Newton City Hall at Dawn

Dawn over Newton MA

Obama’s Prime Time on BP

Preview here. Major American oil companies & BP will be in front of congress today. The Bottom Line for me is – the transformation to alternative fuels. This is the golden opportunity to make a giant leap forward to alternative energy solutions.

Chaos and lies has surrounded BP (the free market’s) response to this oil spill. Government from the past and present administration has bought BP line for way too long and was caught with its pants down by its ankles. The right wing’s solution is to scream & their drill baby drill mantra.

Perhaps today in front of congress and with Obama there will be the DAWN of some different solutions.

Wonder if oil executives will make the same mistake and arrive in big private jets like the car executives did? Will they get called on it?

Dawn of Financial Reform

The NYT Business section lead story the Volker Reform section of financial reform looks like it will pass!

Bankers have all but given up on defeating …would effectively bar federally insured banks from trading for their own accounts”

What this means is that YOUR FDIC insured deposits would NOT be used socialize the risk of banks trading opaque, over leveraged derivatives. Gee instead they might even loan that money to buisnesses and home buyers.

Current war – Blanche Lincoln’s Derivatives reform. See above link. Better email your congressperson or Senator and tell him/her you support Linclon’s bill.

Why Afghanistan?

The Pentagon, yesterday released the reason we  and should continue in Afghanistan, They have perhaps a trillion dollars of minerals. The Iraq war was fought over oil and now the loosing effort in Afghanistan needed an excuse to continue. China could get those minerals instead of us. What happened to terrorism and why is it the war machine – the Pentagon –  doing a report on minerals now?

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -0.20% flat
NASDQ -0.02% up
S&P 500 -0.18% up
Russell 2000 +0.50% -

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

Technicals, Fundamentals & Analysis

The benchmark S&P 500 fought its to its 200 day moving average/resistance level. Got their in the morning and spent the rest of the day in retreat. = Bearish

One significant data point that investors/traders should remember – Currency markets>Bond Markets>Stock markets. Translation = Because currencies and bonds are so much larger than stock markets they are the DOG that influences how the TAIL (stocks) wags.

With the NYSE up +75 points at it high yesterday – Interday the MO easily reached the +60 or overbought territory. This over bought position added strength to the resistance level and hurt the bulls yesterday. = Bearish

Looks like we may see some teeth in financial reform. Long term Bullish but short term = Bearish

An investment agency downgraded Greek debt in the PM yesterday, but the Euro held onto a significant move higher. In past, this would have sent the Euro tumbling. Sometimes there is a delayed reaction, but for now & for stocks = BULLISH

The Baltic Dry Index BDI has dropped well over 20% of its value in the last month+. Since the BDI measures shipping rates this fall is NOT good for world trade, economics. For stocks = Bearish

Futures up this AM = Bullish

Significant Indexes

  • McClellan Oscillator rose to +50.26 [+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. Considering the volatility of the MO this is about as close as you can come without being overbought. = moderately bearish
  • US Dollar –  The dollar fell a significant -0.77% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. The dollar was @ -1.4% lower in the AM and rose throughout the afternoon.

Reading the Tea Leaves -

A lot of reasons to be bearish this AM. But almost all of Wall Street’s eyes are focused on what’s happening to the EURO. FXE is the ETF that tracks the Euro and it was up +1.09% yesterday despite a downgrade of European debt. There’s a lot of reasons – see red bearish signals above, but if the EURO is going to continue to go up so will stocks.

FXE is the ETF to watch along with Spain’s (EWP underperformed yesterday)

Another charge at the resistance levels for stocks seems likely. Remember, each failed charge weakens the attacking force.

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekend.

With the DOW up 113 points at it high yesterday – Interday the MO probably reached the 60 or overbought territory. This over bought position probably hurt the bulls yesterday. = Bearish

Traders - YOUR stock List from 2/6 & from 9/6 a list of stocks that were outperforming and “worth a trade.”

  • VCI – broke out to new high
  • SNDK – broke out to new high
  • SAM – broke out to new high
  • BIDU – @4-6% rally
  • ESRX (not on list but position Investors411 held) – broke out to new high

No one ever went broke taking profits. My best read of the tea leaves is to sell 1/2 into today’s rally (let the rest ride and hope it turns into long term gains)

Of course the ultra long ETF’s often mentioned (UWM, THY) have have done as well in the mini rally of the last three trading sessions.

Dumping 1/2 of UUP for small loss.

The bottom line is will the EURO continue to improve?

From Yesterday – Change in outlook – This is tentative . Upgrading to NEUTRAL. Technically, this looks justified, but frankly, fundamentally I sure don’t see the light at the end of the tunnel.” – It was premature. Major indexes bounced off their 200 day moving averages and retreated in heavier volume. Not the technical breakout we were hoping for. Let’s wait till the resistance level actually falls to change the outlook. Maybe today Therefore, a return to CAUTIOUSLY BEARISH.

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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