the next meltdown is going to be bigger than the last.

Afghanistan

Our #1 & #2 priorities should be Pakistan and Iran . If anything terrorist taking over part of what is equivalent to the Pentagon in Pakistan is very significant. LINK In Newsweek magazine Joe Biden comments that we spend 1/30 the money on Afghanistan than we do nuclear armed Pakistan. No matter how much of a war monger or peace nick you are simply recognizing the greater threat is critical. In fact it looks like any meaningful change has been at best marginalized.

Nobel Prize

Kudos to Obama on winning the Nobel Peace Prize. It sure helped that he wasn’t Bush. Will we continue to spend trillions on wars? Perhaps the Nobel committee is trying to nudge Obama to more peaceful of negotiated methods of solving problems.

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

Basically the US markets have been up 5 days in a row and are close to reaching new yearly highs. Volume dropped Friday, so technically  its hard to see a breakout behind such weak volume figures.

Fundamentally, earnings season begins this week and next week they flood in.

The dollar is still the key to worldwide recovery.

For Jim Cramer fans here’s a critic for investment advisers Nick Kapur of  Motley Fool . LINK You should always take entertainers and the politically and self interest  driven comments coming out of CNBC with a grain block of salt with a grain of salt. Like everyone Cramer has his share of horrendous calls (“be out of the markets for the next 5 years”) and good calls. Remember their advertisers make $ every time you “buy buy buy” and “sell sell sell.”

The BDI has turned positive. = Bullish for stocks

Fearless forecast for week – The dollar has ruled. Basically the lower dollar has given US companies a chance for better profits. So last earnings quarter and future forecasts (providing dollar keeps falling & it looks like it will) should be better than expected. Technically we are approaching new highs is WEAK volume . Technicals, are telling us the resistance levels (old highs) will hold.

Markets rose even though the dollar was up significantly Friday (see below) . This is bullish The lack of Volume is giving us a Bearish signal . The BDI has turned Bullish -

Bottom Line – Mixed signals with a bullish tint. How markets react to news looks like it will drive stocks this week. So far reactions to Alcoa and other early earnings reports has been good.

——–

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) .

The BDI is @ 46% off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI nine day rally continued. It rose a +46 points yesterday and closed at 2695 .   We seem to have started to reversed the longer term June move.  Resistance level of 2491 (last months high) first major hurdle to cross – We’ve broken out over these levels and technically created a higher high. -  Bullish for stocks .

——-

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

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

The dollar reached a new yearly low (barely) last week and rebounded big time Friday +0.60% The dollar closed at 76.43. We have developed a support level just below $76.

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

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

Our positions in gold GLD and Brazil EWZ are clearly out preforming US markets and our China position. The later two are approaching new highs. Would buy more of GLD & EWZ on dips.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Off on another trip, back Monda y

Stocks

Alcoa (comodities) had a good earnings report last night – All our major investments should do well.

Editorial

From Dylan Ratigan – He is a former host who quit the financial news channel CNBC and now has his own AM show on MSNBC.  His Editorial entitled "Corporate Communism" is well worth the read – Link

His point is the almost total lack of competition (capitalism) is both the health care and banking systems in the US.  To him these are really communist systems because they lack competition and we should call them by their correct name - communist banking and heath care systems .

We should all stand for rules based capitalism and not a system that promotes a privileged "communist" system

Afghanistan

Huffington Post has a huge Afghanistan section. No other news outlet even comes close. LINK

Steve Clemons has one of the best websites on issues facing America. He is both realistic and a relative moderate. He features a big Af/Pak Debate by some foreign policy experts LINK Title of debate “AMERICA CANNOT AND WILL NOT SUCCEED IN AFGHANISTAN/PAKISTAN.”

Today’s WashingtonNote.com , Clemons blog focus is Iran – “Imposing More Sanctions On Iran Will Not Work” Both these articles give some in depth analysis.

Bottom Line – Afghanistan, Pakistan and other countries – I don’t want these countries to become havens to those who will attack America, but in no way do I want to continue  spend $100s of billions to nation build democracies around the worlds.  Our results in Iraq are a Shia government that is corrupt, best buddies with Ahmadinejad, and still a nation deep in poverty despite having huge oil reserves. Furthermore, while we focused on Iraq, Afghanistan/Pakistan deteriorated.

