I think it was Pogo in the old Walt Kelly comic strip who said it first “I’ve seen the enemy and it is us.”

It Just Gets Worse – Gulf Oil Spill

The NYT is headlining that the size of the spill has been seriously underestimated (Perhaps 4 to 5 times larger) & drilling was allowed in Alaska/elsewhere without permits

Whistleblowers, BP hiding data, BP not following regulations, a giant oil  & More from Big Oil Spill Page

Perhaps, the most alarming or sensationalized news is in the following from Dan Froomkin at Huffington Post -

A new analysis of sea floor video indicates that nearly 70,000 barrels could be gushing out every day, NPR reports. That figure is at least 10 times the US Coast Guard’s original estimate of the flow, and “the equivalent of one Exxon Valdez tanker every four days.”

Bottom Line - The technology may be revolutionary and work, but human error and greed always are factors not entered into the equation. This does changed the balance on everything from drilling off shore to nuclear power for me. (more later) You just can’t mess with Mother Nature. The only way to ensure people play by the rules is to have a strong, (if it has to be) big, tough government that enforces these rules.

If our politicians protect shadow financials or any shadow company (BP) – they should be voted out of office.  All we have now seems to be crony casino capitalism.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

Stocks moved significantly lower in weak, below average volume. Because volume was weak = NEUTRAL

From Yesterday - All week long the 50DMA of the benchmark S&P 500 has been mentioned as a key resistance level = RED light for markets.

What happened yesterday - Stocks again bumped all day against the 1173 S&P resistance level. It became evident that the S&P 500 was going to not break out. At 3:00 PM EST  all the major institutions came in and sold driving the market down toward its key @1150 support level. S&P ended day at 1157.44. Closing at low = Bearish

If we close below 1150 today = Bearish Therefore 1150 is the line in the sand to watch.

The increased size of the Gulf oil Spill is going to be along term negative on most stocks, if the new analysis turns out to be correct = Bearish

European stocks down @ 2% this AM. = Bearish

Shadow banks seem to be winning the financial reform battle = Bullish

Significant Indexes

• McClellan Oscillator fell to -29.08 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is NEUTRAL territory.
• US Dollar – rose +0.63% yesterday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important Dollar Rules because it broke out to new high is a significant move. = VERY BEARISH
• The BID – Kept climbing. It has broken out to a new 5 month high. The Baltic Dry Index measures the cost or flow of goods/trade between countries. This is positive for export countries like Brazil and China and commodities. Goods costing more means trade is increasing. One analysis of this is shipping costs are rising because of Gulf oil spill. = Neutral

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own

Sold ( took profits in) 1/2 of Investors411 positions in TYH yesterday when it became evident that we were NOT going to break out in the S&P 500.

Time to take some profits, especially if you did not yesterday. (no one goes broke taking profits)

• The dollars breakout move yesterday is very bearish in the long term.  The dollar is rising because the Euro is falling.  Most analysts I’ve heard expect this breakout to continue.
• The McCellan Oscillator is in NEUTRAL territory and has a ways to go before -60 or even lower. It did get down to -123 last Friday . Do not believe  we will reach those levels again soon. But, the dollar is acting like an anchor on any stock advance.

Traders sell at open and/or wait for a rally.

Again the major tipping point is a drop below S&P 1150 support. Perhaps it will hold, but if the dollar keeps moving higher the best US stock will do is move sideways.

China FXI is going nowhere.  As mentioned earlier this week it is a canary in the coal mine stock.  This canary over the last few days did not rise as fast as US stocks. Therefore it has started to chirp. FXI is one position Investors is going to sell today.

Yesterday @ 5+% was taken off the table (see Positions) & will do another 5 to 10+% today.  That total will be up to 1/2 of what was recently invested.

We can buy back in when the McClellan reaches a lower level. Obviously I could be wrong, but the dollar’s move is significant.

GLD is looking good to buy on dips.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

-

The Magic McClellan

In answer to Doggie’s Mom, Monitor, D & The Critic comments on the MO. First the McClellan Oscillator (MO) used to forecast buying & selling is obviously not magic. We did score big when the MO dipped and we bought in Feb.. We sold when the MO got too high, and we have had some quick outstanding gains this week.

There are well over a dozen other recognized methods  analyst use to measure just about the same thing. Each technical indicator has to be used with a little common sense, reasoning, and a bit of luck.

What happened is the MO got so low (the only time it was a little bit  lower was in the 2008 panic meltdown) or stocks got so oversold that we ran out of sellers.  The odds of a bounce back increased. Reasoning – the crisis was not as immediately bad as it was in 2008. (In the long term things could get worse) This is Warren Buffett type of investing - buy when there is panic in the streets and sell when bulls are stampeding out of control.

For more see  Technically Why Markets Moved Higher & McClellan Oscillator below.

Caution – Nothing is close to 100%. Also, when something starts working well all analysts use it and it stops working. There is a lot of interpretation beyond and in the +/-60 overbought & oversold levels.

Teabaggers

John Sovjani, Who is in no way a Tea Party, Sarah Palin (their darling) or FOX News (their promoters) advocate, has a point. Deficits and Big government (you can go overboard and perpetuate poverty in social welfare) can be very harmful in the long run – A mantra of the Tea Party. These problems need addressing in a systemic fashion but not in a fear mongering, white only, anti Obama fashion as JAB, Popeye and Paul R have pointed out.

