Burning Book

Libya – The UN/Obama’s reason for a no fly zone was to prevent a genocide. The USA/Obama policy is the removal of Ka Daffy. They are two different concepts. Obama’s action in the use of force against Libya without congressional approval was probably unconstitutional, but events on the ground called for immediate action before the collapse of opposition forces.

Japan –  It’s obvious to the whole world that the Japanese government has not been honest about the extent of damage from their nuclear problem. The Japanese people have been heroic. Radiation 20 km away from plant is 1600 times normal according to IAEA A significant potion of Japan is going to become a radiative wasteland like Chernobyl disaster in Russia.

Smoke and Mirrors of a

Manipulated Markets

Burn all the historic book on stock market analysis out there. Forget the analysis of of self interested talking heads on the tube. What we have in the USA is simply a manipulated market that has  radically altered what used to pass for traditional investing.

Forget the experts and/or brokers who are paid exorbitant fees for market analysis. Burn the book and blow away the smoke. Here’s new rule #1. When volume is abysmal US stocks move higher. Little else matters.

Low volume = a rally

Why when volume plunges does the market rally? Simply put – Its easier to manipulate. This allows those entities juiced by zero % interest rates, those benefiting from the Fed POMO program, and big US companies with hoard of cash to manipulate stocks higher.

One favorite way is through High Frequency Trades (HFT’s) that almost mystically make huge buy and sell offers for stocks appear, vanish and sometime buy. These automated computer programs seemingly vanish in high volume but reappear when volume dries up and drive stocks higher. Of course certain HFT’s are always around taking advantage of trade imbalances.

Bottom Line –  For all of you who trade or own stocks  This is a headline driven market and it takes a massive headline to overwhelm the manipulators. It took both the Middle East crisis & Japan Catastrophe to even put a dent in manipulated stocks.

Short term the tsunami of  liquidity makes this a manipulated bull market. Longer term there are some very negative consequences, but that’s another editorial.


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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

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Index Percentage Volume
Dow +1.50% down
NASDQ +1.83% down
S&P 500 +1.50% down
Russell 2000 +2.31% -

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Technicals, Fundamentals & Analysis

Investors411 record - 6 years of beating benchmark S&P 500

BUBBLE-ICIOUS - Investors411 term for the stock market – We are all riding on the outside of an ever expanding &  Central Bank manipulated stock bubble. See Investors411 STRATEGY section for more

  • Lowest volume since Feb. 14th. Low volume = markets rally. The lower the volume the easier it is to manipulate the markets Therefore the manipulators –  the Fed, shadow banks, High Frequency Traders & others push stocks higher.
  • The far less than 50% of the market that belongs to investors who make their decisions on stock valuations are currently focused on  - higher oil prices, a falling dollar, economic distortions created by Japan, & emerging market growth
  • The following is becoming the dominant force in the US stock market. -If markets go down its because of fundamental reasons. When US stocks rise its because of manipulation.
  • Since QE2 began in November there have been dozens upon dozens of low volume rally days. Sometimes huge rallies, sometimes small. That’s the new normal.

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Shorter Term Forecasting Indexes

  • The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks]   The dollar fell again -0.42% Bearish longer term pattern. Major support level broken. Down 6 of last 7 days. For stocks = Bullish
  • McClellan Index(MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] MO rose to +6.32  Right in the middle – not overbought or oversold. = Neutral

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Reading The Tea Leaves

The USD and the MO are the two technical tools that have a track record of working in this manipulated US stock market. One is neutral the other bullish.

The dollar’s fall is good for stocks, but as mentioned numerous times before, falling too far too fast is dangerous. We haven’t reached those levels yet, but if the dollar falls another 3 to 5 % rapidly you are going to hear a chorus of very worried economists


What to watch today

  • USO - ETF for oil - Oil up = stocks down - Now back above $100. - Headlines from Libya. (diminishing factor, but still important)
  • UUP - (Tracking ETF for dollar) Remember - The dollar is a contrarian indicator. Bad dollar = good stocks
  • AAPL – Trading below 50 day MA is bearish.
  • Japan Rector Developments (diminishing factor, but still important)

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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)(see comments section where all trades are first announced.

  • Bought UWM (see Friday’s blog) at 43.49

UWM – Will sell 1/2 at @5% profit and let the rest ride. Will sell/haves stop at 1/2 at price it was bought for

See yesterday’s blog for list of considered ETF’s

Will buy the dip to buy if we get one today. Of course if there is a catastrophic negative headline I’ll wait to buy. Perhaps last day before MO gets too high to buy.

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

If the majority of the major indexes again start to trade above their 50 day moving averages the long term outlook will change back to CAUTIOUSLY BULLISH. The Russell 2000 (small cap stocks) already is and the others are close. (See charts at top right of blog)

Longer Term Outlook - NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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