Just like in the colonial empires of the 20th century (from England to Russia) you’ll find that nation building has brought former dominate powers down. This is just history repeating itself. In the middle a recession for Main Street these funds should go to help Americans not nation building abroad.

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

The Dollar is currently the #1 factor influencing stocks.  Yesterday’s significant move down created a major rally for stocks.  Earnings season which officially opens today (Alcoa reports) will be a fundamental driver of stocks, but the dollar will still be very important.  What investors are looking for is top line sales growth. Last quarter Inel Computer had some top line growth and that sparked a rally. INTC is obviously again a key factor.

Volume moved up, but only the NASDQ was above average. You might call this partial confirmation of the move higher.

Australia raised interest rates and this show signs of an improving worldwide economy. LINK The US is not going to raise rate for a while until the jobless situation turns.

Mortgage applications are at a 4 month high as rate falls is the headline on the major financial news channel LINK – Bullish news

Markets are overbought, and you should notice that huge amounts of $ are NOT entering the market

There are some strong technical resistance areas around the old S&P high of @ 1070, 1120 and 1200. (more later on this) These are areas I’d take some money off the table. Especially 1120 & 1200.  S&P or SPX is at 1055.

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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) .

The BDI is @ 46% off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI rose a significant +79 points yesterday and closed the day at 2441 .   Longer term (since the June high) the rate of decline has softened, but its still going in the wrong direction. We seem to have started to reversed the longer term June move. We’ve had a rally 8 of the last 9 days from a low of 2166 .  Resistance level of 2491 (last months high) first major hurdle to cross – Bullish for stocks .

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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.

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

The dollar fell -0.51% yesterday. Three down days in has brought the Dollar to $76.31 less than 0.50 of its yearly closing low of $76.00 (major support level)

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

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

See yesterday’s update for a full outline of current positions. Sold XLF for +7% gain. Over the course of this year Investors411 has sold XLF (financials) for 23% gain (10% of portfolio) and twice for 7% gains (both 5% of portfolio)

Both GLD and EWZ are trading at new highs. Like US markets right now these stocks (GLD might be termed a commodity – gold) are over bought. Looking for a buy the dip opportunity .

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Jobs,Jobs, Jobs

To paraphrase James Carvill’s famous line “Its all about the jobs stupid.”  (he used the word economy) Obama’s mistakes-

• Obama’s took on Larry Summers and the Wall Street crew who dominate his economic team.
• Underestimating just how huge the economic meltdown was.
• Realizing that because of globalization and superior growth in emerging markets major US companies are going to hire first abroad instead of here. (see past Investors411)

What can Obama do to solve this problem? The stimulus and tax cuts help, but two noted economic experts offer solutions.

• Robert Reich – LINK – 4 steps – Use funds to bail out average people through states, 1 year payroll tax holiday on first 20k, Job tax credit for small business, & directly loan to small business (bypass big banks)_
• Bob Kutner – LINK – Makes the case for increased deficit spending for job creation. Bob looks at the most recent poll that show 53% believe unemployment is the #1 concern of Americans vs 27% who fear the deficit.

Bottom Line – Deficits are bad even crippling. This year the deficit will be about 11% of GDP. In World War 2 deficits maxed out at 29% of GDP. If Democrats want to stop an  implosion in the next election they have to create more jobs NOW.

Unfortunately from Nobel Prize winners from Krugman to Stiglitz , Obama has ignored the progressive side of his party.

Your Comments

#1) Mama Jama brings ups Thursday’s Tom Friedman column again LINK – about how radical and anti Obama the right has become in America.  This is alien for lots of us who don’t even consider Obama a liberal, but are also worried about the fact that no one seems to be standing up against this divisive hatred.

One of the latest examples was members of the right carrying guns to a health care town hall meeting.  Can you imagine the outrage if blacks and Hispanics carried guns to a Sarah Palin speech.

#2) Don’t worry about a 700 point dip, unless someone bombs Iran . Both the Obama administration and the Fed are flooding the economy with money forcing the dollar down. This in turn makes American exports cheaper and imports less expensive. As long as this money flows Wall Street will do well. Add to this less transparency and no real regulations on shadow financial institutions.