The biggest deficit creator of the last few years happened because of the 2008 shadow bank meltdown. Paulson, Bernanke, Bush & later Obama & Summers had two paths

• Another Great Worldwide Depression.
• Bailouts, Print money,Stimulate the economy and tax cuts.

The second choice is far less harmful, but obviously created a deficit problem. Letting the insurance and banking system collapse worldwide would have been catastrophic. The folks who created the over leveraged banking problems were the shadow banks themselves and their supporters. The tea baggers were virtually silent when it came to reform of the banking system. Therefore, I understand their power, but see hem as hypocrites.

There is a need for Big or strong government to regulate Shadow banking. Who else will?  The 3 Republicans and 30 Democrats who voted for Kafman/Brown legislation limiting the too big to fail banks are the Teddy Roosevelt’s/Heros of our time. It’s hypocritical to only speak out against Obama and to protect the Shadow and the opaque system that forced a growing deficit on us all.

Defending Capitalism

Answer to Popeye tomorrow

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

Stocks moved higher in decreased volume. Volume, was NOT a confirmation factor. However after a climax sell off volume usually decreases, and the pattern before markets dipped was rallies in weak volume. Patterns tend to repeat themselves = Bullish

All week long the 50DMA of the benchmark S&P 500 has been mentioned as a key resistance level = RED light for markets. Yesterday the SPX (S&P 500) stopped right on at the RED light. If we can close above this level before the weekend its bullish for stocks.

Technically – Why we rallied - We had a climax selling spree in HUGE volume.  All the weak holders panicked and sold. Everyone left is a more committed to holding investor. Lot of major institutions bought “puts”(bet the market was going to go lower) and were forced to “buy to cover.”  So right now there are not many sellers out there and stocks are moving up. Ultimately we will find some equilibrium or point where a consolidation period begins. (See above on SPX as a possible consolidation point)

There are a small amount of buyers/traders, but no long term sellers right now.

Repeat Great source for what’s happening live in markets around the world & in the US before 9:30 EST Wall Street opening at CNBC Slight upside bias for US right now,Europe, Asia basically up, but this could change in an instant

Significant Indexes

• McClellan Oscillator fell dramatically to -13.40 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is NEUTRAL territory.
• US Dollar – rose +0.32% yesterday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important  Dollar is close to breaking out to new yearly high. = Bearish
• The BID – Kept climbing. It has broken out to a new 5 month high. The Baltic Dry Index measures the cost or flow of goods/trade between countries. This is positive for export countries like Brazil and China and commodities. Goods costing more means trade is increasing =Bullish

Positions

The  Positions Section = latest buys and sells – (Revised positions yesterday) - These are positions I actually own

I again revised all positions held by Investors411 yesterday because so many stocks/ETF’s were bought in the last 4 trading sessions. POSITIONS is also located at top of blog. (Click on the word at the top of the blog and scroll down to 2010)

McClellan Oscillator has reached NEUTRAL territory – Time to STOP any buying – and because of momentum start thinking about taking profits. If you are a trader and can find an individual stock that is not over extended, you can squeeze in a buy.

I really wish things were different (buy and hold forever), but if we see another major rally today Investors411 will take a little money off the table = sell. If/when the McClellan starts to turn into overbought territory its time to think more about selling.

It’s important to look at how far above the 50 DMA a stock gets (compare on chart to other times your stock got too far above its 50 day moving average)- too far = sell

Our Investors411 Positions are up dramatically.  Some well over +10%. (See Tuesday’s charts)

• UWM
• TYH
• IMAX
• VCI
• SNDK
• FXI (weakest & this is troubling – see yesterday’s post)
• ESRX (expect this to be less volatile and slower, but steadier)

I apologize if this is seems complicated. I’m really trying to keep it simple. There are more than dozens of different ways to technically measure stocks/ETF’s.  But Investors tries to Keep it Simple by using only a few and staying with what works.

Paul R has some excellent resources he occasionally posts on the comments section. I’ve also, in the past, recommended the Chart School of StockCharts.com

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

-

Mental Health Break

From the NYT a photo/video Lens on the World

Absolutely fascinating!

Grant 1949 writes in the comments section yesterday - They just keep finding ways of stealing more money from the people who are just trying to survive… read full comment on right side of blog or here

Yep, It’s frustrating when you see the growing divide between those working just trying to keep their heads above water and the power elite in this country.  Frustrating when only 33 Senators vote to break up the big shadow banks. I agree

Hope we all can take some time out today and just ENJOY!!! Give yourself a Mental Health Break

Check out three of  hundreds photos I loved from the Lens on the World – (If you surf the site it just takes a second to load each photo these take @ 10 seconds)

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Stocks held onto the gains made on Monday in expectedly lighter volume. After you have a climax sell off in HUGE volume you expect volume to wind down. = Bullish

The old pattern did NOT returned yesterday, & institutions sold into a 1% rally at the end of the day.  Markets are dominated by huge institutions (Hedge Funds, Banks, Investment houses etc) who all have super fast computers and use trading algorithms. About 1:30 these “black boxes” decided to sell and we ended lower.= Bearish

