The Results from 2010 and Prediction for 2011

2010

Prediction Week2010, like 2009 was the the year of great recovery for stocks and a continued Great Recession for most working class Americans.

The Great Recovery for equities is seen from the rise of the benchmark S&P 500 from 667 (Spring 2009) to today’s 1257. One of the best editorials on how US equities have been manipulated higher can be found here This does need some filling in and further explanation but it shows one major way stocks have been manipulated higher.

The Great Recession for working class Americans.

  • Even though unemployment rate has fallen from  -750,000 jobs a month to about +50,000 the rate remains at 9.8%
  • The vast majority (3/4) of Americans still believe we are in a recession
  • Systemic problems due to globalization & politics exist in the USA.

Jim J has sent in an outstanding short 2 minute video video – Trends in Income Inequality (see comments section.)

The simple reality is we are breaking apart into two different Americas – A wealthy plutocracy/oligarchy class and the working and non working poorer class.

Sorry will edit this further later today – Have to snow blow this AM

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!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Index Percentage Volume
Dow +0.12% down
NASDQ -0.22% down
S&P 500 -0.16% down
Russell 2000 -0.21% -

Technicals, Fundamentals & Analysis

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

  • Ultra light holiday volume and markets went nowhere.
  • China had a “surprise” +0.25% rise in interest rates over weekend = Bearish for commodities and stocks today.
  • Outlook for the week form Seeking Alpha
  • 74.4% of the time the light volume last week of the year is positive. Trouble here is we’ve already had a great month.
  • Holiday sales are going to be what investors are interested in this week.

Significant Shorter Term Forecasting Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar was flat  -0.02%yesterday. = Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets,&  exporting countries]BDI fell another significant amount -1.91% Thursday. BDI is at 1,795 and rapidly approaching its major support at 1700Bearish
  • McClellan Index – (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] fell a bit to +15.46 = Neutral

Reading The Tea Leaves

From Friday – “Dark CloudsNo one went broke taking profits and there are some short and perhaps long term dark clouds on horizon.”

It sure looks like its time for some sort of correction even though this has historically been a good week for stocks. The Chinese rise in interest rates coupled with the fall in the BDI (the late is especially troubling for emerging markets and therefore the world long term). The Chinese rate hike will hurt today, but the BDI is a problem long term.

Bottom Line & Reality = Readers of Investors411 have known for many moons that this is a “manipulated market” Most of the retail investors have left and show no signs of coming back. Our Fed with its low interest rates, QE1 &QE2 plus some other measures has been the mechanism used to more equities higher. In a historically light week of trading their dumping of money, which is scheduled to continue through April will artificially produce buyers.

However, another factor outside the USA that has kept US equities moving higher is emerging markets. They did NOT get over leveraged like the uncontrolled casino capitalism of what we call “free market.” Right now there is a problem in emerging markets. So many new people are finding jobs and their GDP are growing so rapidly that they have to put on the breaks to keep from growing too fast and causing inflation.

Therefore, China raised interest rates.

It will take anywhere from a this AM to a few days for US equities to adjust (fall) to adjust to the news. Then if there is no follow up unexpected event the old low volume melt up should continue.

——

Positions

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

(I do manage 6 accounts that have other positions).

Current ETF Positions. (oldest held positions listed first)

  • EEM - (Emerging Markets ETF) Sold last 1/2 for 46.38 for a +3% profit. Other 1/2 was for +5% profit Total +4%
  • #1 UWM - (2x small cap stocks ETF) – Sold 1/2 for 43.53 for +9% profit
  • #2 UWM
  • EUO – (double short the EURO currency) Bought Friday at 20.76

Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including “YOUR Stock List.” (YSL)-

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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