Warren Buffett“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” NYT 11-26-06.

Warren Buffett

Obama Caves Into Wealthy

Several of you mentioned yesterday Obama’s tax cut “compromise that extend tax cuts for the wealthiest Americans – The compromise part was unemployment benefits were extended as part of this. (see comments section of blog.)

The Good –

  • Extending tax cuts for working class Americans making less than 200k is stimulative. These folks spend the $ rapidly and the economy flows
  • Extending unemployment benefits is even a bigger stimulus because this money is injected even faster into the economy
  • Both these factors create jobs and we desperately need jobs base to grow.

The Bad –

  • It does nothing to address to address the systemic problem of good jobs leaving the USA by globalized companies hiring everything from engineers to software developers in emerging markets.
  • Its a major victory for the growing wealthy oligarchy that is perpetuating class warfare on working Americans.

The Ugly – Who gets to compound their wealth for two more years.

  • 4 million taxpayers who earn mid to upper 6 figure salaries
  • The less than 1% who earn over a million dollars a year.
  • Estates over $5 million dollars
  • Hedge fund managers and other black box traders who pay 15% in taxes yet earn millions/billions

There are an obvious loosely tied together wealthy oligarchy of greed based individuals and major institutions in the USA who are seeking greater power and wealth at the expense of their fellow Americans. Most stay in the shadows and dominate politicians who need their money to get elected. They won a massive victory yesterday.

My ideal compromise – Would have been to tax everyone over the first $200 or $400k of earned income and give 1/2 that money as an additional tax break to American workers and 1/2 toward reducing the deficit.

There are many rich folks who realize that they too can profit if the American working class prospers because we BUY the goods that wealthy people take part in producing. I’m not calling for a radical change just movement toward a more balanced playing field.

Thanks to JIM J for his chart showing 16 different metrics showing wealth/income over decades moving DRAMATICALLY from middle class to very wealthy in the USA.

STOCKS

Investors411 tries to keep it basic.

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

Index Percentage Volume
Dow -0.03% up
NASDQ +0.14% up
S&P +0.05% huge up
Russell 2000 +0.47% -

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Technicals, Fundamentals & Analysis

Big volume and rally fizzled. Much of the volume involved rebalancing involving Citigroup that traded about 3.3 billion share and was up 3.82%. Reference  - the NTSE trade about $7.5 billion shares yesterday.  A lot of yesterday’s gains were due to this single stock.

Significant Shorter Term Forecasting Indexes

Just one Index stand out today

The 10 Year T BillThe yield of the ten year T bill exploded +7.16% blowing right through major resistance (200DMA) All the Treasury bond yields moved up. 10 year ended at 31.65%.  While its high over last 2 years has been around 4.0% the breakout move is alarming. Higher yields lead to higher interest rates. One major purpose of the quantitative easing is to keep interest rates low.

Barr in the Doghouse.

Reading The Tea Leaves -

Mea Culpa – I’ve made a rookie mistake – One of  Investors 411 mantra over years has been if a stock or index gets too over extended from its 50 day moving average its time to sell.

Three of the ETF I’ve recently purchased are/were over extended.(see charts) This is easily demonstrated by just looking at the charts. A recent example of this in the comments section was covered by when IMAX & DECK got over extended. So even though UWM was up yesterday I cut back on holdings. The same for UCO & today will do the same for DGP I announced these sells in the comments section of the blog.

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The rise in the T bills has taken a bite out of the lower interest rate/weaker dollar trade that has fueled this market.  Best read of the tea leaves is that this is a temorary move. Today is the confirmation day of yesterday’s 10 year T bill explosion higher.

This shows investors moving into T bonds. Usually this means they move out of stocks to go into bonds.

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. These are, hopefully,  longer term positions

When trades are actually made in ETF’s they are listed in comments section of blog (almost always near open or 1/2 hour before close)

  • EEM - (Emerging Markets ETF)
  • #1 UWM – (2x small cap stocks ETF) last 1/2 sold at 40.75 for +14% gain
  • UCO – (2X oil ETF) 1/2 sold at 12.11 for +6% gain. 2nd half sold for 11.75 for +3% gain
  • #2UWM – small cap stocks – Sold 1/2 at 40.75 for +5% gain
  • #3 UWM -
  • DGP -

Plan to sell 1/2 of DGP near open. and put a 3% trailing loss on the rest. Both will end up in the red.  Will put a 3% trailing stop on #3 UMW position today.

Plan to buy back in after consolidation of perhaps a few days. Also the 10 year T bill settles has to down.

YSL is in for some lumps of T bill rally continues.

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.” - I’m sure Paul will remind you yesterday and since its inception YSL is kicking butt

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!


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