The benchmark S&P 500 closed  at 1155.79. S&P next major resistance level is the 50 Day Moving Average at @ 1172 and support at @ 1150. This is the major trading range to watch. What happened yesterday was the upper end of the trading range was approached/hit (@ 1172) and the HUGE institutions sold. = Bearish

Great source for what’s happening live in markets around the world & in the US before 9:30 EST Wall Street opening at CNBC Slight upside bias for US right now,Europe, Asia basically up, but this could change in an instant

Significant Indexes

• McClellan Oscillator fell  to -53.40 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is just below OVERSOLD territory = buy = Bullish
• US Dollar – rose +0.38% yesterday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important  Dollar is down from last Thursday’s closing and Friday’s interday high. Still close to breakout levels = Neutral
• The BID – has broken out to a new 5 month high. The Baltic Dry Index measures the cost or flow of goods/trade between countries. This is positive for export countries like Brazil and China, Goods costing more means trade is increasing = Bullish

Positions

The  Positions Section = latest buys and sells – (Revised positions yesterday) - These are positions I actually own

I revised all positions held by Investors411 yesterday. In POSITIONS (Click on the word at the top of the blog and scroll down to 2010)  As part of house keeping I’m going to eliminate the 2009 positions this weekend.

FXI – Investors411 bought this ETF in the China ETF.  This was done based on the volume behind China’s bounce on Monday and the fact that the BDI is rising.  Like most long ETF position there is a 5 to 7% stop loss limit.

Bottom Line - This is a canary in the coal mine investment - if China can NOT move up despite a rapidly improving BDI (see above) then stocks all over the world are in trouble. There are a lot of investors fearful of a China bubble bursting.  We’ll see.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

House of Cards Photo from Dave’s Daily

Shock & Awe or House of Cards

Shock and Awe – What Investors saw yesterday was a European Central Bank willing to do whatever it takes to fix the problem.  This is just what our Fed Bank & government did and IT WORKED. We did NOT have the second great depression. It took us a while (months) for investors to figure this out. They did and stock markets boomed. The same reasoning applies to the EU central Bank. A whole bunch of investors saw fighting the Fed did not work as stocks rose. You can assume the same for the Europe.

House of Cards – The EU choose the same solution that the USA used. They  propped up the big banks that own the debt of Greece/PIIGS in Europe.  What do those banks do to solve their debt problem? The same thing US shadow banks did. Take the money and buy highly leveraged swaps.  The same thing that built the house of cards in the first place.  Have we fixed this problem in the – a definitive NO

Shorter term – probably good for markets (maybe even a year or two)

But long term you can’t keep building/pouring $ into complex, opaque, over leveraged shadow financial systems/banks and not expect another collapse.

For a bit different, more knowledgeable and far more scholarly point of view see MIT’s Simon Johnson editorial

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

The old pattern has returned. Stocks rallied, as expected of the UE bailout news. Volume was above average, but down @30% from the climax sell off of stocks.  Stocks and trading rose higher in the late afternoon. = Bullish

The benchmark S&P 500 closed well above its 1150 resistance level at 1159.73. S&P next major resistance level is the 50 Day Moving Average at 1171.63. Basically stocks recovered 1/2 their losses of last week in one day. = Bullish

Pre markets setting up to be weak-Down a bit less than 1%.

Significant Indexes

• McClellan Oscillator fell  to -64.52 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is still OVERSOLD territory = buy = Bullish
• US Dollar – fell  -0.46% yesterday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important  Dollar is down from last Thursday’s closing and Friday’s interday high. Still close to breakout levels = Neutral
• The BID – has broken out to a new 5 month high. The Baltic Dry Index measures the cost or flow of goods/trade between countries. Goods costing more means trade is increasing = Bullish

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) - These are positions I actually own

The BDI’s breakout is bullish for both Brazil EWZ and FXI (China) Buy the dip.

YOUR STOCK LIST

Dramatic revisions – Some of our old stocks simply did NOT make the cut

Caution - This is mostly just technical analysis and lots of other factors enter into a decision to buy or sell

• Last Week’s comments in black. Since I missed last week’s comments they are out of date so no past comments.
• This week’s in black.
• Ticker symbols are links to charts.
• A Line means stock is in danger of being taken off list.

If you have trouble with terminology email me. 5oDMA = 50 Day Moving Average - blue line on chart.

Most of you are looking for longer term buys. Remember Stocks are in most cases riskier than most ETF’s. Our main strategy is to buy the dip of a stock that is trending higher. The reason some of the stocks did not make the cut was that they fell too far and/or volume was too big behind the fall.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

