Photo from Politico of all white Tea Party activists – Queston should the USA have the same level of tolerance as Saudi Arabia or are we better than that?

Your Comments

Mainstream media (CNN & others)has chosen to give priority to right wing groups that believe we should ban all  mosques in the USA. Yankee Bob has returned to the comments section with a rebuttal -

“Exactly right!

Fear is the Mind Killer! Prejudice is born of ignorance! We fear that which we do not know or understand! Enlightenment is much harder to attain. It’s easy to be afraid of what you don’t know or understand. That’s easy. Seeking the truth is hard!

Think of what prejudice has cost the world. How many Genocides? How many victims of Genocides, Enslavements, Victims of Prejudice  were denied their human rights. What does that mean as a social cost? Suppose Einstein had been murdered  in  a Pogrom before he gave the world his Theories. Suppose he had been denied his eduction because of a quota on student seats for Jews! How many potential Einstein’s were lost at Auswitz? Suppose Drs. Salk were denied becoming Drs because they were Jewish! The Dr that developed the procedure for blood transfusions that has saved the lives of countless millions,died after being in a car crash and was denied a transfusion because he was Black! What if he was in that crash before he developed his discovery. We have lost so much as a society because of the fear that ignorance inspires!”

Yankee Bob

JS has a lot more valuable information on covered calls in the comments section. Also Dave & Jim J (bonds) have some added information Kudos to JS for initiating and leading the discussion on an alternative method of investment

If you don’t watch the comments section each day your missing out on some of the best investment ideas and most passionate editorials.

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!

Technicals, Fundamentals & Analysis

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

Mantra for the month - The Black Box/High Frequency Traders BB/HFT control the majority of trades. Paul R in the comments section has found a great source describing the BB/HFT traders and consequences of what they do.

Weak volume rally is typical US for the BB/HFT.  Although volume did pick up a bit as short positions scrambled to cover. Weaker dollar & rally abroad played a part in this.

NB – The US markets are , for the most part are being engineered by the BB/HFT and now the Fed has taken an even more direct role. Investors411 has beat the drum over the BB/HFT’s, so lets do the FED.

The FED – It was perhaps no accident markets moved higher when the Fed at 10:15 AM EST yesterday opened its window to start to buy Treasuries. Lower treasury rates pushes investors seeking higher yields into stocks. More important Zerohedge.com does a good job describing what happens when cash is given to potential traders. Future auction that inject cash to major traders will occur 8/19,24,26 & 9/1. So stocks should have an artificial boost on those days. At Zerohedge read anything with symbol POMO – Permanent Open Market Operation.

Bottom Line - You’re not getting the Fed’s money and we could see a little juice added to stock on the above dates. Plus the day before traders may rally in anticipation of new cash.

Cash rich companies are also buying back shares – they certainly are NOT hiring American workers.

Significant Indexes

• The Dollar (USD)  [Anything price move over +/- 0.50 is significant] The dollar fell -0.38% yesterday. For stocks = Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade/proxie for China & emerging markets] Rally +1.09% yesterday. Has broken up through 50 day moving average. Overall trend still = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose to +3.14 = Neutral

Reading Tea Leaves

Emerging markets due for a consolidation after a nice 3/4 day run. MO in neural and the FED injections of cash through 9/1 should keep the nasty Hindenberg Omen at bay at least for a while.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions – EWZ & EWS

Each time we have a MO below 40 and a dip, I plan to buy.  First nibbles and the lower we go the more riskier ETF’s.

Same strategy – Will sell 1/2 ETF at @3 to 5% gain/loss and let the rest ride till the MO moves higher. Sold 1/2 of EWZ at 70.88 for @ +3% gain. Both EWZ & EWS opened and closed near the same levels. In the language of technical analysis this usually means at least a short term trend reversal.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Photo of dead Moslem Freedom Fighters in Stolen Iranian election – Investors411 6/26/09

“Fear Is The Mind Killer”

Frank Herbert’s SF novel Dune was the first place this expression was used.

Fear mongering works especially in politics but it has long lasting and significant consequences.

Back in the 50′s President Eisenhower made a very unpopular decision to support sending a little black girl to an all white school. He sent in the 101 Airborne to protect her. This nation that grew strong because we grew united – all races & religions became more tolerant.

Now The major US news story being fear mongered is the possibility of a Moslem cultural center a few blocks away from the former site of the Twin Towers. Have we all forgot the events of last summer?

