Investors 411 Blog

Putting Money Where You Mouth Is

Charging Bull- Bowling Green NY

Investors in everything from Wall Street to the Dollar (a much bigger market) put their money down because they believe that at some future time they will profit from their investment. These are primarily the world richest people and money managers investing in the future.  Of course, it also includes a lot of upper and mid level middle class people who the money managers (mutual, hedge, 401k university, institutional etc) invest for.

Lets say there are two groups – one willing to invest in riskier assets and the second group (perhaps burned too many times) who seek safe havens – Put  money under the mattress, low yield CD’s, government bonds.

Government bonds are popular . Right now across the world and in the USA almost every time our government sells debt (usually in 2, 5 10 year  and longer term treasury bonds) there is an over abundance of buyers in this safe haven This is great for the USA . Not only does low rates mean the gov’t borrows at low rates, but it is an investment in America’s financial future.

The dollar is rising . The short & mid term trend for the dollar is higher (see explanation below). For the sake of this editorial (putting money where your mouth is) a strong or rising dollar says investors from around the world have confidence in the direction the USA is heading .

Wall Street rising . The fact that equities have now basically moved up over the last 8/9 months is a positive signal for the economic direction of US companies. Wall Street historically looks 6+ months into the future. (This does vary radically from day traders to decades long stock holders.) Wall Street is saying confidence is rising in the USA.

Bottom Line – There are a whole lot of connected and wealthier people around the world who are optimistic on the future of the USA. This does not mean there are not problems. You can also argue over who is responsible for this rising confidence from Obama to emerging markets. But the bottom line is people are putting money down and expect better economic results in the future of the USA.

You can argue that there is not a lot of volume behind the stock move higher is a bad sign. However when you see people flocking to buy our treasury bonds, the dollar rising, and stocks still near yearly highs – Investor’s mouths may be saying one thing, but they are investing in our future. That’s a good thing

Afghanistan and $

The Huffungton Post & TMP  this AM is headlining a story (Surge 2) that there will be 56,000 private contractors in Afghanistan to rebuild there economy. Sorry I’d rather see those 56,00 rebuild our economy. LINK

Bernanke, Time Magazine’s Man of the Year

KISS & STOCKS

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500

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

Technicals, Fundamentals & Analysis

Fed Chair – Ben Bernanke is Time Magazine’s Person of the Year (more later)

The Fed meets this week and makes an announcement tomorrow. Any change in outlook (unlikely) will impact markets. Trading usually light before Fed meeting. No change in the Fed statement about interest rates would be bullish.

Dollar went up so stocks went down yesterday. This inverse correlation has weakened recently. However stocks couldn’t rally in the face of a major move higher in the dollar. (See below)

Again were seeing down days with increased volume. Historically a bearish sign .

FEARLESS WEEKLY FORECAST – Up to flat week . But be careful we are entering overbought territory (see below) and if rally continues I’ll be taking profits rather than adding to stocks.

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

——–

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  fell (was flat) -12 points yesterday and closed at 3518. It’s interesting how smooth and seemingly predictable the BDI is in the short term. The rate of the decline is declining and with about 80+% certainty you can predict a flat to up day today.   Since Mid November highs the BDI (see chart) has established a clear downward trend = bearish signal

What it means long term – Since the low of Oct 2008 technically the long term chart is = Bullish. However we are now in a month+ long correction. Mid term trend = Bearish The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets.

——-

The Dollar is currently the #1 forecasting tool (now weakening as a predictor)

$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 US dollar was rose a significant yesterday +0.76% . Anything close to or over +/- 0.50 is significant The dollar closed at $76.93 . Technically have broken up through the 50 day moving average resistance level and now broken out through another significant resistance level the Oct/Nov highat 76.82 = Bullish for dollar & bearish for stocks

The mid term trend is now bullish and the long term trend (looking at weekly or monthly charts of price) is bearish

——-

$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

There’s been a dramatic change in the last 4 trading sessions. We broke out of the range (see below) and are close to  overbought/sell positions . The index closed at +21.20 This is a slightly Overbought Position

From past updates – It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 for a month+ =  There has been no clear buy or sell signal for over a month.

Oversold conditions (@-60) = buy, Overbought positions (@+60) = sell The closer we get to +/- 60 the better our chances of making money with a shorter term buy/sell signal

Bottom Line – Start thinking about taking profits, especially into any continued rally.

Positions

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

(again a little behind on latest moves)

Will wait to buy some ETF’s and stocks when McClellan Index/Oscillator approaches overbought (@+60)

Recommended ETF’s and Trades

SELLING & BUYING

Your Comments - (See “Monitor’s” comments on side of blog – About a week  ago Investors411 sold its positions in GLD. DGP, AMZN & NVS ) – Not interested in opening any new positions right now Waiting for a clear signal from MCellan Index to commit additional capital or sell existing positions .

If we rally into the end of this week I’d take some more profits

Near bailing out on small investment in BAC

Long Term Outlook = CAUTIOUSLY BULLISH

The Scream

“The Scream” – by Edvard Munch

Understandably, many of you are frustrated with the direction our country is heading in . You’ve watched again as another economic bubble of unregulated capitalism burst. Last year – two bubbles – housing & finance. The collapse of Lehmann Brothers and the financial meltdown showed the world we needed some rules to govern unregulated markets.

It’s obvious that relative to the world and especially Asia (China) that the US star is falling and theirs is rising. You thought finally your fellow American’s would get it.

The health care/public option failure is especially frustrating because some good ideas came close to passing. (See Bob’s comments onside of blog – Why was there no mass organized demonstrations for a public health care plan? and earlier comments) You realize that a 5 to 10% increase in health care each year is going accelerate the already growing gap between the rich and poor in the USA.

