Part 2

Let’s start today with a fun video from Babelgum entitled Elect Willfully Ignorant (Thanks to HG for the heads up on this video)

“Deja Vu All over Again”Yogi Berra

“There’s a sucker born every minute” -PT Barnum

  • Remember the right wing fear mongered us the Iraq war was aslam dunk Saddam had WMD’s, it was going to be a cake walk, the war would pay for is itself and you were NOT a patriot if you believed otherwise.
  • Remember the shadow banks said no worrieswe are the best and brightest, we are not over leveraged, we don’t cheat, capitalism can regulate itself.
  • Remember when in 2000 the right wing cut taxes and went to war no problems” cutting taxes (especially for the rich) and war would lead to jobs growth. The wealthy would not invest abroad or in derivatves, big companies wouldn’t eat smaller ones cutting jobs, and outsourcing of good jobs would never happen.

All proved to be fabrications, We are now stuck with an endless war, too big to fail (they got that way by over leveraging) shadow banks dominating, huge deficits growing, almost a world wide economic collapse and American jobs that have disappeared.

What happened was a case of rebranding, hidden money, and astute marketing. Right wingers or the rich oligarchy realized that since they had caused this catastrophe of debt, wars, job loss & crony capitalism they needed a new brand. Hence the Tea Party or as Tom Friedman branded them the Tea Kettlers.

The Kettlers blew off steam. They yelled, screamed, and fear mongered. They had a huge TV network as backing.  Literally everything was shouted down in a web of fear and accusations.

They pumped up the fear just like before the Iraq invasion and the PT Barnum “suckers” fell for it again and again and again. Just like  Yogi Berra says – “deja vu all over again.”

Tomorrow Part 3 –  just the facts.

KISS & Stocks (Keep It Simple Stupid)

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



Index Percentage Volume
Dow +0.20% up
NASDQ +0.46% up
S&P +0.21% up
Russell 2000 +0.63% -

Technicals, Fundamentals & Analysis

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

US Stock Markets -

The dollar went down – so it should be no surprise to Investors411 readers -US stocks went up.

All eyes are on the dollar 24/7 and which way the dollar moves out of its consolidating range (see past updates) will determine the fate of stocks.

One very important piece of news – Treasuries had a TIPS  auction (Treasury Inflation Protected Securities) and for the first time securities had a NEGATIVE yield. What’s all this mean? Investors who bought this 5 year bond think HYPER INFLATION is on the way

The Critic mentioned the “Golden Cross” (The 50 DMA crosses the 200DMA on chart) for two of the major US indexes. This is indeed a long term bullish sign and stocks are usually higher 6 months from now.  The Critic quoted a figure of 63% of the time.

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar fell an almost insignificant -0.45% yesterday. Dollar currently moving sideways within a range (see below) Trend for stocks = Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Rose a minor +0.77% yesterday. BDI now consolidating after bull run that began in June. Longer term Pattern= Bullish/Neutral
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Rose slightly to +4.48% yesterday. Lot of room to move both higher and lower. Location= NEUTRAL

Reading Tea Leaves.

The Dollar War continues. Dollar bears moved prices lower, and the tracking ETF for the dollar UUP ended the day at 22.37

From past Investors411 -“Any move in UUP above 22.7 resistance is trouble for stocks. Any move below 22.18 support level is good for stocks. A breakout of either the support or resistance level will tell you who wins the dollar war. UUP at 22.47″

For three days in a row the dollar has started lower and rallied. Clearly there is a strong support level building.

The fact that our Fed is about to embark on QE2 (see past updates) has already been called indirect currency manipulation or pushing the dollar lower by the Germans.

In the long term its easy to be a dollar bear and therefore a stock bull. You can also understand why folks are worried about hyper inflation.


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)

  • EWS (Singapore)
  • SSO (2x what S&P does)

From yesterday – “Not making any specific move until dollar breaks out of its range. I would look at a breakout higher for the dollar, and a corresponding fall in stocks and the MO to oversold as a buying opportunity for long term investors.”

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.”

Longer Term Outlook - CAUTIOUSLY BULLISH


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