RMS Titanic 3.jpg

HMS Titanic

Sipping White Wine

Every year major capitalist leaders from around the world get together at Davos Switzerland and to sample the world’s best wines. This banquet usually sings the praises of globalization and unfettered free markets. But the tone decidedly changed.  France’s President Sarkozy took the lead. What’s unique was wealthy wine sippers went after banks (David Ignatius editorial) in arguably the banking capital of the world – Switzerland. Populism (going after the too big to fail banks and using YOUR tax dollars to bail them out) was popular.

Bottom LineVolker (who goes in front of Senate Banking committee today) & Obama have both spoken out against the too big to fail shadow banks. The Supreme court has given them added power (see past updates). Remember – for something to get done it has to pass the Senate and Chris Dodd (D – CT) is the chair of the Senate finance committee.  He’s the guy who approved the HUGE bonuses for Wall Street Shadow Banks.

Betraying a Nation

Thanks to Yankee Bob for filling in and bringing to light some credible and different ways of fixing our deficit problem.

If we are on the  sinking economic Titanic and the passengers are running from side to side frantically looking for an answer –  the real question is what is the crew (political leaders) doing about their boat. Even an idiot realizes you cant keep cutting taxes and increasing weapons, social security, medicare/medicaid, which combined with the increasing debt make up 70+% of the budget.

Senators (D – ND) Kent Conrad and (R – NH) Judd Gregg worked for 2 years to form a bipartisan commission to deal with the sacred budget cows that both parties have. Two weeks ago it came to a vote in the Senate and even sponsors of the Bill like (R) John McCain switched sides to vote NO .  In all 22 Democrats , 23 Republicans , 1 Independent were too afraid to vote for this bill.  It failed to win the necessary 60 votes to break a filibuster. (53 yes to 46 no) Here’s a David Broder editorial and a list of the cowards who “Betrayed America.

Obama promised to form a Presidential Commission to look into this, but it lacks the power of a Senate commission.

Little Shop of Horrors

Future Wars

We supposedly want China’s support in backing harsh sanctions against Iran .  So The US (Obama) goes ahead with selling $6.4 billion dollars worth of weapons to Taiwan.  China want to have a reconciliation with Taiwan and wants the island to be part of China. China embargo’s  Think we will ever get China to join us with harsher sanctions on Iran?

Like the giant alien plant Seymour in Little Shop of Horrors – the Military Industrial Complex in the USA keeps crying FEED ME


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 +1.17% down
NASDQ +1.11% down
S&P500 +1.43% down
Russell2000- +1.20% -

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

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

US markets rallied significantly in decreased below average volume. Volume did NOT confirm the rally. Only the NASDQ had volume that was even average.  Yesterday’s trading was an oversold bounce.  Technically, so many traders/investors had sold conditions were oversold (see McCellan Oscillator below) and we ran out of sellers.

Volume, our #1 technical forecasting tool, has indicated a major reversal is potentially underway. Three+ big volume combined with major declines shows major players heading for exits in the last 2+ weeks.

The major event of this week will be the Monthly jobs report at the end of the week. Earnings season is basically over.

Significant indexes

  • McClellan Index at -53.52 =  Yesterday we rebounded from over -90 .  We are just below -60 or oversold levels. If everything eles is equal both  long term investors and even short term traders should buy when markets are oversold and sell when they are overbought +60 .
  • BDI – This chart shows the Baltic Dry Index (scroll down) , a measure of shipping costs, Has broken through a major month long  support level at @ 3000 and is falling. Yesterday the BDI closed at  2745.= Bearish – especially for China. More on this tomorrow)

Fearless Forecast (for week) The US jobs report is critical for Americans, but not Wall Street. Wall Street can grow on profits from abroad. In fact, earnings reports which are getting better each quarter, are mostly improving on growth from emerging markets. China, the #1 emerging market has moved to slow growth and prevent a bubble – this has slowed their economy and stocks over the last month. However, the FXI has rebounded over the last few trading sessions in strong volume = Bullish The BDI is showing the exact opposite of a rebound, but an economy that’s slowing.= Bearish

So we have conflicting signals on China’s growth story. We also know from past experience that US which is still the economic leader worldwide (this position has diminish for a decade and continues to do so) can move significantly higher in weak volume. We saw this form Aug to the end of last year.

Best read of tea leaves – since we are technically oversold we should have an up week . There looks to be no major meltdown in the near future – only a question of will there be a further correction. Technically oversold positions should improve in the short term.

Positions

The  Positions Section (also at top of blog) has the latest buys and sells (Usually updated over weekends – will try to update last few weeks today) – These are positions I actually own

SELLING & BUYING

ETF Watch List

Current owned positions

  • FXI (6% of portfolio) China – major technical breakdown of “head & shoulders trading pattern. Bought at @40 Now at @40
  • EWZ (10% or portfolio) Brazil – Between 50 & 200 day moving average, but in correction. Bought at @ 52 & 59. Now at @67
  • MOO - (10% of portfolio) Agriculture stocks – Moved below 50 day MA. Bought at 42 Now at@ 42
  • IMAX (2% of portfolio) – 3D movie theaters and future TV network. (Will keep adding on each dip) Now at 13.50

Since we are closer to -60 on the McClellan this should be a time to BUY rather than SELL 2010 is NOT going to be the kind of major bullish year 2009 was, but if we add when conditions are oversold you’ll do a whole lot better in the long run. The more oversold the better.

Traders should be able to do well today & early this week because of oversold positions.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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