Is Bob right? – Perhaps in America the class struggle between the rich and those that have less is over.  The rich (symbolically – shadow bankers) have won a round or two this year. It can get depressing and make you want to scream.

Certainly in China it is hopeful that you see one generation move from slave labor in rice paddies to becoming a computer programmer.  But, admittedly here the flow seems in the opposite direction.

Sometimes you win and sometimes you loose. The bottom line is three other old adages “what doesn’t kill you makes you stronger.” You learn your lesson, adapt and move ahead.  The second adage is “it could be worse “ Yea it could have been a lot worse -  think President Palin. Lastly “think globally and act locally” The key word here is to act on what you believe in. Sometimes that seed you plant takes time to grow

So  scream or don’t, but keep fighting for what you believe in &

Happy Hanukah

Post script – I’m sure Bob will keep on trucking.

KISS & STOCKS

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500

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

Technicals, Fundamentals & Analysis

Running out of Oxygen – US & most world markets have been moving higher in weak, below average volume .  We’ve move up again over the last 4 days and inched out new closing highs for major US markets (all but the Russell 2000 index).

We are in moderately overbought territory (see below). Translation – we are staring to run out of buyers.

The inverse relationship between the dollar and stocks has broken down somewhat over the last two weeks. But its still there.

FEARLESS WEEKLY FORECAST – Up to flat week . But be careful we are entering overbought territory (see below) and if rally continues I’ll be taking profits rather than adding to stocks.

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

——–

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 a fell a  -49 points Friday and closed at 3530. Over the last week the BDI dropped rapidly and the decline eased on Friday.  Since Mid November highs the BDI (see chart) has established a clear downward trend =   bearish signal

What it means-Since the low of Oct 2008 technically the long term chart is = Bullish. However we are now in a month long correction. Mid term trend = Bearish The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets.

——-

The Dollar is currently the #1 forecasting tool (now weakening)

$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 US dollar was fell yesterday -0.23% . Anything close to or over +/- 0.50 is significant  The dollar closed at $76.35 . Technically have broken up through the 50 day moving average resistance level and then failed to break out through the Oct/Nov high around $76,82 resistance level.  In technical terms we have created a “double top.”  The $76.82 level is now a very important line in the sand.

The whole dynamic  here seems to have changed – We now, at least for the short term, have a rising dollar

——-

$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

There’s been a dramatic change in the last 4 trading sessions. We broke out of the range (see below) and are close to  overbought/sell positions . The index closed at +40.17 This is an  Overbought Position and we are getting close to a +60 dramatically overbought  or sell signal.

From past updates – It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 .  There has been no clear buy or sell signal for over a month.

Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell The closer we get to +/- 60 the better our chances of making money with a shorter term buy/sell signal

Bottom Line – Time to start thinking about taking profits, especially into any continued rally.

Positions

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

(again a little behind on latest moves)

We’ve had, and volume has confirmed, a quantum shift in markets. This may be temporary and it may be long term, but it necessitates major changes in positions. – looking for dollar to hold or add to gains . – This happened or was confirmed yesterday . Will wait to buy some ETF’s and stocks when McClellan Index says we are approaching overbought (@+60)

Recommended ETF’s and Trades

SELLING & BUYING

Your Comments - (See “Monitor’s” comments on side of blog – About a week  ago Investors411 sold its positions in GLD. DGP, AMZN & NVS ) – Not interested in opening any new positions right now Waiting for a clear signal from MCellan Index to commit additional capital or sell existing positions.

Right now, it sure looks like we are reaching overbought positions.  If we rally into the end of this week I’d take some more profits

Start small & Build your position – Buy the dip.

Long Term Outlook = CAUTIOUSLY BULLISH

Illustration by Victor Juhasz

Note – No Updates for rest of week

Health Care

Democrats are touting unanimity on a health care proposal that will cover more people. LINK

A step in the right direction. However, this is a huge disappointment for those of us who see every other industrialized democracy have some sort of public health care option. The voters of these (a couple dozen)  countries have voted to KEEP this option because like public education it works .

Something is better than nothing, but this is a clear victory for capitalist greed (the kind that creates economic bubbles – in this case rising health care costs and not covering 50 million of our fellow American men women and children over what’s best for the common good.  Another win for Greed is good unregulated capitalism

Education – Yikes

"A report by the American Association of State Colleges and Universities indicates that the US is one of only two nations on Earth in which people aged 25 to 34 have lower educational attainment than their parents. " LINK Again, over decades we have cut funding for education relative to things like executive or CEO pay. Another win for Greed is good unregulated capitalism.

The Ugly Economic News

(continued from Good, Bad & …)

It simple – We have failed to fix the problem that created a meltdown or build further bubbles .

In underfunded education, not fixing Health Care, & and failure to fix our financial system – unregulated capitalist greed growing.  The overextended, nation building empire’s decline is accelerating.  Other countries have growing middle classes and ours is shrinking into a society of haves and have nots.

Tom Friedman & other more responsible capitalists have joined those of us who have been beating the drums of our crumbling structure and ways to fix it. But right now we are Married to the Mob of capitalist who simply put GREED first.

The Great American Bubble Machine – by perhaps the best economics reporter out there Matt Taibbi – LINK

Bottom Line in Investments – The reason Investors411 has a five year winning record in investments is in choosing countries and sectors that  are building their middle classes and by paying careful attention to the destructive (bubble building) aspect of US  unregulated capitalism/greed.

