Investors 411 Blog

by Barr Jozwicki
January 27, 2010

Guest Editorial – Fixing the Budget

Author: Barr Jozwicki - Categories: Market Update

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

Monopoly Logo 123.png

Fixing The Budget

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

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

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

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

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

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

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

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

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

Have a different View? Is Yankee Bob right?

How would YOU fix the deficit and stimulate economic growth?

Send your view into comment section of blog.

-

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -0.03% up
NASDQ -0.32% up
S&P500 -0.42% up
Russell2000- -0.96% -

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

Technicals, Fundamentals & Analysis

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

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

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

Three major fundamental problems confronting markets.

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

Significant indexes

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

Positions

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

These are positions I actually own

SELLING & BUYING

ETF Watch List

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

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

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

See Sunday’s analysis.

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

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

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

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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January 26, 2010

Obama Brian Freeze

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , ,
Obama_Hoover

Obama’s Brain Freeze

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

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

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

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

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

We the Corporation

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

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

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow +0.23% down
NASDQ +0.25% down
S&P500 +0.46% down
Russell2000- +0.16% -

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

Technicals, Fundamentals & Analysis

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

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

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

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

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

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

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

Significant indexes

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

Positions

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

These are positions I actually own

SELLING & BUYING

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

YOUR Stock watch list

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

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

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

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

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

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

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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January 25, 2010

What Would You Cut

Author: Barr Jozwicki - Categories: Market Update - Tags: , , ,

What Would You Cut?

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

Most of Budget Goes Toward Defense, Social Security, and Major Health Programs

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

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

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

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

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -2.01% up
NASDQ -1.12% up
S&P500 -1.89% up
Russell2000- -1.76% -

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

Technicals, Fundamentals & Analysis

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

Three major events for week

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

Significant indexes

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

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

We are way oversold so expect a Bullish week.

Positions

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

These are positions I actually own

SELLING & BUYING

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

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

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

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

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

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

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

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

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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January 24, 2010

Dr. Jykell& Mr Hyde

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , , , , , ,

Poster from 1880

Your Comments

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

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

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

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

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

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

There is a quantum shift in that investment advice below

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -2.09% down
NASDQ -2.67% down
S&P500 -2.21% down
Russell2000- -1.79% -

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

Technicals, Fundamentals & Analysis

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

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

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

Relevant indexes

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

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

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

Positions

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

These are positions I actually own

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

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

Everybody else is selling, now we start to buy.

SELLING & BUYING

More on exact buys and Sells on Monday.

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

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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January 22, 2010

The Day Democracy Died

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , ,

Psycho House

1/21/2010

The Day Democracy Died

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

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

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

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

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -2.01% up
NASDQ -1.12% up
S&P500 -1.89% up
Russell2000- -1.76% -

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

Technicals, Fundamentals & Analysis

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

US stocks got toasted in HUGE volume.

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

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

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

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

Positions

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

These are positions I actually own

SELLING & BUYING

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

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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January 21, 2010

Shadow Banks – Shake and Break?

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , ,

Paul Volker

Shadow Banks – Shake & Break?

The WSJ is reporting that former Fed chair Paul Volker (like Elizabeth Warren one of the good guys/gals in the Obama administration) has finally got Obama’s attention. Perhaps it was the loss of the Senate seat in MA that helped. “Obama on Thursday is expected to propose new limits on the size and risk taken by the country’s biggest banks.”

This should have happened almost a year ago, and we will have to wait to see if this is just political spin or if Obama is serious. Economist Simon Johnson asks all the right questions

How to know if something serious is going to happen – shadow banks stocks will fall.

Author Simon Johnson is the former Chief Economist of the International Monetary Fund, an MIT Professor and author of a must read - The Quiet Coup (referenced in earlier Investors411) This article is about history repeating itself. Financial oligarchies have crushed many developing countries and arguable the IMF helped break those oligarchy. He believes “recovery will fail unless we break the financial oligarchy that is blocking essential reform.

Remember Iraq

A withdrawal was another one of Obama’s “change we can believe in promises.” Virtually nothing’s happened. A poll in the distinguished Foreign Policy magazine states that Arab publics say that ending the US military presence in Iraq is the single most important thing the US could do to improve its relations with that region.

“What they [Arabs] saw as US atrocities in Iraq motivated many of the terrorists active after 2003″

Bottom Line You want to reduce the number of people threatening terrorist attacks on the USA – Keep your promise, stop nation building and get out of IRAQ. What ever happened to elections that were supposed to happen there?

