Photo from Al Jazeera

It’s become obvious that the USA and other western democracies are looking for ways to stabilize what happening in Egypt. For the time being this means behind the scenes support for the dictator Mubarak. Two major headlines today from Al Jazeera

  • According to al Jazeera Israel who had stayed on sidelines is backing the dictator Mubarak.  Somewhat skeptical of this headline, because no  Israeli  government official has commented so far – it would inflame protestors and be counter productive.
  • Again according to al Jazeera Protest leaders are calling for a mega demonstration Tuesday and a national strike.
  • Caution – al Jazeera has a huge pro democracy and freedom bias for Arab countries. Also a huge anti Israel bias.

America’s dirty hidden secret.

Russia in the cold war ran a string of dictatorships that were loyal to Moscow. They used torture, killings & beatings by a secret police force to keep their dictators or ruling oligarchy in power. The USA oversees  a similar string of dictatorships that streaches from Morocco to the Gulf States. Our control may not be as tight as the Communist’s in Russia, but we certainly exert strong influence.

Some call it looking the other way because we are so dependent on oil production in the Middle East. Therefore, we say one thing about democracy and freedom while doing another.   The Russian domino’s fell one by one and after Tunisia, Egypt is the mega domino.

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Here’s an open letter to President Obama from a couple hundred University professors asking for the USA to United States to stand for democracy and freedom - “to stand with the Egyptian people it must approach Egypt through a framework of shared values and hopes, not the prism of geostrategy.”

Bottom Line – An orderly transition to democracy is preferable to a chaotic one for all parties. However, there comes a time in individual lives  and societies that you stand up for shared values or you look for excuses not to support freedom and liberty that we all cherish.

All of this is happening because we are dependent on dictatorship’s for oil and have no  concrete energy plan to break that dependence.

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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 -1.39% up
NASDQ -2,48% up
S&P 500 -1.79% up
Russell 2000 -2.52% -

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Technicals, Fundamentals & Analysis

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

  • Egypt is the major news. More uncertainty = down market. Any major signs of other mostly US backed dictatorships protestors seeking freedom/democracy would be harmful to stocks. The call for a mass rally/national strike on Tuesday is the headline
  • Last week the +51,000 new jobless in the weekly jobs number was bad news for US economy. Remember, bad news for the markets means perhaps more quantitative easing from Fed. Therefore in a twisted way bad news is good for US stocks.
  • This week we will have the monthly employment number.
  • Obviously, still endorsing the concept that the Fed [POMO [scheduleis and will be the key factor in keeping a long term rally going. (see Investors411 for many, many moons).
  • Most stock markets are down modestly, outside the middle east. This, at first blush shows the Egyptian news has been accounted for by US equities

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Significant Shorter Term Forecasting Indexes

  • The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar rose a significant +0.53% Friday as investors sought the safety of the dollar due to news out of Egypt. Longer term trend Two+ weeks of dramatic fal is still bearish for dollar,  and therefore 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.]  Dramatic fall for MO to -24.70 Starting to get to oversold but still but still = Neutral

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Reading The Tea Leaves

Egypt is obviously the # 1 consideration. This is a potentially very volatile situation that can spread that’s impossible to call. So get ready for whatcould be a roller coaster ride.

Our major warning last week came from a Tom DeMark and another from and Ian Woodward HGSI Paul R’s favorite analyst- see comment section of blog) The Dow is up 9 weeks in a row (you may have to exclude Friday) and many analysts feel that’s overbought in the long term.

It looks like the volatility that was apparent Friday and throughout the weekend on worldwide stock exchanges has settled down. Most major worldwide exchanges are down slightly.

The Super bowl is coming up and America’s short attention span could waver.

What to watch for today

UUP -The dollar tracking ETF. Investors may flood into dollar because of worries in Middle East sending it higher and stocks lower. Definetly what to watch today.

AAPL –  Just a bit further away from upside breakout.

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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)

  • NONE - Investors411 was stopped out of all positions at or just below the price they were bought for.
  • REMX – Lost -1 % overall because the first 1/2 was sold for a -2% loss.

Under consideration - Nothing today. But check into comment section of blog for any radical change because of Egypt. May consider a short or long position in leveraged ETF.

DDM - (2x DOW) The trend to big cap stocks is apparent.

UWM (2X small cap stocks) Hope, but doubt this will be long term hold.

UCO -(2x oil prices) All commodities, are under pressure from inflation worries in emerging markets. UCO broke support level in big way. Waiting for it to settle.

REMX (Rare Earth ETF) –  Rare commodity used in everything from some TV’s to hybrid cars. Really believe this a good long term holding.

FAS (3x financials) & UYG (ETF that does 2x financials) XLF is the financial ETF. - Shadow banks have numerous advantages. – Opaque, special help from Fed and your still on the bottom line to bailout too big to fail institutions.  This sector is being manipulated higher by Fed. Those that can overcome ethic problems with shadow banks could consider buying. Yes, this is another bubble building.

DGP – (ETF is 2X gold) Falling too fast. Wait till it settles.

DBC – (Commodities ETF)

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Tomorrow will be the LAST day to send pick a couple stocks and send them in to Paul & I (use my email of post in comments section) . YOU can make a difference. The more stocks that are sent in the better the chances for a YSL #4 that outperforms the market. Requirements for stock selection below.
  • the 50 Day Moving Average is Moving Higher
  • Trades $5 million dollars worth of stock each day – Multiply trading volume by stock price. {Example 500,000 shares times $10.00 price = $5,000,000}

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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#4) which is under construction.

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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