KISS & STOCKS

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500

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

Technicals, Fundamentals & Analysis

The dollar rose a significantly Tuesday and stocks fell (see $USD below). Tuesday -  The fact that the dollar went no where and stocks went nowhere means the dollar’s inverse relationship to US stocks is back on. The dollar is still the #1 forecasting tool.

Volume – Our former #1 forecasting toll was up and at or above average. Rising, above average volume is a bad sign for bulls when the price move is above 1.00% . Yesterday was boarder line – but short term volume indicates momentum is probably with the Bears

The McClellan Index - is also a very significant tool in when to (more) safely buy and sell. Right now there is no clear signal either way, (see below)

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

——–

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 a fell a significant  -134 points yesterday and closed at 3902. Technically  the BDI broke out through its major resistance level 4291 (this year’s high) over a week ago.  The BDI has rallied about 1700 points since late September.  Multi day moves in one direction are common. We are within 100 points of a support level. Breaking that level would be a short term bearish signal

What it means – Long term we created a higher high on the chart = Bullish. The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets.

——-

The Dollar is currently the #1 forecasting tool .

$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 US dollar was rose yesterday +0.58% . Anything close to or over +/- 0.50 is significant  The dollar closed at $76.22 . We have broken up through the 50 day moving average resistance level and the Oct/Nov high around $76,82 is the next important resistance level.

The whole dynamic  here seems to have changed – We now, at least for the short term, have a rising dollar

——-

$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at -2.01 This is a Neutral Position . This chart is showing we seemed to have reached a plateau. It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 .  There has been no clear buy or sell signal for over a month.  Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell

The closer we get to +/- 60 the better our chances of making money with a shorter term buy/sell signal

Bottom Line – There is no clear buy or sell signal. So its best to just stay put for a while.

Positions

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

(again a little behind on latest moves)

We’ve had, and volume has confirmed, a quantum shift in markets. This may be temporary and it may be long term, but it necessitates major changes in positions. – looking for dollar to hold or add to gains . – This happened or was confirmed yesterday . Will wait to buy some ETF’s and stocks when McClellan Index says we are approaching overbought (@+60)

Recommended ETF’s and Trades

SELLING & BUYING

Waiting for a clear signal from MCellan Index to commit additional capital or sell existing positions. Have FXI (20% of portfolio), EWZ, (16%) MOO (10%) and for traders a very small position in BAC (1 to 2%)

Start small & Build your position – Buy the dip.

Long Term Outlook = CAUTIOUSLY BULLISH

The Bad News

Obama to give major Jobs speech today.

Continuing from yesterday – So there is a lot of good economic news out there . We moved back from a financial meltdown cliff and and the improvement in the last jobs report is sunshine breaking through the clouds.  Obama does deserve some credit, but so do other factors like globalization – The emerging markets, like China are leading this recovery and pulling us along.

There are four major factors that are holding us back .

The HUGE hole – As stated many times since the fall of 2008 – this" financial crisis is far far far bigger" than most people though. We had both a housing & financial bubble’s burst. Many, but not all foreign countries bought into the American concept of "unregulated free markets." The phrase sound good, but countries from the Ukraine to Iceland have been crushed by adopting the American view of unregulated capitalism. This is a deep global hole.

The Consumer – Common sense has made the American consumer save more. This is justifiable. However the American consumer makes up over 70% of GDP growth. If she/he is saving they are not spending & money is not flowing.

Hoarding Banks – To paraphrase a nursery rhyme "All the president’s horses and all the president’s men can’t get banks to start loaning again." Shadow banks are hoarding money, because their balance sheets are so bad – they were caught holding on to too many unsecured assets (credit default swaps) Like consumers, a little hoarding is relatively good when compared too cascading debt.

There are, in partial defense of banks, a lot of potentially unworthy people to loan to. But, unless banks make the loans – money does not flow and the economy does not grow.

Debt – The USA entered this crisis already with a HUGE federal and trade deficit. Wars and nation building (Afghanistan) abroad significantly add to this deficit. We, like all other G20 countries, have used some form of government stimulation to help the economy recover. Our problem is the big debt hole we were already in .

Another big debt, not often mentioned is the debt each state has. As jobs and foreclosures grew & people save more  state revenue consequently fell. What’s happened in CA, MI & some other states will spread. Obama’s stimulus is back end loaded. Only @ 30% has been spent – so some of the remaining 70% will help will help troubled states. The question is – is the remainder of the stimulus and any new jobs program enough to tide us over until the jobs/financial and picture brightens?

The one argument that is impossible to stomach is the right wing mantra that big government can’t solve problems and/or is bad. Obama was handed an economic world that was on fire and he’s created some fire engines and used water (money) to put out the fire  You can disagree with with the methods, but a world left up unregulated capitalist greed is doomed. Without government/Fed intervention (the fire engines and water) we simply would NOT have put out the fire.

Tomorrow – the Ugly.

KISS & STOCKS

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500

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

Technicals, Fundamentals & Analysis

The dollar held onto its enormous Friday gains. It looks like it is at an inflection point.  The fact that the dollar went no where and stocks went nowhere means the dollar’s inverse relationship to US stocks is back on.  The dollar is still the #1 forecasting tool.

Fearless Forecast-. From Monday – This week we should be all over the place, but some solid economic fundamentals are coming into the light. This should help stocks in the long run. Once the dollar calms down (expect it to rise and gold to fall) we should improve. Flat to up week .

Now going to get a bit more technical

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

——–

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 a fell -71 points yesterday and closed at 4036. Technically  the BDI broke out through its major resistance level 4291 (this year’s high) over a week ago.  The BDI has rallied about 1800 points since late September. After 16 up days in a row, 9 down days in a row & now up 3 days in a row. Multi day moves in one direction are common and the decline in rate of change usually signals a reversal.