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -1.14% up
NASDQ -1.26% up
S&P500 -1.06% up
Russell2000- -1.07% -

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

Technicals, Fundamentals & Analysis

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

Stocks staged a major fall (below 1%) in increased, above average volume. Volume, our #1 confirmation factor did again confirm the move lower. 3 of the last six trading days have seen significant falls in increased above average volume. While the numbers on the downside could have been larger, this is cause for concern.  It shows institutional investors leaving or selling stocks and stocks go no where without the big boys and girls.

Markets did recover about 30%+ of the losses at the end of the day.

  • McClellan Index at -17.72 = A little bit oversold.  There’s a long way to go till we reach @-60 or oversold or @ +60 or overbought. Notice a clear trend of lower highs and lower lows on chart. = Bearish pattern

IBM & INTC have both had better than expected earnings results and are down (not much – a few %) This is not a good sign for stocks, especially in technology.  It looks like you’ll need a grand slam earnings report to move higher

US Stocks have been flip flopping between up and down days, but volume has been with the bears.

China , who has led the world out of the recession looks to be in a pull back or correction. Down about 10+% . China could correct some more. Odds are US will follow China and some sort of correction is starting in USA. Not logical to see the country leading the world out of recession in a pull back and the US not follow.

Positions

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

These are positions I actually own

SELLING & BUYING

ETF Watch List

Ideally, you’d like to McClellan index below zero (the further the better) and these all would be better buys. The closer to -60 the more you think about buying and the closer to +60 the more you think about selling.

Strategy – going to hold tight till conditions reach overbought or oversold.

Charts set to 2 years – click on ticker symbols.

  • EWZ – Brazil (16% of portfolio) – Reaching a critical inflection point. This chart is either near a low point in forming a base or after an outstanding run of over 100% about to take a hit. Perhaps, like China its time to lighten up.
  • MOO – Agriculture (10% of portfolio) – Latest buy had a strong upside run, pulled back a bit and is moving sideways.
  • FXI – China (Reduced to 6% of portfolio) – Over the last month or two we’ve been taking profits on FXI. (Down from 24% of portfolio to 6% ) Lots of volume when stock moves down and now FXI has established three lower highs and lower lows over the last three months.
  • see Positions section of blog for some considered ETF alternatives

Again – Waiting for McClellan Oscillator to reach oversold or overbought positions before making a major move.

Investors411 opened a small positions in ENOC (2% of portfolio) Bought at 35.95. Of all the stocks on our watch list this one was holding its own on a big down day.  More Later.

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

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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January 20, 2010

A Frog In Hot Water

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , , , ,

A Frog in Hot Water

The old adage goes – Throw a frog in hot water and he’ll jump right out, but you can slowly bring the water to a boil and that frog will stay put.

A little known Republican State Senator, Scott Brown , won a stunning upset victory in the MA Senate race last night. Like Mitt Romney in 2002, he beat  Dem. Shannon O’Brien, Brown toasted another woman who ran a weak campaign – Martha Coakly.  For perhaps the best analysis of what this means see Nate Silver’s Let’s Play The Blame Game

Health Care – Obviously in deep trouble. The only way Health Care would pass is if the House passes the Senate Bill. Since Democrats in the House have already voted for a far more progressive health care plan and will get hit for that in the next election Obama is going to argue why not vote for the Senate version.

Bottom Line – Health care. – You blew it – RIP

That Frog in this case is the typical American worker who is in the pot of ever increasing temperature .

  • Globalization is slowly eliminating working class jobs across America
  • Weapons budgets are growing at the rate of 10 to 20% each year
  • For the first time in our history we cut taxes and went to war.
  • Our federal and trade deficit exploded from 2000 to 2008.
  • The era of cheap oil is OVER. The supply has peaked and the demand from billions of people in emerging markets is growing.
  • Because of our suburban sprawl and relative lack of public transportation we are far more vulnerable to high oil prices.
  • Time tested solutions like stimulating the economy to fix it will not work as well because of our already huge deficit.
  • There fewer and fewer laws to govern excess GREED on Wall St. Main Street has socialized the risk for Wall Street
  • The rich in the USA are getting richer and what’s left of the American working class (those not newly unemployed) are paying the bill
  • As the situation worsens, self preservation kicks in, and Americans care less and less about others.