On June 21st Investors411 ran the following picture of Moslem Freedom fighter Neda Agha Soltan

How the Fear Mongering Will Spread

• Fear monger advocates in the USA  blame ALL Moslems for the attacks NOT al Quaeda fanatics
• Moslem Jihadist groups like Hezbollah, Hamas, al Qaeda will respond and “say see the USA is not about freedom” as word of the hatred of the Islamic Center in NYC spreads.
• The blood lusting jihadist will hold up the example of the NYC Moslem culture center to all their potential recruits as an example of how ALL Americans hate ALL Moslems.
• Fear mongering right wing polls in the USA will say Hamas, Hezbollah and Ahmadinejad wants a Culture Center. You’re either with them or us.
• And so the fear will grow into a deadly spiral

The fear mongers on both sides will be political winners, and our Military industrial complex (weapons our #1 export and we are 43% to 60% of the worlds military budget) Osama Been Forgotten & company is laughing in his cave at the of thousands of new recruits he will enjoy.

The biggest losers are those who believed this country stood for religious freedom. Not just here but the moderates throughout the Moslem world, especially those moderates like Neda who fought and died on their own or with us in Iran, Iraq, Pakistan, the Sudan or anywhere in the world.

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!

Technicals, Fundamentals & Analysis

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

Mantra for the month - The Black Box/High Frequency Traders BB/HFT control the majority of trades. Paul R in the comments section has found a great source describing the BB/HFT traders and consequences of what they do.

Pitiful volume and flat US market.

Covered Calls

We all owe a debt to JS for an illuminating presentation of a more conservative form of investing.  From the comments section of the blog –

“This is a strategy I use to replace CD’s bonds when rates are extremely low. My goal is to replace the income lost by such low rates. This is NOT a strategy for growth. This is a strategy to severely limit losses.
Example using today’s prices: buy CSCO $21.95; sell a COVERED call for January 2011 at strike price of $17.50. (this means you have sold the right for someone to buy CSCO from you for $17.50 anytime till 3rd Fri in January 2011. You will get $5.00 for selling this option. Why did you do this? Because they paid you a premium above current price for this option: $21.95 minus $5.00 =$16.95 (your net cost of CSCO. Math: 21.95 minus $5.00 =16.95, your net cost. Taken at $17.50 = $.55 profit after 5 months which equals 7.78% year. ( $.55 divided by 5 months =$.11 x 12 [ to get yearly rate] =$1.32 divided by your net cost [$16.95] =7.78%.

Positives: you beat CD rates; you have 20% downside protection (from 21.95 to $16.95). Even with all the fear out there, prices are not highly inflated, so 20% is decent protection.

Remember, this is income part of my portfolio; I’m trying to limit risk as much as possible. CSCO has to go below $16.95 (my net cost) to lose money. You must buy companies that have much cash and won’t go under. Also, after Jan 2011, I can sell another call.

Significant Indexes

• The Dollar (USD)  [Anything price move over +/- 0.50 is significant] The dollar fell -0.50% yesterday. A fall of this magnitude should have translated into a rally in stocks. =
• The Baltic Dry Index (BDI) [measures cost of world trade/proxie for China & emerging markets] Rally +0.81% yesterday. Has broken up through 50 day moving average. But upside momentum slowing shows possible trend reversal. Overall trend still = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose to -26.12 = Neutral

Reading Tea Leaves

You have both the dollar dropping significantly and most emerging markets in the third day of a rally. Yet US stocks have failed to move.

Somethings got to give. – Rally Ho. – Perhaps its short term, but it could be a sharp rally as short positions caught off guard. Remember I’m reading tea leaves.

NB – This rally is dominated by BB/HFT traders.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions – EWZ & EWS

Bought  small positions yesterday in EWZ (Brazil) at 69.00  & EWS (Singapore) at 11.99

Will add resource rich Australia EWA in list of ETF’s

Each time we have a MO below 40 and a dip, I plan to buy.  First nibbles and the lower we go the more riskier ETF’s.

Same strategy – Will sell 1/2 ETF at @3 to 5% gain/loss and let the rest ride till the MO moves higher.

Long Term Outlook - NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

See Stocks Below for Hindenburg Omen

Pakistan Disaster

“The magnitude of the problem; the world has never seen such a disaster. It’s much beyond anybody’s imagination,” – Pakistan flood where over 7 million are homeless UN President Ki-Moon.

When Bush/Americans sent Tsunami relief to Indonesia American popularity soared. Today America has far better relationship with the world’s largest Muslim democracy. Indonesia is not without problems, but it’s a whole hell of a lot harder to Islamic Jihadist to recruit where the population is pro American rather than one that hates Americans.

Someone is going to step into the vacuum created by Pakistan’s economic disaster in the world’s second largest Muslim country and  Democracy (@170 million people) Will it be the Islamic Jihadist’s or Americans? Obviously, right wing politicians are absorbed with trying to limit religious freedoms of all Muslims and fear monger political advantage. Its hard to be tollerant when so many on all sides are shouting hatred and fear. Also many of you want the $ to stay at home (unemployment and/or the deficit)

In this case not only will you be helping those in need, but you’ll also make it a whole hell of a lot harder for the lunatic Islamic jihadist to gain support. Here’s a list of places you can donate or simply donate by texting “SWAT” to 50555 to donate $10

Bombing Iran

Intrade puts the odds of the US or Israel bombing Iran at @22% by the end of 2011. Atlantic’s Jeffery Goldberg says odds are much higher (50+%) & In Asian Times Gareth Porter says Goldberg’s wrong.

Investment Bottom Line –  Stocks would obviously take a huge hit on this event.

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!

Technicals, Fundamentals & Analysis

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

Mantra for the month - The Black Box/High Frequency Traders BB/HFT control the majority of trades. Paul R in the comments section has found a great source describing the BB/HFT traders and consequences of what they do.

Emerging Markets [EEM] turned positive on Friday while US Indexes took a hit in extremely low volume. Emerging markets are once agin outperforming major US indexes and the trades/country ETF’s that Investors411 has used seems to be working again. = Bullish

If you look at the DOW Transports (Friday -0.83) instead of Dow Industrials (-o.16) you’ll find even a gloomy senerio than in last week’s losses. = Bearish

The Hindenburg Omen

Named after the blimp that crashed in 1937, The Hindenburg Omen, is a somewhat accurate predictor technical analysts use to forecast a market crash using the McClellan Oscillator. The WSJ and many other financial outlets picked up on the fact that we had a Hindenburg Omen last week. Here’s the bottom line from the above Wikipedia source. Within the next 40 days the chances of the following happen (using back testing) are -

• a 5% loss = 77%
• panic sellout = 41% & stock crash = 24%
• every NYSE crash since 1985 has been preceded by a Hindenburg Omen

Since we just had Friday the 13th, September is historically the worst month for stocks, you know how susceptible American’s are to fear mongering, I thought I’d let you know what’s in the back of the minds of every technical analyst including those who run the BB/HFT’s.

Significant Indexes

• The Dollar (USD)  [Anything price move over +/- 0.50 is significant] The dollar rose +0.38% Friday. This confirmed Dollar on a week long bull run. For US stocks = Bearish
• The Baltic Dry Index (BDI) [measures cost of world trade/proxie for China & emerging markets] Rally +1.27% Friday. Has broken up through 50 day moving average. But upside momentum slowing shows possible trend reversal. Overall trend still = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO fell to -40.98 Approaching oversold, but still = Neutral

Reading Tea Leaves

No mater what help we get from emerging markets, the dollar is still key to stock prices and  has shown no signs of slowing down. Closest resistance level is about $1.00 away (50DMA). Monday’s recently have been the best day of the week and Chinese markets were up +2.11% overnight.

However, dollar bulls & stock bears rule,  the MO has yet to reach -60, and the BDI rally is slowing down. Bulls seem safely locked in the corral.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions - NONE

NB – The whole Positions Section was updated over the weekend. (see top of blog of link here.) I’ve listed many emerging market and foreign ETF’s with links that are again outperforming US markets. Also, references to ETF’s that do +/- 2 & 3 time US indexes and links to YOUR stock list.

More aggressive traders could start to buy/nibble the dip. Longer term investors may want to wait for stocks to move lower. The MO is at -41 and ideally you’d like to see at least -60 before buying. It has reach @-120 in the past. None of these figures are written in stone.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

-

Crunch Time/Elizabeth Warren

Perhaps the best result of the Financial Reform Legislation could be  a strong Consumer Protection Agency. Over the past few years Investors411 has beat the drums for the stand and policies of Elizabeth Warren. She would be an ideal choice for the agency, but has strong opposition from influential Senators like Democrat Chris Dodd (He approved the big financial bonuses for bailout TARP shadow banks) WaPo thinks there is good shot she will get the job.

Matt Taibbi

The Rolling Stone’s Matt Taibbi has an excellent editorial on “Wall Street’s Big Win.” The win, of course, is the new financial reform package that became law. Taibbi nails Republicans and Democrats (including Dodd) who gutted financial reform legislation.

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!

Technicals, Fundamentals & Analysis

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

Mantra for the month - The Black Box/High Frequency Traders BB/HFT control the majority of trades. Paul R in the comments section has found a great source describing the BB/HFT traders and consequences of what they do.

Individual companies may be doing well, but earnings season is basically over. The focus now turns to economic news and from China to the USA (talk of GDP growth being revised down in USA from 2.4 to 0.2 in 2nd quarter) the news has not made investors happy.  We’re not falling over the cliff, but even the BB/HFT traders need some series of economic fundamentals to hang their hats on.

Therefore, don’t see bulls getting out of the corral until the market becomes more oversold.

Same story of bigger volume on down days that has been the hallmark of US indexes for many moons.

Significant Indexes

• The Dollar (USD)  [Anything price move over +/- 0.50 is significant] The dollar rose 0.42% yesterday. This confirmed a massive +1.84% move the day before. Very bullish for the dollar but for stocks = Bearish
• The Baltic Dry Index (BDI) [measures cost of world trade/proxie for China & emerging markets] Rally +2.48% yesterday. Has broken up through 50 day moving average & upside momentum slowing. Overall trend  = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO fell to -38.98 Approaching oversold, but still = Neutral

Reading Tea Leaves

The dollar is the key index to watch. The larger currency market is almost  dictating what happens to US stocks. You can follow (or invest) in it by watching the dollar bull ETF – ticker symbol UUP. If UUP goes up, stocks go down and visa versa.

The dollar closed at $82.64 and the first significant resistance level is the 50 day moving average at $84.06 ( 50 dma is falling each day). So there is a ways to go before we reach this point.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions - NONE

From earlier this week - “The Bulls seem to be loosing control.” The MO has fallen to -39 & we are approaching the -60 oversold level.  The lower the MO goes the better the chances whatever long position you take has of making at least short term gains.

A number of you have asked or are investing in stocks with high dividends.  This gives you a second revenue stream – the dividend that is in some cases higher than what you can get in CD’s. The problem of course is will the stock go up or down. Here a list of top ten dividend stocks from an author in at Seeking Alpha.

FXI, EWZ, EEM, EWY, & EWS are the courty ETF’s recommened for consideration when conditions are appropriate. Also GLD on dips.

Also considered are ETF’s that mirror or do 2 or 3 times what major indexes do.

YOUR Stock List last generated on this date (scroll down) Have not gone over these recently.

More agressive traders could start to buy the dip. Longer term investors may want to wait for stocks to move lower.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

45 Park Place NYC – Former Coat Store

Burlington Coat Store

It seems American media has one again spun, hyped, fear mongered & distorted facts to create a monster controversy. Building a Moslem Culture Center at the Burlington Coat Factory Store (45 Park Pace) building near the former Twin Towers has become Building a Mosque at Ground Zero or “Sacred Ground” (Newsweek Headline)

Now across the country this outrage has spread to protest building of ANY Mosque for the 6 to 10 million American Moslems.  This makes sense to the growing numbers of bigots in America. Why not, there are those that believe no Catholic Churches should be built because it is a religion of terrorist child molesting priests.

If winning the war against the lunatic jihadists who attacked us on 911 shown anything, it is that we must separate them from the moderate Moslems (the 6 to 10 million in the USA alone)  - almost all of whom are not Al Qaeda terrorists. Obama, General Petraeus and even George Bush realized this and developed appropriate strategies to divide the terrorists from the moderate Muslims.

Our American bigots want to lump all Moslem’s together Remember Neda heroic death protesting the brutal Iranian dictators?

Moslem’s/Neda did not attack us on 911. It was a group of vicious, fanatical, insane terrorists from al Quaeda. The answer to defeating these terrorist is NOT to devolve into the same kinds of beliefs and intolerance they and others like them have.  If we as American’s cave in to the bigots then Osama Been Forgotten has truly won.

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!

Technicals, Fundamentals & Analysis

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

Mantra for the month – The Black Box/High Frequency Traders BB/HFT control the majority of trades. Paul R in the comments section has found a great source describing the BB/HFT traders and consequences of what they do.

O.M.G. Another day in the world of BB/HFT trading.

Even though Investors411 stated yesterday “the bulls seem to be loosing control” – Cowabunga - what happened? Collectively the dollar opened up an unheard of +1.80% and stayed their. (You can follow this by using often mentioned dollar ETF – UUP) Didn’t see that dollar move coming.

Your average investors have flocked to low yield bonds and are huddled their under the table. Some braver investors have chosen high dividend stocks – They got burned yesterday, but they should be more successful than your average stock holders in the long run.

The reason for the massive selling in moderate/average volume - ???? – There was no news out there that didn’t seem already built into most investors consciousness.

• The FED suggesting the US economy is shaky – We all know that.
• China slowdown. This is a planned slowdown as their stimulus funds have run their course and their worried about overheating GDP.
• Yes, there is a lot of vacant buildings in China and a housing bubble building, but there is also 10′s of millions of new members to China’s middle class each year.

Significant Indexes

• The Dollar (USD) had a OMG rally yesterday. [Anything over +/- 0.50 is significant] USD up a massive +1.84%. Don’t ever remember such a huge move. For stocks = Bearish
• The Baltic Dry Index (BDI) [measures cost of world trade/proxie for China & emerging markets] kept starting to go parabolic (+7.50% yesterday) Prices starting to go parabolic are a Danger sign but still = Bullish
• McClellan Index – (MO) [Basically longer term  - the rough guideline is over +60 = overbought market = sell or short stocks & -60 = oversold market = buy stocks.] MO fell to -32.95 Approaching oversold,but still = Neutral

Reading Tea Leaves

Welcome to the world of BB/HFT trading/investing - Jsovajani in his last comment states right now  ”the most important concept is capital preservation” and many of you bemoan the fact that Investors411 has not plunged into stocks this year like it has in the past. = capital preservation.

The good news – Our +/- 60 level on the MO has clearly become a fairly decent forecasting toll of when the BB/HFT will turn (see chart). Investors411 is going to stay and expand on this strategy. But we all need to have patience (including me) till the time is right to invest and to realize that its probably NOT going to be a long term investment, but one that lasts a couple months, weeks or days.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions – NONE

• EWZ (Brazil – Now 0% of portfolio position) Bought at 69.80. Sold last 1/2 at 69.03 for -1% loss First 1/2 sold at +2% profit.

From yesterday – “The Bulls seem to be loosing control.” They lost it. “Perhaps the MO will drop low enough to consider buying again.” At -33 on the MO we are approaching the -60 oversold level

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Lights Going Out Across America

NYT’s/Princeton Nobel prize winning Paul Krugman editorial certainly not a rosy forecast.

This is My Lucky Day

Great Video sent in by E.R. Enjoy! Also from same site totally different but entertaining video from flixxy.com

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!

Technicals, Fundamentals & Analysis

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

Same Mantra for the month -The Black Box/High Frequency Traders BB/HFT control the majority of trades. Paul R in the comments section has found a great source describing the BB/HFT traders and consequences of what they do.

Here’s a look ahead for Wednesday market.

The big news out of yesterday was the Fed meeting and suggesting Long Term Interest Rates can go even lower. That’s bullish for stocks.

Significant Indexes

• The Dollar had a huge rally but ended the day up only +0.11%. Rally (+0.85% higher) that collapses is usually bad news for dollar and good news for stocks , but we are still holding support.= Neutral/Bullish
• The Baltic Dry Index (BDI) kept accelerating its move  higher (+4.64%) = Bullish
• McClellan Index – (MO) [Basically longer term  - the rough guideline is over +60 = overbought market = sell or short stocks & -60 = oversold market = buy stocks.] MO fell to +7.68 = Neutral

Reading Tea Leaves

The BB/HFT traders because of their size, scope, & frequency are creating correlations across diverse markets. They trade futures in currency, commodities, stocks and other markets.  What this has done is create a greater unity in these markets. One prime example is the dollar going down for a few days almost always means stocks will go up.

While normal investors or traders can’t match the speed or size of the BB/HFT’s, the simple advantage we have, is we can watch their direction. Because of their big size hey leave footprints/trends.  Simply follow the trend.

Longer term – What’s growing the fastest is emerging markets and the US companies that export to them. If the dollar keeps falling, US exports will cost less and US stocks will grow.

Short Term – Nothing goes up or down in a straight line. There’s problems out there from a phony opaque financial system in the US to an overheated housing bubble in China. At sometime major problems like the two examples or others make noise and markets tumble.

The three indexes above are guideposts to what’s happening or will happen. Right now the major fight is over a key resistance/support level of the dollar and it looks like the dollar bears might win. This would be good news for stock bulls.

Our key forecasting tool is the MO is in Neutral. This gives us “wiggle room” both on the up and downside.(see above)

However, despite some potential good news in BDI & dollar, when you look at the chart of the MO you’ll see a series of lower highs and lower lows. This is NOT good. For those who know more about technical analysis the MO has also broken down through a “head and shoulders” pattern. Again NOT good.

Therefore, despite some encouraging news in the dollar & the BDI it looks like in short term we are heading lower.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions .

• EWZ (Brazil – Now 5% of portfolio position) Bought at 69.80. Currently at 70.50. Considering selling remainder.
• TYH (3x technology – 2% of portfolio position) Bought at 31.76 Sold yesterday at 31.08  for -2% loss

Mea Culpa – Investors411 has brought this up a handful of times yet failed to take action each time its happened. Buy GLD on dips.

The Bulls seem to be loosing control and the MO is in the middle of neutral territory.  Perhaps the MO will drop low enough to consider buying again.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

-

The China Trend

Pew Dec 9th 2009 poll showed American’s believe China is more powerful economically than the USA. 44% of Americans believe China is “larger economically.” It’s NOT, by a wide margin, but its growing a whole lot faster.

Perception is often far more influential than reality. Threat’s why our culture spins & manufactures the news instead of reporting it. Bottom line here is China sneezes and the rest of the world will catch a cold. They used to say this about the USA, but times are changing.

There is one major problem in China’s future and that is when will China’s housing bubble burst? When this happens everything from politics to economics across the world will take a hit.

The good news is there has not been shadow bank massive over leveraging of China’s housing problem.

The bad news is 65 million new vacant apartments and the above housing graph. For more see this LINK

Bottom Line – When this bubble bursts everything from stocks, politics, employment, to even your houses value will feel the impact.  This is the #1 DANGER WILL ROBINSON, DANGER DANGER that hangs over the world’s economy today. You could argue that  a phony opaque financial system is a bigger bubble, but that’s hidden from the perception of most Americans.

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!

Technicals, Fundamentals & Analysis

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

Same Mantra for the month -The Black Box/High Frequency Traders BB/HFT control the majority of trades. Paul R in the comments section has found a great source describing the BB/HFT traders and consequences of what they do.

“Stock futures retreated Tuesday (today) as investors grew a little more cautious ahead of the Federal Reserve’s meeting and after China’s economy showed some signs of slowing down.” – from AP

If your an Investors411 reader, you know the BDI dropped 60% over the last 3 months – Of course China’s imports dropped. However we have seen a recovery over the last two weeks in the BDI.

Significant Indexes

• The Dollar rose a heathy +0.38% on Friday. Now sitting again directly on its support level = Neutral
• The Baltic Dry Index (BDI) is accelerated its move  higher = Bullish
• McClellan Index – (MO) Check out the link to the new chart. Lots more data. [Basically longer term  - the rough guideline is over +60 = overbought market = sell or short stocks & -60 = oversold market = buy stocks.] MO rose to +40.12 = Neutral

Reading Tea Leaves

From Yesterday – “There is a 5 week bullish trend. Benchmark S&P 500 at 1121 and every stock analyst watching the resistance levels around 1130.”  Yesterday the S&P closed at 1127.79.

Yesterday was “Magic Monday” where the breakout was supposed to happen. It didn’t and that’s probably going to make the BB/HFT traders anxious.  We tested the 1130 SPX number and the Bearish algorithms of the BB/HFT’s kicked in.

May be wrong, but yesterday sure looked like a day that the bulls legs got weary.

I’ve mentioned “wiggle room” for the MO in the past week or so of up dates. This exists still on the upside, but it comes more into play if the bulls are in charge. The distance to the downside (-60 is a lot further away than +6o) for the MO at +40.12 is far greater

Short term traders who are experienced could trade the wiggle room, but long term investors simply wait for an MO below -60. Be patient it will come.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions .

• EWZ (Brazil – 10% of portfolio position) Bought at 69.80. Currently at 71.12. – 3 times its been up close to 4% in the last few trading days, but has failed to make the 5% profit figure originally projected to take profits. Sold 1/2 for 71.22 yesterday for a measly +2% profit. There is still some hope of building the remaining EWZ into a long term position, but its fading.
• TYH (3x technology – 2% of portfolio position) Bought at 31.76 Currently at 32.26 Considering selling this position ASAP

In trading, one major key is to cut any potential loss and let your winners ride.

Long Term Outlook - NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Jolly Green Giant

No one brings out the venom and praise in the comments section of the blog like Alan Greenspan. Well, he’s done it again. The decades long Republican Liberation has staked out his economic position to the left of Obama (Something not very hard to do)

But this time its dramatic – Greenspan’s called for the elimination of ALL the Bush tax cuts on everyone not just the wealthy (Obama’s Position).

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!

Technicals, Fundamentals & Analysis

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

Same Mantra for this week -The Black Box/High Frequency Traders BB/HFT control the majority of trades. Paul R in the comments section has found a great source describing the BB/HFT traders and consequences of what they do.

Significant Indexes

• The Dollar fell a significant -0.52% on Friday. It also broke a support level (200 day moving average) = Bullish
• The Baltic Dry Index (BDI) is back moving higher = Bullish
• McClellan Index – (MO) Check out the link to the new chart. Lots more data. Basically the rough guideline of over =60 = overbought market = sell or short stocks & -60 = oversold market = buy stocks. MO dropped to +25.52

Reading Tea Leaves

There is a 5 week bullish trend. Benchmark S&P 500 at 1121 and every stock analyst watching the resistance levels around 1130. The dollar is dropping like a rock, and the BDI is moving back up.  The dollar is closely watched by the BB/HFT’s. The market moved higher into the close and Monday’s are usually the day of the week that stocks have performed best.

The MO at +25.52 is neutral, but I’ve talked about “wiggle room” or in a move that extends higher for a few weeks the difference between 60 & 26 = 34 Or the difference between an old recent high 97 & 26 = 61.

So best read of tea leaves is markets are going to make an attempt at breaking through major resistance at @SPX 1130.

As suggested by many of you I’m going to try to get more of the “basics” down in the other sections (heading at top) of the blog this week.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current long positions EWZ & TYH (TYH is for higher risk short term traders not investors) Same sell 1/2 on @5% gain. Both are up a @2% since bought last week.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Iraq

The USA is pulling combat troop out of Iraq by end of August & only 50,000 to remain. “No combat troops will remain.”

So without the bells, whistles, victory celebrations we’re kind of  leaving Iraq. Like Osama Been Forgotten, Iraq Been Forgotten. Here’s what remains.

• The Sunni’s got toasted in the civil war and there are still probably millions of refugees in Jordan, Syria, & Iraq
• There has been NO resolution of an elected government in Iraq for 5 months. Two leading sides each have @ 90 members of a @350 member parliament.
• American’s & Saudi’s back Allawi faction. Iran backs Maliki (current PM) faction.
• Kingmaker seems to be Sadr (actively courted by all) who fought Americans and hid out in Iran. Sadr likes Maliki’s side but hates him because he imprisoned his followers.
• All that oil, everyone own a gun, religious hatred/killings and huge amounts of corruption. Not a good mix.
• July was deadliest month in two years according to Iraq government. But this is still down from 2008 levels.

Reasonable to assume as US withdraws and no or a weak governing majority formed - violence will grow. If the Allawi faction gains power the Iraqi dinar could pop higher.  Obviously great risk here. But where there is great risk there is great gain.

Best place to go for more is Informed Comment blog.(scroll down)

For the US this obviously was an oil war (the peak oil mega trend). It is in the US interest, and that of all the corrupt officials no matter what side they are on, to keep the oil/money flowing. However the hatred is very very deep and religious between Sunni’s & Shia. The other major group – Kurds want the same oil that the Sunni’s claim. This is all very very confusing and I could go on & on.

Bottom Line – Dinar pops on Allawi taking over (most likely winner because Saudi’s & Americans will fix it for him) Then you have a power vacuum with US leaving and all those guns, hatred, and money/oil. Violence already growing and the kingmaker is the most radical Shia religious leader (Sadr) in Iraq. Not a pretty picture.

So if you love great risk buy now on the hope of Allawi forming a government. But I’d sell into Allawi taking power because American’s don’t want to go back.

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!

Technicals, Fundamentals & Analysis

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

Same Mantra for this week -The Black Box/High Frequency Traders BB/HFT control the vast majority of trades.

Last big week for earnings reports.

Significant Indexes-

• McClellan Oscillator (MO) fell  to +42.72 over the last few days [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. A minor price fall ( yesterday’s -38 Dow points) creates a major 24 point move on the MO vs. a major gain (Monday’s +200 Dow points) creating almost the same move higher. When the MO falls 24 points on such a small loss its usually bullish. Again “wiggle room” has opened up for the MO to go higher – High two weeks ago 90 minus 42,.72 = @ 47 points or wiggle room for bulls. NEUTRAL
• US Dollar –  The dollar  fell  -0.43% yesterday [Anything over +/- @0.50 is significant.] The dollar/stocks relationship is strong – Dollar up = stocks down and visa versa. Dollar  is in a two month long fall and is divectly above a major support level.(its 200 Day Moving Average – see chart) The fall for stocks = Bullish
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also, good proxy of China.) BDI was in free fall from a high of @4200 to 1700 . This was a huge -60% drop in 8 weeks is very bearish Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI has staged a two week rally and is up +17% rally and is at 1977 Monday. Yesterday the BDI fell slightly to 1964. We’d have to break support at 1700 to turn really bearish or go back up above 1977 to turn bullish = Neutral

Reading Tea Leaves-

Investors purposefully chooses the three indexes that have perhaps the most significant impact on the market. They all measure different areas. Here’s the BASICS

The McCellan Oscillator -MO BASICS (see above)

• The MO measures if the market is oversold or overbought.
• It does NOT use volume to caluculate this (see above)
• The BB/HFT traders are making day and swing tardes that almost ignor old technical rules like volume as a confirmation of a market move.

The BDI – BASICS (see above)

• Measure costs to ship goods worldwide.
• Transparent figure – Unlike many economic figures – think shadow banks.
• Without exports/inports our globalized economic structure collapses.
• Lower prices = less goods shipped. Higher prices = more goods shipped & good for stocks.

The Dollar – BASICS (see above)

• The BB/HFT pay close attention to what the dollar does.
• Currency markets dwarf stock markets.
• When the dollar falls it means all those companies that export US goods will make more profits and markets will move higher. (& visa versa)

Analysis –

The US Dollar is in a two month free fall. (see below) . Today’s a big day because the dollar’s price is right on its 200 Day Moving Average. It certainly looks like the 200DMA support level is going to fall and therefore stocks will move higher. If you want to track (or invest) in dollar daily see UUP (Dollar Bullish index) This is where the action is.