• CAAS –   (China stock) Like the GOOG of China BIDU – This stock is going to rise or fall with China. The BDI has broken out & that’s good for China. Like almost every stock CAAS broke its bullish pattern last week, but downside volume was not too large. Risky buy the dip.
• PCLN –   Another stock that held up well (Fell but volume not too big) Unfortunately had poor earnings results last night.
• F – Too much downside volume, weak recovery yesterday
• CSCO,    Like (AMZN & AAPL)  the big three two horsemen of tech stocks. CSCO & AAPL make it back because they outperformed tech stocks yesterday. If tech is to recover so will CSCO & AAPL. Cautious Buy the Dip.
• SHOO –  Fell a long way, but bounced off its 50 DMA. Weaker than expected recovery yesterday. Cautious buy the Dip
• ICON,     Fell to 50 DMA in weak volume last week. Yesterday had strong volume recovery Buy the Dip.
• DGIT –   Actually rose last week. Consolidating. If markets move up this one could explode. Overextended from 50 DMA Tempting watch for breakout.
• *VCI. Another stock that held up well last week. Had a breakout to a new high in big volume yesterday. Buy the Dip
• CREE –  Too big a fall in big volume and yesterday’s recovery in weak volume..
• SNDK – Didn’t fall too far, but in big volume. Yesterday’s recovery in weak volume. back in its pattern Very Slight hesitation – Buy the Dip (I own this as a day/swing trade)
• CTRP – Should be toast. Fell all the way to its 200DMA, but had a strong recovery in big volume yesterday Risky buy the dip
• *ESRX (Express Scripts) Added to position on Friday Love the story behind this major prescription provider.  Held up fairly well and had strong day yesterday in reasonable volume. Near breakout levels. ESPX like CSCO not as volatile as the rest. slower steadier - Buy the dip

IMAX is Investor’s411 #1 recommended stock. The others are theater chains that benefit from raised 3d ticket prices but have all under performed and now are gone.

• *CNK (Cinemark) Held up though last week, but fell below 59 DMA yesterday – Sell into rally
• RGC (Regal Entertainment)  Fell too far in big volume. weak volume average recovery yesterday
• *IMAX . Added to position on Friday. Fell to its 50DMA in weak volume and had a weak volume recovery yesterday. Recovery was disappointing. Wait for dip to 50 DMA.
• CKEC (Carmike Cinemas) Fell way too far. Far too volatile

New Additions

• VLTR . Started falling before last weeks meltdown. Weak recovery
• UAUA Fell too far in big volume. Weak recovery day in weak volume
• SLAB Crashed and burned worse than UAUA
• MSPD Barely survives the cut. Big volume fall & weak volume recovery yesterday. But still above 50 DMA – Wait.

Analysis-

• The McClellan Oscillator is at -65 = oversold = Buy.
• The BDI has broken out of its pattern to a new high (see above) This is especially good for China & Brazil stocks. = Bullish

Unforeseen events are impossible to predict, but this is decent time to keep buying the dip.

Hopefully these are long term holds – Sold 1/2 of the IMAX bought Friday for a 9 10% gain. IMAX now 4% or portfolio position & ESRX 3% position, VCI 1%  .

Danger point – If we loose over 1/2 the gains

Added 5% position in UWM at 33.35 yesterday. Placed 5 to 7% stop loss. FXI & EWZ again look like decent buys on dips because of BDI.

Plan to add some more from above ETF’s and YOUR stock list on dips today.

If benchmark S&P 500 rises above its 50 DMA Long Term Outlook changes back to CAUTIOUSLY BULLISH. We’re close.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

-

EU Massive Bailout Package

The European Union & the IMF have done what they had to do to, at least temporarily, to  avert fears in Greece & Europe. From NYT

“European leaders agreed to provide a huge rescue package of nearly $1 trillion to combat the debt crisis that has engulfed Europe, and central banks began injecting cash into the financial system.”

This has sent European stock markets soaring & the US is following. Judging from the  reaction of traders and investors this plan has enough fire power to work.

More Analysis from Seeking Alpha – Too Much Too Late. & Greek Bailout Plan Increased by a Factor of Five

Like the USA the EU has chosen to use further debt to solve a debt crisis and to avert a global financial meltdown.

Nuclear Power (Round 3)

From Yankee Bob [Bolding/color by editor]

Dear John,

Wind, solar and geothermal only need gov. subsidies to level the playing field. All the fossil fuels and Nuclear are HEAVILY subsidized by the gov. so that taxpayer aid should be factored in any cost comparison.

When they, the fossil fuel industry and their apologists, show you cost comparisons,the fossil fuels are cheaper then clean energy. But they have not factored in the tax payer subsidies that the fossils get and dwarf what the clean greens get. They also don’t factor in the tremendous amount of water the fossils consume and waste.

If the coal industry is allowed to mine all of the Powder River Basin, there won’t be enough water in Wyoming left to support life. How many fish kills have the Nuke Plants caused? What happens if there is a terror attack on Indian Point? Can you really evacuate the NY Metro area? Why is the cost to decommission Nuke Plants not factored in to operating costs and why should the taxpayer be left, always, with that bill?! Show me one Nuke plant that opened on time and under budget  and lowered the electric rate!….

This editorial is continued here or in comments section of blog.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Major markets fell again in massive volume. From Friday “On a pure technical basis we are near the end of the downside move.” The last two days of massive volume technically shows a classic selloff.  In laymen terms – almost everybody that’s going to sell has

Europe’s massive bailout package has seemed to positively impacted markets this AM (See above) = Bullish

How this works technically is that a massive amount of traders short the market + Almost everyone who was going to sell has. This creates a position where few sellers are left and the vast majority of traders are short (betting the market is going to go down). These shorts are forced to buy  to cover (buy the stock because they will loose money the higher it goes)

This is all one big fear/greed play and pre-market indictors are way way up. Dow +400 points. European markets up 4 to 9%

Last Weeks Fearless Forecast – “Down Week” We got toasted

This Weeks Fearless Forecast – “Up Week”  (see EU Bailout above) Not a difficult call with pre markets up +400 on Dow

Fundamentals (Europe Bailout and good US employment numbers) are too big to ignore. Markets have technically reacted. Because of the massive move in Europe and pre markets, everything is going higher.  We should get on the rally train at the first dip.