The American frog is in a pot that’s getting hotter and hotter.

There is an upside to all of this outside the USA. Hundreds of millions (perhaps billions) in emerging markets are increasing their standard of living. They have or are learning to Manage their capitalism and hopefully not repeat mistakes that were made here.  Greed is a powerful factor and one hopes eventually more democracy will grow abroad.  If Time magazine called the last decade The Decade from Hell for the USA – it could get a whole lot worse for the American frog in this decade.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow +1.09% down
NASDQ +1.42% down
S&P500 +1.25% down
Russell2000- +1.75% -

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

Technicals, Fundamentals & Analysis

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

Stocks staged a major rally (above 1%) in decreased, average volume. Volume, our #1 confirmation factor did NOT confirm the move higher. Even though we achieved some new highs (for a calander year) on 3 of the major indexes we are doing it in reduced volume.

  • McClellan Index at +i3.14 = A little bit overbought.  There’s a long way to go till we reach @-60 or oversold or @ +60 or overbought

IBM reported after the bell and beat top and bottom line expectations. This was not a grand slam, but IBM did solidly better, but lost money in after hours trading.   The important news from IBM which does 60% of its business abroad was that their areas of growth were "Brazil, China, & India."

Even though stocks rallied yesterday still believe in down week.

Positions

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

These are positions I actually own

SELLING & BUYING


YOUR Watch List of Stocks . Unfortunately, I’m not daily checking these stocks out. Ideally, you’d like to McClellan index below zero (the further the better) and these all would be better buys. We developed most of these potential stocks about two weeks ago. Check old Investors411 for more.

Again the problem with buying now is that markets are slightly overbought and you would like stocks oversold position. Click on ticker symbol for chart. Going to limit Watch List to @ 10 stocks.  80% of investments wil be ETF’s 20% stocks.

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

  • SEED In a buy the dip position.
  • AAPL big +4.42% rally yesterday. Sitting on breakout point. AAPL moves markets – if this goes higher so does the market.
  • AMZN We sold at highs and AMZN has formed lower highs and lows. In bearish mid term pattern. Will drop from list soon
  • HMIN - Failed breakout, back at lower end of trading pattern. Will drop from list soon
  • CAAS Buy the dip opportunity as CAAS falls to just above 50 day moving average.
  • PCLN Buy the dip opportunity
  • F Still too over extended to buy
  • DRWI New – Big exporter to China -  Looks great but still too overextended to buy
  • ENOC New – Reduces costs for utilities – Great long term chart. formed base for last 5 months moving higher – A buy
  • ATHN New - Software reduces costs for health care - Clear trend higher since June Buy the dip opportunity
  • IMAX Great long term chart – falling back to its 50 day moving average. A buy the dip opportunity

Mistake – I let my emotions over rule logic on IMAX It was too overextended from 50 day moving average to buy at 13.9. So I’ve sold the small position (1% of portfolio I bought at 13.9 for 10% loss) Keeping 1% bought at 12.9 and will add more at lower price.  Perhaps the most important rule of investing learn from mistakes and do not repeat them.

If markets were overbought I’d strongly consider ENOC, CAAS, ATHN, SEED, & PCLN.

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

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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January 19, 2010

Wall St. vs Main St.

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , ,

Warren

Elizabeth Warren – fighting to save the Consumer Protection Agency.

Wall Street vs Main Street

Wall Street is toasting Main Street. You’d have thought even after the huge financial meltdown that almost shattered banking worldwide the situation would change. It hasn’t -beyond preventing a worldwide meltdown. The situation in the USA has not improved. Back in 2009 Investors411 emphasized that economic problems – especially financials were “far far far far far bigger than first imagined.” This is especially true for the USA.

Because of globalization, and almost no financial rules governing shadow banks – what’s good for Wall Street is NOT going to be good for Main Street. Unfortunately, Americans are looking for quick solutions from politicians that cater far more to Wall Street.

The bottom line - America has grown for decades into a two tiered country -Wealthy vs Poor. This divide is increasing.

Matt Taibbi vs. David Brooks

These are two editorialists often quoted in Investors411 – Taibbi’s reply to a Brooks editorial Some real fireworks here.