What it means – Long term we created a higher high on the chart = Bullish. The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets. After, what looks like a technical correction we are agin moving higher.

——-

The Dollar is currently the #1 forecasting tool .

$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 US dollar was flat -0 Friday . Anything close to or over +/- 0.50 is significant  The dollar closed at $75.77 .

The dollar’s rise did temper the rally, but the whole dynamic or fundamentals have changed. See Positions below.

——-

$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at +22.38 This is a Slightly Overbought Position . This chart is showing we seemed to have reached a plateau. It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 .  There has been no clear buy or sell signal for over a month.  Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell

The closer we get to +/- 60 the better our chances of making money with a shorter term buy/sell signal

Positions

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

(again a little behind on latest moves)

We’ve had, and volume has confirmed, a quantum shift in markets. This may be temporary and it may be long term, but it necessitates major changes in positions.

Today is a confirmation day for Friday’s move.  More than anything else – looking for dollar to hold or add to gains .  Will buy some ETF’s and stocks until McClellan says we are overbought (@+60)

Recommended ETF’s and Trades

SELLING

GLD – Sold all GLD for major profit.  (will compute this later)  Gold is still something to hold for the long term and its fundamentals are still credible. Will buy back in on dips.

Gold will rise again, but for now there is just too much downside momentum. Will be back with larger position in GLD & GDP on a dip

NVS -Sold for 21+%

AMZN – Sold for 16+ % profit. This looks like a mistake. Fed Ex had a surprise upgrade in earning. Most of their good news was from abroad, but they ship and AMZN products are shipped.

BUYING

FXI – Adding more to this positions. If Main Street is recovering faster than expected, so will China. Their currency & exports is tied to the dollar. So in one major sense, their recovery is tied, in part, to the USA. They have under performed major USA indexes recently.

IWM or UWM (an ultra fund that does basically 2x IWM) These ETF’s both track small cap stocks (Russell 2000) IF , Main Street is recovering faster than expected they should outperform the other indexes. They have under performed so far and should, like China, make up some lost ground relative to other major US indexes. Waiting for more of  a dip.

BAC - Bank of America. They’re paying back TARP shows solid fundamental strength. (I know they are a shadow bank bad guys) Bought  a small amount of BAC Friday.

Start small & Build your position – Buy the dip.

Again any stock investment or ETF that doubles or triples what a normal ETF does is a short term play for traders and short term investors – NOT long term Investors .

Long Term Outlook = CAUTIOUSLY BULLISH

Shock & Awe for Bears

The unemployment report Friday both shocked and awed Wall Street Bears and almost all economists . Even more than the startled jumping Panda. (Thanks David Fry for photo)

The dramatic drop in job losses coupled with a positive +2.8% GDP growth for the last quarter is certainly good news for every bull on Wall Street and Main St. Economic momentum is flowing in a positive direction both in the USA & especially emerging markets.

Why?

There’s good, bad, and ugly behind the positive economic news . Since, Obama’s Afghanistan policy is such a disaster (at least to those of you who have commented and Investors411 – See additional Clinton, Gates LINK [we're nation building & there for as long as it takes] and Friedman [against surge LINK ] on Talk shows over weekend) lets start out today with the good and give Obama some credit.

There are 4 major reasons why we have seemingly turned a corner. - TARP, emerging markets, printing money, and stimulus.

TARP – Bailing out Shadow Banks was started by Paulson/ Bush and continued under Geithner /Obama.  TARP is working better than almost everyone expected. Last week Bank of America announce plans to pay back $45 billion (plus interest)and losses far less than expected. See NYT. See LINK

Emerging Markets – They kept emerging, especially China. (see past Investors411) They’re the locomotive and we are the caboose.

Printing Money – The Fed just kept printing trillions of dollars faster than a super market buys toilet paper. The unusual part is investors from around the world bought truck loads of that toilet paper in the form of US treasury bonds with insignificant interest rates. If/when rates go up, boy will those  investors have a huge supply of TP to whip their ____.

Stimulus - Around the world governments stimulated their economies with programs. You can make a case for Germany & China’s program being better than ours, but Obama’s stimulus (he was limited by Republican opposition) was relatively good.

Remember the old story of you can give a poor man a fish or you can teach him to fish. Well, economists have ways of measuring just how stimulative throwing money at a problem is. Does your dollar buy  even one fish or lots of fishes?

• The Republican mantra is always cut taxes – Mark Zandi , economist from Moody’s and a McCain’s economic adviser “making all the Bush tax cuts permanent and cutting the corporate tax rate–would raise GDP by at most 37 cents for each $1 of revenue loss. ”
  
• Obama’s stimulus – “By contrast, increased outlays for infrastructure, aid to state and local governments and extended unemployment benefits increase GDP by between $1.41 and $1.57 for every $1 spent.”

The bipartisan Congressional Budget Office measured the whole thing and you can find more on why/what stimulus worked at LINK

Common Sense – Yes there are time tax cuts work especially targeted and in a recession.

But, when you cut taxes to a company you never know where that money is going to go – Fat bonuses for executives, a new home in Dubai (the global sex slave capital of the world), buying financials WMD’s (Warren Buffett’s term for Credit Default Swaps) or sometimes even good stuff like into research & development.

What you want to have happen is DEMAND increase for your product. The more money flows, the more demand. The reason you see sources like CNBC, right wing polls and think tanks always call for tax cuts is they control the companies or the companies are their big advertisers/sponsors.  Greed is good for me is their mantra.