• McClellan Oscillator rose to -123.10 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. – In the last three years the MO has only reached pass this level 3 times –  10/08, 3/09, & 10/09 = We are way oversold = Bullish
• US Dollar – fell  -0.30%.  [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules. Rising dollar almost always = falling stocks. The bailout is going to send the euro much higher and consequently the dollar much lower

Positions

The  Positions Section - latest buys and sells – (Revised positions last weekend) - These are positions I actually own

How The McClellan Oscillator works

Simply the more stocks get over sold the better the odds are of technically making  some sort of gain. The only time the MO had dropped lower (-123)was in the 2008 meltdown.  So it showed us the odds were in our favor. They still are till we reach zero. Only at zero or the 50 DMA change the odds to @50/50.

Investors411 – On Friday near close Bought 2% more IMAX at 17.25 & 1% of ESRX at 97.10. See Friday’s update. Sure wish I had invested more on Friday. Unfortunately, like everyone else, I was fearful.

Will invest 5-10% more in ETF’s early, on the first dip or end of day. Be moderate, don’t get too excited. Remember lots of this initial rally is short covering.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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Senate Fails to Break Shadows

3 Republicans and 30 Democrats stood up to the mega Shadow banks & their lobby yesterday in support of the Kaufman/ Sherod Brown legislation to break these massive financials. Senate Finance Committee Minority leader Richard Shelby (R) & Senate Majority leader Harry Reid (D) vote yes. The above link has a list on how YOUR Senator voted.

Opposition came from the vast majority of Republicans and the Summers/Obama White house. This whole group is owned by  and protects the Shadows.

Hopefully Main Street can still win some crumbs or a pice of the toast instead of getting toasted in the finacial regulatory legislation.

Greece vs. USA

Greece’s problems are many ways are similar to the USA. The major difference is in the solution.

The central Bank of the USA can print money and loan it out at @0% to shadow banks who take that $ and not so secretly invest most of it in highly leveraged derivatives instead of less profitable loans to small business and consumers.

Greece can’t print money to bail itself out like the USA. It is under the jurisdiction of the European Central Bank (ECB). Therefore, it can only get TARP like loans from other countries and the IMF.

Some where down the line all the $ we print are going to slap us with inflation. But for now its kept us from sinking.

EU Contagion

The 2008 collapse has created massive problems for PIIGS and former Russian satellite countries. Example Spain’s unemployment is at 20% Yesterday’s map of debt obligation is the tip of interconnected obligations that spread worldwide and are exacerbated by derivatives sold on that debt.

Nobel Prize winner, Paul Krugman has an excellent editorial. Krugman recognizes the European Union’s main problem

“The problem, as obvious in prospect as it is now, is that Europe lacks some of the key attributes of a successful currency area. Above all, it lacks a central government.”

He goes on and explains how Greece is different than our governments bailout/relationship with California. The only logical endgame is -

“Greece leaving the Euro…unless European leaders are able and willing to act far more boldly than anything we’ve seen so far.”

Another possible solution from MIT’s Simon Johnson & co author.

Bottom Line for Investors – Fundamentally its hard to see a bottom until some resolution comes to pass. Till then, we will all be slowly twisting in the wind.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Massive loss in massive selling. Technically, we have gone elliptical to the downside. On a pure technical basis we are near the end of the downside move. = Bullish

However both fundamentally and psychologically the stocks across the world have been damaged and hopes of a V shaped worldwide economic recovery have turned into U‘s, W‘s L‘s and perhaps worse. The entire group of talking heads on CNBC, the #1 financial cheerleading channel, looked liked deers caught in the headlights. The trotted out Nourille Roubini (a Dr. Doom) to jawbone this AM. = BEARISH

Failing to break massive shadow banks = Bullish

A technical glitch caused caused a massive 1000 point drop in the DOW (similar drops on all indexes)

Therefore, its hard to see any rally NOT getting sold into and another low on the way. Stocks broke through support levels like a knife through butter. The only piece of good news is in the short term stocks are getting so technically oversold that they are close to running out of sellers.

Monthly Unemployment rate up to 9.9% But non farm payrolls up +290,000 This is a STRONG number (@+180,000 was expected) and other months were revised upward. When Obama took office it was over -700,000 I have no idea why such a strong jump in numbers equates to a rise in unemployment. But end result = Bullish

• McClellan Oscillator fell dramatically  to -113.71 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. – In the last three years the MO has only reached pass this level 3 times –  10/08, 3/09, & 10/09
• US Dollar – rose another massive +0.87%. This marks the 4th day in a row of huge gains. You have to go back to the 2008 stock meltdown to see anything similar. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules Rising dollar almost always = falling stocks. The dollar is rising mainly because of the fluctuations in European currencies = Greek debt.

Bottom Line -Roller Coaster Rally day, but real long term fundamental problem from Greece spreading.