Consumer Financial Protection Agency

Elizabeth Warren’s fight to save Main Street from the Shadow Banks headlines the Huffington Post blog. Ironically in the tight  Senate battle in Massachusetts the Republican has promised to  be the 41st vote to block this and health care.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -0.94% up
NASDQ -1.24% up
S&P500 -1.08% up
Russell2000- -1.31% -

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

Technicals, Fundamentals & Analysis

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

This was our second big volume decline within 4 trading days.  This time the volume was even more significant.  Usually somewhere between two and four of these “distribution” days where a lot of investors are running for cover signals a reversal in overall market outlook.  So we could have a substantial reversal (5 to 10%).

Intel’ s, The chip making giant, earnings report was the spark for the reversal. The stock itself was down @ 3%. But what set the stage for the reversal was the weaker than expected monthly jobs report.

Bulls do have amo on their side for US stocks (NOT the economy) to move higher.  The outlook for a quick economic recovery is looking  bleaker and that means the Fed will keep interest rates lower longer, Money (unless you want near zero rates) has no where else to go but stocks. Also, and meaningful health care reform is either going to collapse or be extremely week.  This will give a huge boost to stocks (not economics) that profit off health care.

  • McClellan Index at -10.33 = Just slightly oversold.    @+60 or overbought territory & @-60 or oversold. This Oscillator has broken through strong BEARISH support @ zero (see chart). This is in the short term for stocks. NOTE -That if stocks  reach -60 or more this would be a BUYING opportunity.
  • Baltic Dry Index – The BDI has moved higher for the last three weeks.  This is good news for world trade and especially China.
  • US dollar – The dollar had been dropping for over 3 weeks and this had helped stocks. This all changed last Friday as the dollar soared +0.61% For more on all charts see STRATEGY sections

FEARLESS FORECAST – Bears paw prints are everywhere. Volume is starting to confirm the downside move. Between June and Nov. of last year 6 times the McClellan Oscillator reached -60.  It has stayed above -30 for over 2 1/2 months now. This does indicate a bullish stock bias. But we are long overdue for some sort of downside move. Forecast = Down week. However, the case for any meaningful reform from health care to financials (shadow banks) grows weaker each day.  This should temper any stock toasting

The Massachusetts Senate election will have an impact on stocks. Basically the Stock market likes gridlock and if the Republican wins the Dems will loose their 60 vote majority in congress and nothing will get done for at least the last 3 years of the Obama presidency. This means no meaningful regulations. It is a debatable point that Democrats alone would enact reform.

Positions

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

These are positions I actually own

SELLING & BUYING

Proposed schedule (sorry, again, limited time this AM – took the Red eye flight from California) Will cover Stocks & ETF’s tomorrow.

NB – Investor411 is going to make few moves unless we get to very oversold or overbought positions

Weekly schedule remains – (Since Monday was a holiday  charts were the focus of today)

  • Tuesday and Thursday – Stock Watch List
  • Monday Fearless Weekly Forecast and focus on multiple charts
  • Wed. & Friday – ETF’s Watch List

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

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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January 14, 2010

Foxes in the Hen House

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , ,

Lloyd Blankfein, Goldman Sachs

Lloyd Blankfein, Goldman Sachs

Perhaps the #1 Shadow Banker

Congressional Wimps

The Barons of Banking went in front of Congress yesterday and what happened the can best be described in the fact that the XLF (The ETF that measures financial institutions) went up +1.13 .  Congress didn’t lay a glove on the Barons of the Shadow Banks. The Foxes are still in charge of the hen house.

The first step in all this is the restoration of  of the Glass Steagall Act . In 1999 the GS act forever changed big banks from conservative institutions to ones that traded financial Weapons of Mass Destruction (Warren Buffett’s words for CDS’s)

As stated before , we’ve even allowed the "too big to fail financialsNOT to have standard mark to market accounting rules.

Its like robbers (an inside job) blew a hole in the side of a bank wall and took money. You – the taxpayer – insured the losses. But the hole is still there and the bank is not telling us what we lost .

Even The National Geographic Magazine

Weighs in on heath care with a chart Other countries have significantly more doctor’s visits, live much longer and cost far less.

"Why the high cost? The U.S. has a fee-for-service system—paying medical providers piecemeal for appointments, surgery, and the like. That can lead to unneeded treatment that doesn’t reliably improve a patient’s health. Says Gerard Anderson, a professor at Johns Hopkins Bloomberg School of Public Health who studies health insurance worldwide, “More care does not necessarily mean better care ."

On Tuesday Massachusetts votes for a Senator and basically the election is turning into a referedum on Health Care.


