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Did You Know?

Almost 12 million people have viewed Did You Know (Again thanks to HG for the heads up on the Video) on just how fast the world is changing. The entire video screams how important EDUCATION is. Just one example from video.

  • There are more “honors” students in India than there are students in the USA. The CEO of Honneywell stated on CNBC that the best engineers in the world were in India. Over the weekend a former chair of the Economics department of a major university in Boston told me that 80 to 90% of the PhD candidates in economics at his school were foreign students

Bankruptcy

In one sense you have to admire Ben Bernanke. Our Fed chair is manipulating everything at his disposal, including an attempt at changing public opinion (a 60 Minutes Interview) to keep a bankrupt country afloat.  It comical and tragic that those who created or are oblivious to the imbalances that caused a worldwide “Great Recession” can recognize the problems in Europe but ignore them here.

The Bottom Line is if Bernanke and the Fed’s smoke, mirrors and manipulation do NOT succeed were all toast.

There are lots of  people out there with doomsday scenarios who document and state - From Zerohedge.com

The fact is – we are beyond any fix. Things like cutting government spending will only increase unemployment. We are bankrupt when: What we take in with taxes doesn’t pay the bills. When we borrow and that and the taxes still don’t pay the bills. Now we counterfeit so we don’t default.

Game over!

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 -0.17% down
NASDQ +0.13% down
S&P -0.13% down
Russell 2000 +0.59% -

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Technicals, Fundamentals & Analysis

Flat day & light volume for US stocks. – The NASDQ has joined the Russell 2000 and both are now broken out & trading at yearly highs

WikiLeaks founder was arrested in London this AM – so look for BAC stock (his next target) and all shadow banks to rally today.

A Most Important reminder to Investors and Traders

When trading gets light the Black Box/High Frequency Traders dominate more. They do NOT trade on valuations & fundamentals like markets historically used to do. They use arbitrage and buy discrepancies within stocks,sectors & markets. We take risk. Their risk is like “taking a shotgun and shoot fish in a barrel.”

On heavy trading days they make up over 50% of the volume and on light trading days over 80% of the volume. (CNBC’s Jim Cramer figure is 80%)

Bottom Line – Trading rules have changed. Best example – volume used to be the #1 confirmation behind any sector/index price move. It now maters little and why Investors411 uses the MO as a forecasting tool is because it doesn’t use volume. There are much less pure traders and investors in stocks today, but our size is still considerable.

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Significant Shorter Term Forecasting Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar rose+0.25% yesterday. Dollar was over extended, fell for 3 days and stabilized yesterday. Trend for stocks= Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets,&  exporting countries]Rate fell slightly -+0.51% yesterday. Bearish trend has leveled off = Neutral
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] fell to +10.23 Plenty of room for action up or down. = Neutral

Reading The Tea Leaves -

The FIX is in (See last Friday’s blog) - Today the Fed will be buying another $6 to $9 billion in bonds from its 21 primary dealers ( aka shadow banks or the ones that got trillions in loans after 2008 meltdown) Its by now is no longer a secret that they will (wink, wink) take that money and go long the market. The BB/HFT’s that the Shadow Banks & hedge funds use have already adjusted their algorithms for a fresh supply of money today.  Many other investor/traders now realize what’s happening, they will probably front run this stimulus to stocks that usually starts about 2:30 PM EST.

CAUTION – Time to start to pay attention to MO getting too high. We’re not their yet, but keep an eye on it. Also too many people are catching on to the 2:30 Fed stimulus money is coming into the market train.


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

  • EEM - (Emerging Markets ETF)
  • UWM – (2x small cap stocks ETF) (1/2 this position was sold)
  • UCO – (2X oil ETF)
  • UWM – small cap stocks -
  • UWM – Bought more yesterday at 39.75
  • DGP – Bought at 42.49 (see comments section of blog for buys& sells)

Still view any dip as a buying opportunity because of the Fed’s market manipulations. When the MO gets closer to overbought I’ll stop buying.

You’d really love a dip this AM to buy, but I doubt you’ll get the chance.

Why so much UWM? – Small caps are leading the breakout. YSL – is also  full of small and mid cap stocks.

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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