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Chimerica

Without all the emerging market growth over the last decade (especially the last 5 years) my guesstimate is that the USA would have been in a recession well before the end of 2008 & you could shave at least 3% off USA GDP. Gravity (see comments section) worries about the China bubble bursting. We all do. We need China’s cheaper products, to sell to her growing markets, & China buying US debt. China needs our import market & our technology to grow – hence a symbiotic Chimerica. Many are worried including Ferguson

It was Harvard’s Niall Ferguson who made the term Chimericia popular. His editorial What Chimerica has Wrought

The money quote from this editorial (his book The Ascent of Money is better – both WSJ & NYT favorable reviews) and the reason we desperately need to fix our financial system -

“Why should the rest of the world ever again take seriously the American free market model after this debacle?” a leading British journalist recently asked me.This crisis, he argued, is to economics what the Iraq war has been to foreign policy: a fatal blow to the credibility of U.S. claims to global primacy.”

If this relationship breaks down it will have a very negative impact on stocks world wide.

Health Care

What an amazing turn around on the polls over health care  which had been viewed negatively by most Americans.  Gallop/USA today poll shows Obama/Pelosi heath care plan 49% = good & 40% = bad

John Sovjani (see comments section of blog) has opened a debate over who pays for heath care and Popeye has responded with deficit reduction, but wants public option.   The Devil is in the details on who benefits and who pays. You can be sure Both Democrats and Republicans will continue to lie and exaggerate about health care solutions. This is because both parties correctly see heath care as something they will gain or loose voters over. Remember

Ronald Reagan famously argued that Medicare would mean the end of American freedom


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 +0.95% up
NASDQ +0.83% flat
S&P 500 +0.72% up
Russell 2000 +1.08% -

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

Technicals, Fundamentals & Analysis

See PositionsStrategy , and Overview for changes made over weekend. (No changes this weekend)

Party On - This rally is all about the FED whose continued statement has been “interest rates are going to stay low for an extended period of time.” This was reinforced by two fed governors yesterday (Yellen & Lacker)

How markets react to news is our #2 confirmation factor and bad news does not seem to slow the rally train (see yesterday’s blog).

In the short term – until the McClellan Oscillator reaches oversold or some unexpected major economic event occurs - party on

Significant Indexes

  • McClellan Oscillator rose to +23.97 yesterday. +60 or above = Overbought -60 or below = oversold. StockCharts has a better version of the McClellan chart ($NYMO) LINK. – Investors411 manta is its much better/safer to buy when stocks are over sold and sell when they are over bought. When the $NYMO is around zero those who can accept more risk can nibble on stocks & ETF’s.

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) - These are positions I actually own

From Monday - “If stocks do not take a hit Monday, on worries over potentially more stringent rules in financial sector, we have one strong bull market and get on the train.” After a two day rally, stocks should technically dip this AM and those risk takers may find a better entry point.

For Shorter Term Traders

Bought TYH (10% position at 155.00) – Will sell 1/2 for 3 to 5% hopefully  today – placed stop/sell order at 155.05. However may

Bought ESRX at 102.00 (2% position) – Not waiting for a dip was probably a mistake in the short term here. (more on this sector tomorrow)

Bought DWA at 41.44 (a 2% position) – Think 3D “Dragon Film” which opens soon will be box office smash. & technically Dreamworks was bouncing off its 50 day moving average.

Would have loved to added to IMAX when it was below 15.5, but missed out on dip – Now at 16.61. Will buy a dip. Note – Hope this whole sector is a long term trade- This includes DWA & other 3d stocks mentioned yesterday.

Check out yesterday’s stock list – Led by SHOO lots of those “buy the dip” stocks are on fire.

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Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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