Remember to check out Comments Section.

.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow +0.50% down
NASDQ +1.12% down
S&P500 +0.83% down
Russell2000- +0.17% -

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

Technicals, Fundamentals & Analysis

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

We made up for most of the previous days losses, but volume wes lower. The trend over the last few months has been weak volume on up days. Long term this in a bearish trend.

  • McClellan Index at 17.92 = Neutral.    @+60 or overbought territory & @-60 or oversold. This Oscillator as formed a strong support @ zero (see chart). It held once again yesterday , if we break though you might see it fall all the way toward oversold territory of -60

Earnings season has begun and Intel reports tonight

The long term bul l is trend is firmly in place – Short term markets are just a wee bit overbought.

Positions

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

These are positions I actually own

SELLING & BUYING

Proposed schedule (sorry limited time this AM)

  • Monday Fearless Weekly Forecast and focus on multiple charts
  • Tuesday and Thursday – Stock Watch List
  • Wed. & Friday – ETF’s Wacth List
  • Any buy of sell will be immediately mentioned.

Bough another 1% of portfolio of IMAX at 12.9. (plan to add more on another dip)

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

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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January 13, 2010

Ending an Abusive Relationship

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , ,
story

On Ending Abusive Relationships

See the Bill Maher Video on ending an abusive relationship and having "hot sweaty monkey banking sex"

You may ask – Whose Bill Maher to give relationship advise?

Yesterday we went down to our local community bank.  We took some of the money of our non profit  (I’m the treasurer) and invested it in a community bank. Boy did it feel good and we even talked to an old flame who had helped us create our non profit a dozen years ago. Pst. Don’t mention the SEX part to my wife.

Today Those big barons of  shadow bankers are going in front of a congressional committee.  Don’t hold your breath. They will get a stern lecture, but as for legislative reform  - Nothing   Fortunately YOU can act.

Over The Top?

Yesterday’s Investors 411 paraphrased a question stated by Daniel Ellsberg who released sensitive government documents decades ago questioning why the US went to war in Vietnam – Did the US military launch a quit coup in the USA (under Bush) and is Obama part of it?

In a broad sense – Lets look at the evidence .

  • President Dwight Eisenhower warned about the growth of the Military Industrial Complex back in 1961
  • The Pentagon budget under Bush grew from $296 billion to $530 Billion and this figure did not include over a trillion for foreign wars.
  • Obama has not removed troops from Iraq and added a third surge in Afghanistan bringing total to a projected  $630 billion this year
  • Obama now asked for $33 billion more for weapons bringing total budget to a staggering $708 billion
  • Our children are glued to video games of violence, death and destruction
  • Our TV is filled with commercial and news shows that fear monger and glorify violence. Violence is often the only solution.
  • We used to seek solutions within the framework of the UN – Korea & 1st Gulf war and now work outside it – Iraq & yes Afghanistan
  • Our murder and per capita rate of violence is by far the highest among industrialized democracies.

You may want to call this "a quiet coup" or you may want to simply recognize the HUGE unilateral growth in fear mongering, weapons systems and glorification of violence as the only solution to problems.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -0.34% up
NASDQ -1.30% up
S&P500 -0.90% up
Russell2000- -1.32% -

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

Technicals, Fundamentals & Analysis

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

Again a last 1/2 hour rally moved stocks higher so there was NOT significant losses for all major indexes. Volume did increase.

  • McClellan Index at +o.07 = Neutral.    @+60 or overbought territory & @-60 or oversold. This Oscillator as formed support @ zero (see chart). So if we break though you might see it fall all the way toward oversold territory of -60.
  • One other Index that analysts use is the put/call ratio . Right now "After a 72% move higher in the S&P 500, [from last years low] a lot of bears are saying that the market has gone far enough and that we are due for a new crash. " LINK This is a prediction of a 10% or bigger pullback.

Earnings season has begun and Intel is the start and perhaps biggest report for techs. I believe they report on Thursday.

The long term bull is trend is firmly in place – Short term markets are neither overbought or oversold, but trending lower

What’s holding markets up? – There are several factors, but perhaps #1 is the expression "Don’t fight the fed." – The fed is flooding the markets with trillions of dollars of extreeeeeeeemly low interest loans . Stocks are the place investors/traders are going to get any sort of return.

Positions

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

These are positions I actually own

SELLING & BUYING

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

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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