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) - These are positions I actually own

The DANGER WILL ROBINSON, DANGER DANGER SIGNAL is as many of you long time readers know is the signal to duck and cover. It the strongest warning Investors411 gives of impending doom.  Investors sold its remaining position in EWZ (Brazil) near the open yesterday for a loss.

Long term what’s happened is bad for US markets - The higher dollar is a killer for any US company that makes profits abroad and will take a chunk out of economic recovery including job growth. Until we see a measurable reversal in the dollar both stocks and our economy are going to have trouble.

Gold has become a proxy currency and Investors411 mentioned last week GLD was a good investment, but never pulled the trigger. A buy the dip ETF

Today, Investors will start nibbling on IMAX & perhaps ESRX on any further dips. Both stocks have compelling reasons for long term growth, except in another world wide meltdown. This may be a shorter term trade

Caution – There is probably more major downside to this market because of Greece. The first major rally will get sold into & Investors will use ETF’s that short the market when this occurs. Example SDS = @2x shorts the S&P 500.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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Nuclear Power

The problem of nuclear waste is the strongest argument against Nuclear power. Yes, it is a deficit that we leave our children and it would be hypocritical to preach against monetary deficits and not nuclear waste deficits. You can’t fool Mother Nature and sooner or later what we do to the environment impacts us all. That’s reality.

Wikipedia has a good sections on all sides of this. I don’t know how close we are to developing reactors that don’t produce significant waste.

My problem is a transitional one.  How do we get to alternative energy  without decimating the economy. It took 10 years in liberal MA and the death of Senator Kennedy to go through another 2 years of litigation to maybe get our first major wind farm. Even Spain and Scandinavian countries that now after decades have maybe 10 to 20% alternative energy are struggling to find new ways to grow.

How do we get form here to there without a serious economic meltdown?

In light of the Gulf disaster this issue is dead for the immediate future.

Immigration

Over 1,000,000 people have NOW signed the petition against the Arizona Immigration Law.

Bravo to the Phoenix Suns basketball team who wore “Los Suns” in their playoff basketball game  to protest.

It’s an affront on all of our civil rights, especially Latinos. It’s completely unacceptable.

“Join us in letting Arizona’s leaders know how we feel, and that there will be consequences. A state that dehumanizes its own people does not deserve our economic support.” You make the difference. The Petition

Here’s an even more graphic protest group

Worldwide Debt Problem

You can call it Greece but it clearly has a massive global impact. What’s at stake is the European Union.  Just about the whole Stock section below contains links and references to this significant crisis.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

From Yesterday - 1168+ The 50 DMA & 1150+ (an old high) are two major support levels on the benchmark S&P 500 We took out 1168 and the S&P closed at 1165.87 Think of these support levels as stop sign or red lights or possible breaks in a highway where you can take a U turn.  Yesterday in heavy volume the benchmark S&P 500 drove on through a red light with a U turn signal flashing. 1150+ next red light/support level. = Bearish

Technically - Another heavy volume decline. Coming after yesterday’s 3rd major meltdown in heavy, increased, above average  volume in a month  and you have bears driving right through whole bunches of red lights. = BEARISH

Yesterday’s market from one of the analysts at SeekingAlpha

Even though we get the monthly employment numbers Friday what’s happening in Europe is over shadowing all markets.

Paul R sent in this chart that shows the huge size and interconnectedness of the Greek/European problem. Here’s the exposure of Euro banks to Greece. What the chart from TheDailyRekonoing.com does not show is the connectedness of the entire world to the Greek debt problem.

The German Congress votes Friday on bailout plans and Greek’s congress amid riots (3 tellers/workers in bank dead) also votes soon.

Significant Indexes

• McClellan Oscillator fell dramatically  to -75,14 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. – The MO has reached Oversold territory
• US Dollar - Had  the third massive gain in a row+0.96% yesterday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important Dollar closed at $84.12. The breakout of the trading pattern to a new high for the dollar focus almost all eyes on the growing value of the US dollar. Rising dollar almost always = falling stocks. The dollar is rising and falling because of the fluctuations in European currencies = Greek debt.

Analysis - Danger Will Robinson Danger Danger – It’s time to bring out the old Lost In Space Robot with all the bells and whistles and shout the Danger signal. What’s happening in Greece/Europe, will impact the world. Here in the USA we have our own PIIGS (countries with problems) – They’re called Michigan, Rhode Island, California, and other states that are close to te edge. We’ve come to the edge of another economic cliff.

Fear is in the streets and that’s often the best time to buy. See positions below.

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) - These are positions I actually own

YOUR Stock List from last week  [Tuesday]. Sorry not enough time to revise the list. Look for stocks that are bucking the trend or falling less rapidly than the major indexes.

The McClellan Oscillator (MO) reached -90 in Feb.,& almost -120 in November. Back in 2008 meltdown the MO reached about-130 It’s now at -75

So we have fear in the streets & you are well aware of the fundamental problems focused on Greece. It’s going to take guts to buy, and a belief that we do not once again stand at the edge of worldwide economic disaster. The German  vote on Friday is crucial to the future – If this report from the UK’s Telegraph is true then we could see longer term slow meltdown. Headline -

Angela Merkel [German Chancellor]  faces defeat in a critical election this weekend as a growing backlash against a £19 billion German bail-out of Greece has threatened to mortally wound her coalition government.