KISS & STOCKS

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500

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

Technicals, Fundamentals & Analysis

Economic Bears were shocked and awed at the fall in unemployment. Great news for Main Street USA, but we have a deep deep hole to climb out of.  This is mixed news for US Stocks.

The news is mixed for Wall Street, because good economic news in employment means the government/Fed will probably stimulate less. Therefore,  financial companies will no longer be able to borrow for nothing,  and their interest rates will rise sooner rather than later.  The dollar also gets stronger and those companies making more because the cheaper goods sold faster overseas will cost more – looss demand & profits.

Technically we had HUGE volume accompany a price rise. Unfortunately, for most major indexes the rally was less than a significant 1%. Stocks first went way up, then down and settled for moderate gains.

Small cap stocks, are more dependent on a recovery on Main Street did gain a significant +2.38% Bigger companies have more contracts abroad.

Fearless Forecast – Last weeks unexpected positive jobs number helped create a positive week. Investors predicted a flat to down week. Oops. This week we should be all over the place, but some solid economic fundamentals are coming into the light. This should help stocks in the long run. Once the dollar calms down (expect it to rise and gold to fall) we should improve. Flat to up week .

Now going to get a bit more technical

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

——–

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 a small rose +45 points yesterday and closed at 4107. Technically  the BDI broke out through its major resistance level 4291 (this year’s high) over a week ago.  The BDI has rallied about 1800 points since late September. After 16 up days in a row, 9 down days in a row & now up 3 days in a row. Multi day moves in one direction are common and the decline in rate of change usually signals a reversal.

What it means – Long term we created a higher high on the chart = Bullish. The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets. After, what looks like a technical correction we are agin moving higher.

——-

The Dollar is currently the #1 forecasting tool .

$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 US dollar rose an ENORMOUS +1.44% Friday . Anything close to or over +/- 0.50 is significant  The dollar closed at $75.59 .

The dollar’s rise did temper the rally, but the whole dynamic or fundamentals have changed. See Positions below.

——-

$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at +23,51 This is a Slightly Overbought Position . This chart is showing we seemed to have reached a plateau. It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 .  There has been no clear buy or sell signal for over a month.  Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell

The closer we get to +/- 60 the better our chances of making money with a shorter term buy/sell signal

Positions

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

(again a little behind on latest moves)

We’ve had, and volume has confirmed, a quantum shift in markets. This may be temporary and it may be long term, but it necessitates major changes in positions.

Today is a confirmation day for Friday’s move.  More than anything else – looking for dollar to hold or add to gains.  Will buy some ETF’s and stocks until McClellan says we are overbought (@+60)

Recommended ETF’s and Trades

SELLING

GLD – Investors411 sold all of DGP several trading days ago and 1/2 of GLD on Friday. Last entry into this position was at $92.7 .  Traders should sell the rest and longer term investors could hold onto last 1/2 position (5% of portfolio).

Gold will rise again, but for now there is just too much downside momentum. Will be back into GLD & GDP late.

NVS -The flu scare is over. Thenumber of states that have serious flu has dropped from 43 to 25. Time to take profits on last 1/2 this position. Let’s take our profits 21+%

AMZN – Taking profits. Markets rallied yesterday and AMZN dropped 2.54%. Never a good sign to see NASQ rally 1% and your tech stock drop. Again, this in part, was a flu play. Why be greedy we have about a 16+% profit.

BUYING

FXI – Adding more to this positions. If Main Street is recovering faster than expected, so will China. Their currency & exports is tied to the dollar. So in one major sense, their recovery is tied, in part, to the USA. They have under performed major USA indexes recently.

IWM or UWM (an ultra fund that does basically 2x IWM) These ETF’s both track small cap stocks (Russell 2000) IF, Main Street is recovering faster than expected they should outperform the other indexes. They have under performed so far and should,like China, make up soe lost ground relative to other major US indexes.

BAC – Bank of America. They’re paying back TARP shows solid fundamental strength. (I know they are a shadow bank bad guys) Bought BAC Friday.

Start small & Build your position – Buy the dip.

Again any stock investment or ETF that doubles or triples what a normal ETF does is a short term play for traders and short term investors – NOT long term Investors .

Long Term Outlook = CAUTIOUSLY BULLISH

Great Cartoon on al Qaeda

Sorry, I had trouble loading this “Troubletown” image by Lloyd Dangle

But here’s the LINK

“Mind Your Own Business”

Isolationism has returned to the USA.

49% of US residents believe “The US should mind its own business internationally and let other countries get along the best they can on their own,” according to a Pew Report. Up from 30% in 2002.  44% disagreed. UPI story – LINK

Headline from Pew – “U.S. Seen as Less Important, China as More Powerful
Isolationist Sentiment Surges to Four-Decade High.” The poll also has some significant opinions on what the Council of Foreign Affairs believes (Who is the CFA LINK )

LINK to Pew Poll .

US has just launched a major offensive attack with 1000 soldiers in Afghanistan. Local cable & networks has all the fireworks for those who still want to watch shock and awe.

Global Warming

Reality – Let’s for the sake of argument say the there is a 2% chance the scientists are wrong about Global Warming. So what?

The era of cheap energy is over. Natural resources are finite . The energy sources we use most are pollutants that also kill. Go breath the polluted coal dust in China’s air (slow death) or shut yourself in the garage with your car running (quick death)

It’s technologically wonderful that we can drill five miles beneath the ocean and then go horizontally to find oil and/or squeeze oil out of rock/shale.  But besides pollution this is also obviously dramatically more expensive in cost. We are also becoming more dependent on foreign supplies/dictators for energy. Therefore,  strategically,environmentally, and economically we need to diversify energy resources.   Stop being idiots and work to diversify energy sources.

