Penryn will debut in some 20 versions: Intel boss Paul Otellini shows the 'Extreme Waffleboard' edition which can be used to provide music for Rolf Harris songs

Paul Otellini – Intel CEO with new billion $ China Factory

US Employment – A Deep Dark Whole

Today in the NYT Tom Friedman has an interesting article on US competitiveness and an interview with and an interview with Intel CEO – Paul Otellini – who is opening a new billion dollar plant in China in October.  Freedman/Otellini try to sell their reasons this plant and future plants will go abroad and they make a few decent points.  But, let’s not kid ourselves, globalization, gives emerging markets huge advantages over the US. Besides tax breaks why do US companies like Intel build plants & create jobs in emerging markets.

  • There are already plants here and emerging markets are growing over twice as fast as us. It beneficial to have a plant near faster growing markets where few exist.
  • Cost for engineers (workers) in China is about 75% less and 35% less in Germany than the US.
  • Labor costs to build the factory (usually the #1 cost in construction) are significantly less in emerging markets.
  • There are no health care costs in China and a universal health care in othe indutrialized democracies – In the USA health care over 17% of GDP while other indutrialzed democracies are between 5 & 10%.

Solution – One area we should all agree on is increasing funding for the Research Tax Credit. From today’s San Jose (Silicon Valley) Mercury News – “What’s really needed is to increase the value of the credit, and to make it permanent, as President Barack Obama proposed in his 2010-11 budget.”

This will NOT solve the problem. Those 4 bullet points are very significant to the profit bottom line. But its a step in the right direction toward getting us out of a deep dark unemployment hole.

KISS & Stocks (Keep It Simple Stupid)

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


Index Percentage Volume
Dow +0.02% up
NASDQ +0.32% up
S&P 500 +0.23% up
Russell 2000- +0.88% -

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

Technicals, Fundamentals & Analysis

See PositionsStrategy , and Overview for changes made over weekend. (No changes this weekend)

A bigger rally collapsed in the last 1/2 hour of trading. Volume was up, but only the NASDQ was above average. Longer term rallies are usually lead by the NASDQ & small cap stocks (Russell 2000)  These two indexes have taken over market leadership in the last few weeks.

Most foreign indexes are higher overnight and this AM. The fundamentals behind this are probably the fact that Greece has approved budget cuts demanded by European Union (really Germany) for a loan,

But, and its a big BUT the broad New York stock exchange is now in oversold territory according to our McClellan Oscillator.  This is not your parents buy and hold forever stock markets more and more economic bubbles have burst or are forming.  So right now, even though momentum is with the bulls, its time to start cashing in on some of your profits. The more oversold we get the more you sell.  See positions below.

Significant Indexes

  • McClellan Index rose to +62.51 yesterday We are now over +60 or Oversold territory. Time to seriously consider selling into any rallies.


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

The mistake made was not buying enough long positions when markets got oversold last month or at -60 on the McClellan Oscillator.  Right now in Wall Street terms its time to start taking money off the table.

  • recently bought (added to) EWZ (Brazil) - considering selling into any rally today or at open
  • 1/2 of MOO (agriculture ETF), - Sold at 44.55 for +5% gain
  • The remainder of THY (ETF that does 3X what techs do)Sold into rally yesterday at 143.50 for +15% gain
  • remainder of EWZ – Will sell into larger rally
  • remainder MOO – Will sell into larger rally
  • FXI (China) – Will sell into a larger rally
  • IMAX – Still holding on (rallied 4+% yesterday)

ETFs because of their size and diversity are more prone to follow the broad NY Stock Exchange’s McClellan Oscillator.  Individual stocks less so, but most will.  Of course in the past few years there have been times the NYMO has reached over 100.  This is why you sell in moderation and not all at once. If we get up to area’s close to 100 Investors411 will start using ETF’s that short the market.

Long Term Outlook = NEUTRAL


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