Those investors who can tolerate big risk – now’s the time. Buy when everyone else sells. Those looking for a safer entry point wait for a lower MO – past -90.

Best read of Tea leaves – we will get to -90 and beyond

Short term traders – Buy any dip.

Longer Term Investors - Nibble any bigger dip. What you buy depends on your level of risk SPX is the ETF that mirrors the S&P 500. See Positions Section of blog for more risky ETF’s

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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Nuclear Power

Editorial from Yankee Bob (bolding/color/format mine) in response to my including nuclear power as part of comprehensive energy plan that focused on alternative sources.

Why the hell would you support Nuclear energy??!!

There is no more expensive way to boil water then Nuclear. It’s the most expensive way to produce power when you consider the social costs.

• The deaths from radiation releases that are routine and routinely labeled as safe render it a loser.
• There is no safe place to store the tons and tons of waste unless you’d like to store it under your bed!
• The waste has to be shipped via truck or rail around the country. Sooner or later there will be a deadly accident or terrorists will hijack it.
• The waste will be deadly for 100s of thousands of years. Nice of us to pass the risk on to future generations.

If nuclear is so wonderful,

• why does the industry need the government to guarantee loans so reactors can be built?
• Why does the taxpayer have to assume the risk and get stuck for the tab even if they never produce a watt of electricity??!!
• If Nukes are so safe why does the government have to insure them because private companies won’t?
• What happened to the market place providing solutions?

This new nuke tech they are planning on building does have design problems and has not yet been certified by the regulatory agencies. It’s nuke industry propaganda that is touting their safety,no one else. when was the last time cost analysis factored in the cost of decommissioning a plant? They don’t! What is the cost of the public subsidies for guaranteed loans and gov insurance?

By the way,if you have a meltdown and lose a whole state,do you really think the gov will pay off on the loss of property to common citizens or just corporations? Why can’t we apply an equal amount of public subsidies to good clean solar or wind or geo thermal?

And lastly,without Homer’s Nuke plant making piles of plutonium and where would the weapons industry be. First ,they depended on it for making nuclear weapons and now they make a s–t load of the enriched armor piercing stuff that we have littered Kuwait and Bosnia and especially,Iraq with and it’s probably responsible for the Gulf War Syndrome. Why would you be in favor of Nuclear power? Eventually,we will lose a city or a state.

A shorter rebuttal from John Sovjani

Bob; I think nuclear should be part of the solution. Japan and France get most of their electricity from it. As Tom Freidman has said, we invented and developed it and now other countries are taking it and running away with it. If subsidies weren’t given, which energy tech would succeed in the market place? Also, which technologies do we have now that are proven and how long it will take any of these to have a significant impact without subsidies? Was it 10 years for approval for windmills off Cape Cod?

Have an opinion? Let it be heard in the comments section of the blog Nuclear energy, Immigration & Fixing Shadow financials are the latest topics – but anything goes.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

From Monday – “Sell in May and stay away” an old Wall Street saying.

This is the third or fourth “Distribution” day for major US indexes. Distribution = big, increased, above average volume associated with a major (biggest since 2/4) selling day. Technically 3D days (a pun) is about as big a signal of a market reversal there is, especially when rally days have so little volume. = BEARISH

Technically almost every analyst sees two major obstacles – We reached a “Fibonacci retracement number for the benchmark S&P 500. and US markets are at the place they were before the Lehman Brothers meltdown sparked the massive selloff. = Bearish

This added to a roller coster markets (up, down, up, down), which usually indicates a top has the boys and girls who live by technical analysis running for cover. = Bearish

Lots of analysts specifically  blamed yesterdays massive selling on Greeks who protested austerity measures as conditions for loans. They like most American want to see the Greek bankers pay more. The demonstration was the small picture. Markets selling off so much on this relatively minor news = Bearish

The real problem is in all the PIIGS in Europe got nailed when their bank, like ours were got over leveraged. There are other causes but  over leveraged loans have played a huge role across the world = Bearish

The Dollar (see below) is a major fundamental problem to recovery. As the dollar moves higher two negative factors come into play

• Oil prices, tied to dollar, also move higher. May & June historically have been period oil prices increase before summer driving season.
• US exports cost more abroad, because the dollar is more expensive and this cuts profits. = Bearish

Analysis - Big red bear paw prints all over the place. (see above) This time a low volume rally is probably just not going to cut it and traders will sell into the rally.

About the best hope to stem the tide is improvement in the employment numbers on Thursday. We also have a strong earnings season = Bullish

However, What Investors see, impacting those strong earnings is

• Higher gas prices
• Higher costs to export goods
• Continuation of European debt problem
• No solution American shadow banking problems.

Perhaps we will get a weak volume rebound today.  However these weak volume rebounds are on very thin ice when traders see such massive volume behind sell offs. So the roller coaster ride is probably going to finish where many coasters do – down from the top.

1168+ The 50 DMA & 1150+ (an old high) are two major support levels on the benchmark S&P 500 now at 1173.60

Significant Indexes

• McClellan Oscillator fell dramatically  to -46.43 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. – The MO broke through a strong support level at -33 support level. Breaking down through support almost always means there is more downside to come.  However support levels do put up resistance to further falls.
• US Dollar – Had a HUGE breakout and was up +1.16% yesterday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important Dollar closed at $83.83. The breakout of the trading pattern to a new high for the dollar focus almost all eyes on the growing value of the US dollar. Rising dollar almost always = falling stocks. The dollar is rising and falling because of the fluctuations in European currencies = Greek debt.