KISS & STOCKS

Keep It Simple Stupid

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, Fundamentals & Analysis

Dollar rose a wee bit and stocks fell. Looks like fear of bad jobs report spooked the markets.

Volume was way up on the Dow and significantly above the moving average for the S&P 500. Large volume on a moderate down day (less than 1%) is bearish . Perhaps this is a whole lot of traders expecting bad numbers for the jobs report.

Jobs # for Novembe r

Headline -  10.0% Unemployment . HUGE POSITIVE SURPRISE Unemployment number drops from 10.2% in Oct. Job loss is -11,000 jobs , (5 digits not 6) and the revisions of past two months way down. Oct. down from -190,000 to -110,000. Sept. down -80,000 too. The non farm payroll decline is greatest since Dec. 2007

These numbers are too good.

Now going to get a bit more technical

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

——–

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 rose +144 points yesterday and closed at 4062. Technically  the BDI broke out through its major resistance level 4291 (this year’s high) over a week ago.  The BDI has rallied about 1800 points since late September. After 16 up days in a row, 9 down days in a row & now up 2 days in a row. Multi day moves in one direction are common

What it means – Long term we created a higher high on the chart = Bullish. The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets. After, what looks like a technical correction we are agin moving higher.

——-

The Dollar is currently the #1 forecasting tool .

$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 US dollar rose  +0.08% yesterday . Anything close to or over +/- 0.50 is significant  The dollar closed at $74.71 . 

——-

$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at +4.82 This is a Neutral Position . This chart is showing we seemed to have reached a plateau. It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 .  There has been no clear buy or sell signal for over a month,. Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell

The closer we get to +/- 60 the better our chances of making money with a shorter term buy/sell signal

Positions

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

This section need to be updated – Sold 8% (24 to 16 % position in portfolio) of FXI and all of DGP. Taking profits was a mistake and bought back all of DGP (Double gold) & 1/2 of FXI.  This all happened because yours truly got spooked over the Dubai crisis.

Recommended ETF’s and Trades

DGP – Investors411 once again sold all of the DGP (2x what gold does)position at 32.7 yesterday. (see yesterday’s Investors411 – danger of going parabolic)  About a week ago I sold  DGP for a +6% gain. This time it was only a +3% gain. Still holding onto some GLD and expect a pull back.  We have NOT had a big parabolic move higher, but perhaps a small one and are definitely over extended. Gold is going to drop like a stone today because of jobs report (see yesterday’s update) The DGP play is only for traders and short term investors.

NVS – Tightened the stop on NVS to @ 5% below where it is now.

AMZN – Perhaps it was a mistake to hold onto this stock into the jobs report, but we still have 1/2 position if this stock. It’s up almost 20%, but due for a pullback.  Again any stock investment or ETF that doubles or triples what a normal ETF does is a short term play for traders and short term investors – NOT long term Investors .

Long Term Outlook = CAUTIOUSLY BULLISH

Will Any of YOU Defend Obama?

huffington post phot

Check out the last 4 comments on the right side of the Blog starting with Bob Sadinsky’s – “Republican Lite” Besides someone else would have done worse (McCain & Palin) is there anyone out there who will sing Obama’s praise?

D. pointed out Tom Friedman’s we need nation building at home not Afghanistan  -  LINK Popeye does damn with faint praise – Afghanistan speech was a brilliant political move for Obama & Abby Gold reminds us what’s happened in Afghanistan to invaders for the last 100 years.

One of you privately sent me an email of someone very significant who praised Obama on Afghanistan – Mike Huckabee LINK Huckabee was the leading Republican candidate for president. Unfortunately, he’s toast as a candidate. He granted clemency to the guy who killed the 4 cops sitting in a Washington cafe.

Huckabee might not have  been your political cup of tea, but he was a decent guy who, like Obama made overtures to fellow American’s who disagreed with him. The Republican’s leading alternative is probably Sarah Palin – God help us.

So here’s some Obama good news from me besides he gives eloquent speeches – Bank of America is repaying $45 billion of its TARP loan with interest, the economy is clearly stronger as measured by GDP (in part due to stimulus package) and the rate of job loss is declining.

Remember Larry Wilkerson’s words from yesterday’s Update -

“If you are a praying person, he {Obama} needs your prayers and support. If you are not, he needs your support. Because all of us Americans put him where he is–and I do not mean by votes. We–all of us–let George W. Bush and Richard B. Cheney set us up. Moreover, we all contributed to creating the perilous fiscal state that is now a more dangerous threat to our country than any terrorist could ever hope to be”

KISS & STOCKS

Keep It Simple Stupid

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, Fundamentals & Analysis

The dollar rose a modest +0.34% and this seemed to keep a lid on a growing desire for stocks to rally.  Were in December so I guess you can call it a Santa Clause rally led by internet retailers like recommended AMZN (at new high)

Bernanke’s confirmation hearing goes in front of congress today. No matter what you feel about the guy, if he does not get confirmed it will hurt stocks.

Jobs # for November on Friday.

Now going to get a bit more technical

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

——–

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 rose +82 points yesterday and closed at 3836. Technically  the BDI broke out through its major resistance level 4291 (this year’s high) over a week ago.  The BDI has rallied about 1700 points since late September. After 16 up days in a row, 9 down days in a row & down through the former resistance/now support level 0f 4291 . This is a chart that usually gives off signals – the rate of decline was slowing and yesterday turned.

What it means – Long term we created a higher high on the chart = Bullish. The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets. Recent price drop-Nothing to panic about yet

——-

The Dollar is currently the #1 forecasting tool .

$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 US dollar rose  +0.30% yesterday . Anything close to or over +/- 0.50 is significant  The dollar closed at $74.64 . 

——-

$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at +25.24 This is a slightly Overbought Position . This chart is showing we seemed to have reached a plateau. It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 .  There has been no clear buy or sell signal for over a month,. Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell

The closer we get to +/- 60 the better our chances of making money with a shorter term buy/sell signal

Positions

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

This section need to be updated – Sold 8% (24 to 16 % position in portfolio) of FXI and all of DGP. Taking profits was a mistake and bought back all of DGP (Double gold) & 1/2 of FXI.  This all happened because yours truly got spooked over the Dubai crisis.

Recommended ETF’s

Gold (GLD & DGP) – (recommended positions) is also at a new high. Warning – this ETF is starting to go parabolic (up too far too fast) Perhaps we have reached the top of the parabola. If  we have another day or two of volume increase and major price move (above 1%) we will probably get at least a short term hit. Long term holders – the fundamentals are still good. Traders and shorter term investors keep a close on this growing parabola. Time to take some profits – now or in next few days (depending on escalation of price & volume)  Sell into the parabola

MOO – Our new agriculture ETF is also at a new yearly high and on a breakout run.  Each of the recommended ETF (except anything that is 2x or 3x a sector or country) is hopefully a long term position.  This stock is fundamentally aided by the growing middle classes of India and China eating better and a falling dollar.

EWZ (Brazil) – Again at a new high.

FXI – Overall excellent for the year, but lagging right now and within a few percentage points of new high,

NVS -(A stock, not an ETF) Our swine flu play – we had a nice run with this stock now up over 20% – It is a solid company, but it was mainly a swine flu play.  Our town is getting out shots on the 7th.   We already took 1/2 the profits on NVS and will take the rest in any slight rally. The scare is diminishing. This stock had a big volume decline yesterday. Looks like the momentum players are heading for the exits.

Long Term Outlook = CAUTIOUSLY BULLISH

Obama at West Point

Most Eloquent Speech vs Horribly Flawed Strategy.

• The  center of terrorism is NOT Afghanistan, but anywhere there is an apartment, cave, pick up truck with a committed individual – A fanatic with a gun/explosive, cell phone,computer and money. Examples – Fort Hood, Oklahoma City, & Pakistan
  
• The generals who dictated this strategy are extremely happy. McChrystal “The Afghanistan-Pakistan review led by the President has provided me with a clear military mission and the resources to accomplish our task.” LINK
  
• Vintage Bush fear mongering of WMD’s at end of Obama speech on the nuclear weapons in Pakistan. Yes, difference is these are real WMD’s in Pakistan, but is the Obama/McChrystal strategy the answer. Dawn is the largest English speaking daily in Pakistan (relatively pro USA) Here’s what their readers say LINK
• Top 10 reasons Obama plan could fail by mid east expert Professor Juan Cole – LINK
• Rationale for the 3rd surge in Afghanistan is based on unrealistic concept of success of surge and success in Iraq. (see past updates – more later) What’s needed here is a standard business cost/benefit analysis
• We took out the Taliban in 7 weeks with a few thousand (guesstimate) American boots on the ground in 2001. Why is the situation so much more dire now? (see above on Iraq for partial answer)
  

Larry Wilkerson , former chief of staff to Sec. of State General Powell has the best summation in his Damed if you do Damed if you don’t editorial LINK

“If you are a praying person, he {Obama} needs your prayers and support. If you are not, he needs your support. Because all of us Americans put him where he is–and I do not mean by votes.

We–all of us–let George W. Bush and Richard B. Cheney set us up. Moreover, we all contributed to creating the perilous fiscal state that is now a more dangerous threat to our country than any terrorist could ever hope to be”

KISS & STOCKS

Keep It Simple Stupid

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, Fundamentals & Analysis

Volume was up a wee bit and the NASDQ actually hit average volume (50 day Moving Average).  So volume really did NOT confirm the price move. But volume is NO longer the #1 confirmation or forecasting factor of a price move - The Dollar is. – It fell over -0.50% and, therefore, stocks had a significant price rally Significant = basically +/-  1.00% for major indexes)

Now going to get a bit more technical

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

——–

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 fell -61 points yesterday and closed at 3836. Technically  the BDI broke out through its major resistance level 4291 (this year’s high) over a week ago.  The BDI has rallied about 1700 points since late September. After 16 up days in a row, now, 9 down days in a row & down through the former resistance/now support level 0f 4291 . Rate of decline seems to be slowing .

What it means – Long term we created a higher high on the chart = Bullish. Short term we are on the way down = Bearish The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets. Recent price drop-Nothing to panic about yet

——-

The Dollar is currently the #1 forecasting tool .

$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 US dollar fell a significant -0.53% yesterday . Anything close to or over +/- 0.50 is significant  The dollar closed at $74.41 . 

——-

$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at +13.70 This is a slightly Overbought Position . This chart is showing we seemed to have reached a plateau. It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 .  There has been no clear buy or sell signal for over a month,. Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell

The closer we get to +/- 60 the better our chances of making money with a shorter term buy/sell signal

Positions

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

Best recommendation – It’s time to buy some protection. Iran , lost a 25 to 3 vote in the UN regarding their desire to achieve nuclear weapons or nuclear power (if you trust Ahmadinejad believe the later) The chances Israel or the USA will attack is growing. Obama committing more troops to Afghanistan further surrounds Iran. The price of oil will skyrocket if therethere is an attack.

Some other terrorist event may occur over oil.

So, on dips, buy the commodity oil. I have to check this out further, but the appropriate commodity (not company based) ETF’s seem to be USO & OLO (OLO does 2x what oil does) The later is very thinly traded. Going to work up to 10% of portfolio.

