A Liberal Icon?



According to today’s Tea Party dominated Republicans, Ronald Reagan must look like a dirty liberal/socialist icon. He amassed the greatest increase (in percent) of national debt and then raised taxes over 5 times in the later part of his administration to bring his run away spending more into balance.

Reagan and Dem. House Leader Tip O’Neill may have disagreed but they worked for compromise. However in the age of Murdoch ratings generated media journalism has changed.

The no compromise brinksmanship of the Murdoch inspired far right Tea Party (Remember it was FOX news in the USA, like the now defunct  168 year old News of the World in Britain that did everything it could to instill right wing no compromise bias) has seemingly backfired on the far right.

Poll after poll is showing the unwillingness to compromise on the part of the far right dominated Republicans as an overwhelming negative in the debt crisis debacle.

A Member of the No Compromise Far Right


It’s time to take a serious look at what may happen to your financial well being if the USA does default.

Note - I don’t think this is likely (best guess 30% chance of no compromise) and if 8/2 does happen without a compromise I expect Obama to invoke 14th amendment.

Therefore, Louise Story’s Wall St Makes a Fallback Plan for Debt Crisis is a must read.


KISS & Stocks

(Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary




Index Percentage Volume
Dow -0.12% Down
NASDQ -0.43% Flat
S&P 500 -0.07% Down
Russell 2000 -0.27% -



Technicals, Fundamentals & Analysis

Shorter Term Outlook.


  • As the August 2nd deadline looms closer, more and more investors are going to take positions to protect against what happens to their money if the US does default. The fundamentals/earnings have been better than average, but fear of the consequences of default will rule.
  • Remember, FEAR is generally thought of by market psychologists as TWICE as powerful as GREED
  • Yesterday was the confirmation day of Tuesday’s big rally. What we got is a weak confirmation – a slight decline but in weak volume. Technically this is a wee bit bullish.
  • As mentioned two weeks ago – “If the US debt default starts to hurt stocks, politicians will fix the problem rapidly because their campaigns are all funded by an elite oligarchy of insiders.” However, it matters what investors worldwide think of our political/economic system. That confidence was shaken in 2008. Idiot politicians can further destroy this confidence with their inability to compromise.
  • Two of our most successful technical forecasting tools listed below – The closer we get to August 2 the less these forecasting tools will matter.
  • The McClellan Oscillator (MO) chart rose to -7.81 (-30 somewhat oversold, -60 oversold, -90 OMG oversold. The more oversold we get the better the chance for an oversold rally) Lots of room for MO to move higher or lower = Neutral
  • $USD The Dollar fell a significant -0.57% yesterday (+/- 0.50 is a significant move and the dollar is usually a contrarian indicatorPrice chart shows we are in a month+ long trading range. It is still in that range, it broke though a major support level. It’s 50 day moving average. Normally I’s give this a Neutral/Bullish for stocks, But because investors are focused on the  US debt crisis = Neutral
  • Reading The Tea Leaves Solid earnings in techs are bullish, but all eyes still on US congress.

Longer Term Outlook

weeks, month, months

  • Repeat - It’s impossible to accurately predict how the politically manufactured Kabuki Dance over the debt will end. Therefore, hanging in their with a NEUTRAL Long Term Forecast. However, perception slightly favors bulls.


Paul’s Corner


The market? No RVBD, a former member of YSL, reported earnings Tuesday  after the close. It didn’t meet revenue expectations, and took a 23%  hit. This is a very important lesson as why it’s best  to wait until after an earnings release for a buy. Some times in a good up trending market one can gamble a bit prior to earnings, but 2 weeks or more prior to earnings is suggested.

I trust  none of you folks were in still RVBD as it should have been exited back on Mar 18 when it dropped through the 50 DMA in the market down turn and it kept heading south. True it had a nice double bottom, but it wasn’t a good double bottom since the second bottom wasn’t lower than the first. Sure it had a nice climb up the chart with the strong market two weeks ago, but when it started ticking off prior to the expected earnings date profits were best taken.

If you are the true BUY THE DIP optimist, have loads of spare cash and we were in an up trending market, a buy in this area could be a good gamble, IF you give it a few days to settle down before you dump your wife’s Christmas Club into RVBD. (Christmas Club’s, remember them?)

Another YSL member FFIV reported after the close yesterday, met expectations and is off about 15% in after hours trading. FFIV is a competitor to RVBD and seems to being taken to the cleaners along with RVBD. Talk on Wall Street suggests “tech” isn’t a safe bet until September. Interesting forecast, we shall see. BTW FFIV’s chart has been horrible for months and sale was suggested many months ago by Investors411.com.

Dave Steckler in his latest blog discusses the current market and  “Consolidation“. A new term for some and an important thing to watch for in the market. As always, Dave gives  a great chart lesson.


Off the stock subject, the current Republican front runner appears to be Romney. Great looking, charismatic, and knows how to talk the issues. He is touted as a job creator, but is he? Here is a good article from the left wing press Bloomberg, tearing apart his job creating myth. Remember this next fall folks!


So what’s the market going to do today, is this a new morning in America? Let’s load up ThinkOrSwim………here we go folks another day of fun!

Remember, you are responsible for your investment decisions, and I am not.  Please do your diligence, and please take ownership for your actions because I‘m sure not going to.


Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

NLY - Annaly Capital Mgt. Ultra high dividend stock - Has dipped down into buyable position. Caution if we do have meltdown over debt crisis this stock will take a hit.  However through 2008 meltdown it still produced a double digit dividend.

All the blow concepts are at least, in part,  considered of the potential of a US default

GLD & SLV - Will buy GLD today simply as a hedge against default.

UDN & UUP – Considering holding UDN – An ETF that shorts  the dollar. Another possibility in “Puts” on UUP – An ETF that is double long the dollar.

BZF – ETF that tracks Brazil’s currency.

Disclaimer Personally I own  a group of dividend stocks (also a couple other long term investments) including NLY. I have placed puts on one ETF that shorts a major index and a couple of stocks. JS in the comment section has used the term “insurance” to describe the way “Puts” are used protect long term investments. – email me if you want to know more or post a question in the comments section.

I firmly believe you can make money with BOTH long term investments and short term trades. See POSITIONS Section of blog for ideas


Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative Comments Section every day.

Don’t forget to send in your stock choices fro our new Stock List #5

Deadline Friday noon


Longer Term Outlook




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