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) - These are positions I actually own

Caution – From Monday -The stocks in  YOUR Stock list are especially vulnerable to a sharp correction in the market.

Caution – From Tuesday- More and more US equities are looking like they have reached at least a short term high.  The jobs report on Thursday is critical to advancing markets.

Long Term Outlook – In anticipation of the S&P 500 (click on link to chart at side of blog) breaking through its 50 DMA the long term outlook is going to get downgraded to NEUTRAL.  This may be jumping the gun,but the momentum is with the bears.

YOUR Stock List from last Tuesday. Right now because all stocks could be taking a major correction it is far more significant to focus on the  BIG PICTURE than individual stocks.

Yesterday Investors sold 1/2 of its EWZ position (Brazil) that was bought  many months ago for a profit. The last 1/2 is down from where it was bought. This leaves Investors411 with under 10% position in stocks. (See positions section) Holding onto long term positions in IMAX & ESRX

The good news is as the McClellan Oscillator falls (especially below -60 = Oversold) Investors411 will start buying/nibbling again. Hopefully, more on this tomorrow. What too look for are stocks bucking the trend. (more tomorrow)

Note 2/4 was the last time we had a bigger than yesterday’s sell off and that’s 7 days before Investors411 started to buy. – We all had a good run then. Let’s hope the same pattern sets up.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Election Day

Its election day in my home town and as some of you know both my wife and I are elected officials. Although we are not running we have friends who we support that are.  Sorry no blog this AM. Check out the comments section as there always seems to be a lively debate going on.  Will try to post more in the PM

Caution – More and more US equities are looking like they have reached at least a short term high.  The jobs report on Thursday is critical to advancing markets.

Barr

NYT’s Frank Rich

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Immigration

Once again the NYT’s Frank Rich has topped the list of editorials on the Arizona immigration laws that is causing outrage across the country. If only Arizona Were The Real Problem Some points

• The show me your papers law in Arizona is certainly reminiscent of having those who look Jewish in Germany having to show their papers.
• There has been such outrage over this that Major League baseball is considering pulling its All Star game from Arizona
• Directly after passing this legislation all Arizona Republican’s also voted that an American President must show his birth certificate. (Bithers – directed at Obama)
• Where is the virtually all white Tea Party on this?  They hate big intrusive government. Strangely the hypocrites are silent.
• There are some Republicans like Tom Ridge, Jeb Bush and others fighting back against this.

Combine this with Popeye’s documented comments of the 1,000,000 people now praying for Obama’s death.

Immigration is the next topic that Congress is going to focus on.

Oil Disaster

There have been 22 comments from Friday’s Oil Disaster/Financial Fraud’s post. You can check them all out by clicking on the blue Oil Disaster & Financial Fraud under any (the latest) of the posts and scrolling down on the next screen.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Stocks took it on the chin Friday in increased, above average volume. (Volume on the NASDQ was slightly lower) = Bearish

“Sell in May and stay away” is an old Wall Street saying. Will have to do research into validity, but it been said so many times it does spook investors.

The big swings up one day and down the next is usually the indication of reversal of trend.  Therefore, a least a short term top. = Bearish

Would be very concerned if we had a “follow through” day. The day after a big swing in one direction – in this case down- acts as a confirmation factor.

We have come to some resolution on the Greek debt problem – austerity measures in Greece and loans from IMF & European Union. = Bullish

United & Continental airlines have merged. They call it “merger Monday” = Bullish

Hard to see oil spill in Gulf as negative for markets. Thousands and thousands of working rigs and one thing happens to one rig = Bearish

Here’s a summary of what will influence markets this week from Seeking Alpha Big news for the week is monthly employment numbers on Thursday. Some news on China cooling down.

Fearless Forecast Last Week –  ”Up Week” This was wrong we were down.  All fundamental reasons two weeks ago – Greece, GS, Financial Reform seemed to spook investors this week. Paul R sent an email mentioning the chip stocks took it on the chin Friday (down over -4%) on oversupply issues.

Fearless Forecast This Week – Getting the fundamental issues right but the timing wrong. Honestly, have little idea of how employment numbers are going to go Thursday. Best read of the tea leaves is a rebound early as Senate dithers on financial reform, but jobs number holds the key. Best guess is we are due at least for some sort o dip. – down week.

Significant Indexes

• McClellan Oscillator fell dramatically  to -32.05 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is the third time the MO has fallen to the -33 support level. Breaking down through support would mean there is more downside to come.  However support levels do put up resistance to further falls.
• US Dollar – fell -0.22% Friday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important  Dollar closed at $81.83. The breakout of the trading range lasted one day  and the USD has fallen back from its new high into its old trading range. Rising dollar almost always = falling stocks. The dollar is rising and falling because of the fluctuations in European currencies = Greek debt.

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) - These are positions I actually own

Waiting on the MO to reach -60 before any major buy are made.  Looking for a dip to enter GLD again.

Caution – The stocks YOUR Stock list are especially vulnerable to a sharp correction in the market.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING