Heritage School House

Back To Basics

At the top of the Investors411 blog are 5 different categories [HOME PAGE, HELP/EDITOR, STRATEGY, POSITIONS   & OVERVIEW] These are designed to help you access more information and describe the basic viewpoint of this blog.

Investors411 follows mega trends and how they influence stocks, politics and your lives. See yesterday’s blog as an example of how megatrends influenced solving a 30% of GDP deficit after the World War 2 and how a different set are hindering a solution to our 10% of GDP deficit now.

The world of the stock market has changed. In 2008 Investors411 clearly stated that the financial meltdown would have a “far, far, far, far, far” bigger impact than expected. It obviously has and will continue to do so.

Here’s the Good News - The 2008 meltdown threw global trends for a loop. But over the course of the last two months, technically, the same country stock patterns have reappeared. Old favorites like EWZ, FXI, EWY (S. Korea – 21% of exports to China vs only 10% to USA) have and are outperforming the US indexes again. Check these out by using the charts at the side of blog.

Led by Paul R and others in the comment section lists of individual stocks that may benefit from these and other mega trends are published and commented on.  See Positions below.

What’s Different – The Black Box/High Frequency Traders BB/HFT control the vast majority of trades. (50 to 80% on a given day) The vast majority of these are day or swing trades. They are NOT focused on historical long term technical analysis because they are short term traders that can swing either way (long or short) In the end fundamentals will catch up with them, but remember “the markets can stay irrational longer than you can stay solvent.” (Wish I knew the author of that statement)

Here’s the Bad News – We haven’t fixed our opaque shadow bank financial system. Neither has Europe. We have enormous future problems that will create more debt – military spending, social security, medicare. We have a fractured, less transparent political system and a media that plays to fear mongering and bias. I’m sure YOU could add to this list, but let’s end with this. Emerging market countries are providing a greater chance for upward mobility for their citizens than the USA


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 +1.99% down
NASDQ +1.80% down
S&P 500 +2.20% down
Russell 2000 +1.67% -

Technicals, Fundamentals & Analysis

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

Same Mantra for this week -The Black Box/High Frequency Traders BB/HFT control the vast majority of trades.

Stocks continue their Black Box rally in typically light, decreased volume.

The McCellan Oscillator – This is currently our #1 top forecasting toll for when the market will turn.

Significant Indexes-

  • McClellan Oscillator (MO) rose  to +66.40 over the last few days [+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. Even though the MO is in overbought (sell) territory, but it reached over 90 a few days ago. It could easily reach 90+ again before consolidating or making a significant fall. Neutral
  • US Dollar –  The dollar  fell significantly -0.74% yesterday [Anything over +/- @0.50 is significant.] The dollar/stocks relationship is strong – Dollar up = stocks down and visa versa. Dollar  is in a two month long fall and is approaching a major support level. The fall = Bullish
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also, good proxy of China.) BDI was in free fall from a high of @4200 to 1700 . This was a huge -60% drop in 8 weeks is very bearish Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI has staged a two week rally and is up +17% rally and is at 1977. Rate of increase decreased yesterday. That’s not bullish, but the 17% rise is = Bullish

Reading Tea Leaves-

We’re back to Magic Monday’s where the BB/HFT take the markets higher in lower volume.  This means we could see a rally on Friday as traders hope for another magic Monday.  There is still wiggle room in the MO (90-66 = 24 points) for the markets to go higher before becoming too oversold they have to retreat. Remember these numbers are NOT exact and a rough approximations.

Positions

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

EWZ is the only long position at this time. Will sell 50% at 5% gain.

Sorry don’t have time  to go over these in depth, but they all seem to be worthy buy the dip candidates.(IMAX now questionable). But here’s YOUR Stock List (Mostly a list of the stocks YOU sent in) Both Paul & I have gone over these stocks. He has provided their earnings report dates of those that have not yet reported this quarter. Holding a stock into earnings is an obvious risk.

BIDU, AAPL, SNDK, PCLN (today), F, CREE (8/10), SAM (today), GMCR, HMIN (8/10), SWKS, RADS (8/5), SKX, VCI, UFS, IMAX, UPS.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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