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

Volume fell as markets rose. Therefore, our #1 confirmation factor is NOT giving us a bullish sign.

US markets reacted positively to news that the service sector (ISM number) was back above 50%.

Rumor of the AM is that group of countries (Gulf oil producers) have been meeting to replace dollar as standard currency according to CNBC – lead story. Denied by Saudi’s – Should push dollar lower and stocks higher this AM.

Earning season officially starts tomorrow with Alcoa (AA) reporting Wednesday.  Any company that is going to have top line growth (increased profits from sales instead of cost cuts) is what Wall St. is looking for.

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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) .

The BDI is @ 47% off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI rose only +5 points yesterday and closed the day at 2362 . After a sharp turn higher it looks like we are headed back down.  Longer term (since the June high) the rate of decline has softened, but its still going in the wrong direction.

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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.

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

The dollar fell -0.46% yesterday.

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

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

S&P 500, SPX , our #1 position (20% of portfolio) is down 4 to 5% from highs – This is really a holding position instead of cash.

China, FXI, our #2 position (18% of portfolio) is bit less than 10% down from highs. (very long term investors should see this dip as a buying opportunity) So far this looks like China just moved too high to fast.

Brazil, EWZ , our #3 position  (12% of portfolio) has broken out to a new high. Like a huge group of investors now looking to buy the dip – so look at 3% pullback as a dip.

Gold, GLD, our #4 position (10% of portfolio) is close to a new all time high.

Financials XLF – (5% of portfolio) Selling remainder today -reason,  weak volume behind two day rally

S Korea EWY – (5% of portfolio) Up about 7% and @ 4% from highs.

Traders

– Instead of ETF’s – Investors411 does have a position in NVS Novartis (10% of portfolio) a swine flue play. Up 7 to 8% – We will exit this when flu season hits.

One of you recommended MVIS  Microvision- Missed a great buy the dip opportunity because of business trip Thursday & Friday – Looking to buy next dip.

Sold our AAPL position for a +7% gain. Would buy another dip

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Sorry to have been away. Unfortunately this is going to be another week of short and limited updates.

Just Stocks

Technically we’ve had some big volume  reversal days where volume has gone up and stocks down. Volume has been above average on these down days for the US markets. Our #1 confirmation factor is = Bearish short term signal .

We’ve had two down days in big volume and 2 or 3 are enough for a full fledge reversal of trend.

Out #2 confirmation signal how markets react to news has also change. Previously markets moved up on bad news or that bad news dip was bought buy investors. Now markets are falling on bad news. = Bearish short term signal

The good technical news is, in concert, major US indexes have fallen to just above their 50 day moving average (see charts on side of blog) and this should offer some support.  That’s why technicians call the 50 day moving average a major support/resistance area.

The BDI has reversed itself and moved higher over the last few days. (2185 to 2357 in last 3 days) = Bullish short term signal especially for exporting countries,

The dollar had moved higher, especially on Thursday when stocks had their biggest losses.

Remember Investors411 has been beating the drums for a 5 to 10% pullback and we’ve passed the 5% mark. The whole world stock markets have gone up too far too fast.

A more complete update later this week.Here’s an editorial from Dr. Doom, who accurately predicted the original crisis, Nouriel Roubini, on unemployment staying above 10% for most of 2010. – LINK

Fearless Forecast- Stocks should steady at the 50 day moving average, but the bulls have clearly lost momentum. It would be very troubling to see markets sink further today and the 50 day moving averages to fall.

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

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AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Where Did We Go?

An excellent Tom Friedman editorial yesterday in NYT about the political deterioration of the far right. This is exactly what Investors411 has been talking about. No one is was willing to stand up to those  depicting Rabin in Israel as a member of the SS and he was assasinated by right wing wxtreemists. The same is happening here. Mainstream Republicans are either silent or encouraging radicalism. LINK to "Where Did We Go?" by TF

Its heartening to see someone of Tom’s stature take this on. Investors411 has been beating the drums about this for many moons,

Sunlight Foundation

The Sunlight Foundation exposes the links/corruption in politics. This LINK shows the $10,000,000 the Senators got who voted against the public option on Committee. I believe it was $674,000 each.

That’s all folks – Off on Business trip

Barr