Your comments (Monitor) – Be happy with 22% position in GLD . Activision – Good story behind this game producers – each time they produce a better sequel to a hit game their revenues grow. Might wait till ACTI breaks out of consolidation trend and/or market gets oversold. MOO – need more time, but will get to more analysis.

Bought back DGP at 31.70

Long Term Outlook = CAUTIOUSLY BULLISH

A Financial Dr Strangelove

Larry Summers , Obama’s chief economic adviser, is the financial Dr Strangelove of this administration. Ever since his nomination was first suggested, Investors411 has strongly objected to his controlling influence in our economic policy. Summers was the protogee of Goldman Sachs CEO Robert Rubin. He took over as Sec. of Treasury under Clinton and approved laws that gutted consumer/taxpayer financial protection.

Summers, has time after time backed the unregulated capitalism, that even Alan Greenspan has admitted was a mistake.  The latest expose comes from the $1.8 billion that vanished from when he was President of Harvard University. Boston Globe LINK

Summers has over ruled the voices of reform within the Obama administration.

Trickle Down Economics

Summers and the Obama administration are running the same kind of trickle down economics that widened the gulf between the rich and poor under Ronald Reagan . They’ve continued Paulson’s (Bush’s Sec. of Treasury) socializing the risk for the wealthy and making the middle class taxpayers pay.

Wall Streets wealth (rise in stock prices & shadow bank bonuses) is being led by rebounding emerging markets and American companies investing their money and jobs abroad.  The reason the Russell 2000 (smaller companies) lag the other major US indexes is they do less business abroad. Big Shadow banks (up collectively well over 100%) are getting bailed out with trillions of dollars (both printed money and your tax $) Main Street gets chumb change.

Nobel Prize winner Paul Krugman editorial in NYT states on jobs”There’s a pervasive sense in Washington that nothing more can or should be done, that we should just wait for the economic recovery to trickle down to workers. This is wrong and unacceptable. “ LINK

He offers the following jobs solution LINK

The Bigots Demonstrate at Our School

KISS & STOCKS

Keep It Simple Stupid

For those of you whose eyes gloss over in the stock section I’ve tried to KISS it today, but I left a little in for those who want the deeper analysis

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, Fundamentals & Analysis

For the moment the Dubai economic meltdown has stabilized because oil rich Abu Dhabi has promised to bail out the over leverage Mid east playground for the ultra wealthy. Volume, was, of course up over the 1/2 day trading Friday, but still below average. 3 of the 4 major indexes (not small caps – Russell 2000 – This index makes most of its profits from within the USA) have all achieved higher highs - Bullish Hopefully they are now in proves of achieving higher lows.

Repeating mantra = The dollar rules – The trend here is a moderate or slow decline of the dollar.  What would reverse this is an event like an attack on Iran – stocks would fall & the dollar would rise.  Perhaps, technically, there could be a short term rise in the dollar.

Obama’s Afghan speech tonight – Escalation in war, to a rational person, would ususally mean an immediate drop in stocks.  But, these are NOT rational times.

Now going to get a bit more technical

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

——–

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 fell -87 points yesterday and closed at 3887. Technically  the BDI broke out through its major resistance level 4291 (this year’s high) over a week ago.  The BDI has rallied about 1700 points since late September. After 16 up days in a row, now, 8 down days in a row & down through the former resistance/now support level 0f 4291 .

What it means – Long term we created a higher high on the chart = Bullish. Short term we are on the way down = Bearish The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets. Recent price drop-Nothing to panic about yet

——-

The Dollar is currently the #1 forecasting tool .

$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 US dollar fell an insignificant -0.17% yesterday . The dollar closed at $74.80 . 

——-

$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at -17.07 This is a slightly Oversold Position . This chart is showing we seemed to haveave reached a plateau. It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 .  There has been no clear buy or sell signal for over a month,. Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell

Positions

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

I did get a chance to do some editing in the Positions Section of the blog. ( Note 2 added positions)

From Friday – Probably going to take some profits today (sell 1/3+ positions) in FXI, EWZ, GLD & all of DGP. Hopefully, will get a chance to buy back into these positions when the McClellan Index gets oversold. Personally I did sell/take profits on 1/3 of FXI & all of DGP . No one ever went broke taking profits – but right now this move looks like a mistake.

List of positions & percent of portfolio (see positions section for more)

16% FXI

16% EWZ

11% GLD

10% MOO (agriculture ETF – more later on this)

5% AMZN (stock)

5% NVS (stock)

5% BRSIX – not listed in Investors411. A small cap mutual fund that I’ve owned for almost a decade ( I liked the company because they gave a lot of profits back to charity)

10% -  3 Bonds – not listed in Investors411 that I’ve owned for years.

sometimes @15% in day & swing trading I do not discuss in Investors411 & the rest in cash.

Best recommendation – It’s time to buy some protection. Iran, lost a 25 to 3 vote in the UN regarding their desire to achieve nuclear weapons or nuclear power (if you trust Ahmadinejad believe the later) The chances Israel or the USA will attack is growing. Obama committing more troops to Afghanistan further surrounds Iran. The price of oil will skyrocket if their is an attack. Yesterday Iran’s navy picked up some Britsh racing ship.

Some other terrorist event may occur reguarding oil.

So, on dips, buy the commodity oil. I have to check this out further, but the appropriate commodity (not company based) ETF’s seem to be USO & OLO (OLO does 2x what oil does) The later is very thinly traded. Going to work up to 10% of portfolio.

Long Term Outlook = CAUTIOUSLY BULLISH