Bulls are still in charge of mid term trend and we have more “wiggle room.”

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

EWZ is the only long position at this time. Will sell 50% at 5% gain or if it returns to the price it was bought for.

Interested in buying more (ETF’s based on major US indexes) on any further dip. Especially a dip in stock prices as the dollar rises like yesterday.

YOUR Stock List

BIDU, AAPL, SNDK, PCLN , F, CREE (8/10), SAM , GMCR, HMIN (8/10), SWKS, RADS (8/5), SKX, VCI, UFS, IMAX, UPS.

Paul R has posted some information on some of these stocks – see comments section of blog. Will get to in depth analysis next week.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Heritage School House

Back To Basics

At the top of the Investors411 blog are 5 different categories [HOME PAGE, HELP/EDITOR, STRATEGY, POSITIONS   & OVERVIEW] These are designed to help you access more information and describe the basic viewpoint of this blog.

Investors411 follows mega trends and how they influence stocks, politics and your lives. See yesterday’s blog as an example of how megatrends influenced solving a 30% of GDP deficit after the World War 2 and how a different set are hindering a solution to our 10% of GDP deficit now.

The world of the stock market has changed. In 2008 Investors411 clearly stated that the financial meltdown would have a “far, far, far, far, far” bigger impact than expected. It obviously has and will continue to do so.

Here’s the Good News - The 2008 meltdown threw global trends for a loop. But over the course of the last two months, technically, the same country stock patterns have reappeared. Old favorites like EWZ, FXI, EWY (S. Korea – 21% of exports to China vs only 10% to USA) have and are outperforming the US indexes again. Check these out by using the charts at the side of blog.

Led by Paul R and others in the comment section lists of individual stocks that may benefit from these and other mega trends are published and commented on.  See Positions below.

What’s Different – The Black Box/High Frequency Traders BB/HFT control the vast majority of trades. (50 to 80% on a given day) The vast majority of these are day or swing trades. They are NOT focused on historical long term technical analysis because they are short term traders that can swing either way (long or short) In the end fundamentals will catch up with them, but remember “the markets can stay irrational longer than you can stay solvent.” (Wish I knew the author of that statement)

Here’s the Bad News – We haven’t fixed our opaque shadow bank financial system. Neither has Europe. We have enormous future problems that will create more debt – military spending, social security, medicare. We have a fractured, less transparent political system and a media that plays to fear mongering and bias. I’m sure YOU could add to this list, but let’s end with this. Emerging market countries are providing a greater chance for upward mobility for their citizens than the USA

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!

Technicals, Fundamentals & Analysis

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

Same Mantra for this week -The Black Box/High Frequency Traders BB/HFT control the vast majority of trades.

Stocks continue their Black Box rally in typically light, decreased volume.

The McCellan Oscillator – This is currently our #1 top forecasting toll for when the market will turn.

Significant Indexes-

• McClellan Oscillator (MO) rose  to +66.40 over the last few days [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. Even though the MO is in overbought (sell) territory, but it reached over 90 a few days ago. It could easily reach 90+ again before consolidating or making a significant fall. = Neutral
• US Dollar –  The dollar  fell significantly -0.74% yesterday [Anything over +/- @0.50 is significant.] The dollar/stocks relationship is strong – Dollar up = stocks down and visa versa. Dollar  is in a two month long fall and is approaching a major support level. The fall = Bullish
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also, good proxy of China.) BDI was in free fall from a high of @4200 to 1700 . This was a huge -60% drop in 8 weeks is very bearish Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI has staged a two week rally and is up +17% rally and is at 1977. Rate of increase decreased yesterday. That’s not bullish, but the 17% rise is = Bullish

Reading Tea Leaves-

We’re back to Magic Monday’s where the BB/HFT take the markets higher in lower volume.  This means we could see a rally on Friday as traders hope for another magic Monday.  There is still wiggle room in the MO (90-66 = 24 points) for the markets to go higher before becoming too oversold they have to retreat. Remember these numbers are NOT exact and a rough approximations.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

EWZ is the only long position at this time. Will sell 50% at 5% gain.

Sorry don’t have time  to go over these in depth, but they all seem to be worthy buy the dip candidates.(IMAX now questionable). But here’s YOUR Stock List (Mostly a list of the stocks YOU sent in) Both Paul & I have gone over these stocks. He has provided their earnings report dates of those that have not yet reported this quarter. Holding a stock into earnings is an obvious risk.

BIDU, AAPL, SNDK, PCLN (today), F, CREE (8/10), SAM (today), GMCR, HMIN (8/10), SWKS, RADS (8/5), SKX, VCI, UFS, IMAX, UPS.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!