Happy Talk

The happy talk by governments and  media outlets around the world have masked the severity of the 2008 economic meltdown. Today, that same happy talk hit reality in Japan.

TEPCO and the Japanese government has continued to underestimate the problems in Japan.

  • The lead story in yesterday’s NYT examined “Vents that American officials said would prevent devastating explosions at nuclear plants in the United States were put to the test in Japan and failed.” (Thanks to frequent blogger Popeye for heads up on this.)
  • Today we learn that Japan’s GDP for the last quarter was almost twice as bad as was predicted. Last quarter’s GDP was -3.7% making Japan officially in a double dip recession.(Two negative quarters of GDP)

The sky is not falling. However, its time for some  realism when comes to economics and nuclear power.

  • The USA is the ONLY country that is NOT stopping to evaluate  its nuclear program in light of the Japanese disaster. Shouldn’t we pause to evaluate nuclear power?
  • Japan was the #2 economic power in the world till this year and its GDP had turned negative before the nuke disaster. Our economy and the worlds is in a fragile recovery. Shouldn’t the immediate focus of our politicians be insuring that we recover?

Without recovery there will be no funds to impact problems of the future. Japan seems to be taking the right role and focusing on recovery. Our politicians in the USA should do the same.

The Donald Ducks”

Headline from Politico

Three of the leading Republican candidates (Gallop Poll) effectively ended their quest for the presidency this week.

Mike HuckabeeAnnounced he would not run – Not to worry he will keep his FOX News show. Directly after his announcement in what only can be considered as bizarre Fox news ran a long infomercial as Donald Trump monologued his assessment of Hukabee, Obama and politics.

Newt Gingrich- Announced that Ryan’s plan to privatize and eliminate Medicare was “too radical.” This brought down the wrath of Republicans and then led Newt to say opps it was the media’s fault. Ryan’s plan will cost more and cover less (Goggle the words – CBO, Ryan & medicare) for American according to the non partisan Congressional Budget Office.

The Donnald - Announced he would no run – Not to worry he will keep his TV show. Trumps tough talk (fear mongering, finger pointing, & bigotry) and constant references to his TV show had catapulted him to the #2 position behind Huckabee (Gallop Poll) in the race for president. Wake up and smell the coffee, this run was all about Trump’s ego and his show. Everyone from the media on down who took his candidacy seriously was played for a sucker. (see Popeye’s remarks in comments section of blog)

The new Gallop poll has two new front runners for the presidency.

Mitt RomneyA candidate in 2008 whose cardboard presentation and flip flops on positions made John McCain look like John Wayne on Steroids. If Newt stays, undoubtedly, folks will evaluate which of the two has changed more positions. Romney wins the cardboard contest hands down.

Sarah PalinMama Grizzly can always say grrrr.

Maybe a better candidate will emerge from the pack. Stay tuned.


KISS & Stocks

(Keep It Simple Stupid)

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




Index Percentage Volume
Dow +0.65% Down
NASDQ +1.14% Down
S&P 500 +0.68% Down
Russell 2000 +1.60% -



Technicals, Fundamentals & Analysis

Investors411 record - 6 years of beating benchmark S&P 500

  • Stocks returned to the most familiar pattern since Fed managed/manipulated liquidity was reintroduced last November – An ultra light volume rally
  • UUP is the tracking ETF for the dollar is still the most relevant forecasting tool for US equities. Dollar. up = stocks down. Dollar down = stocks up
  • The dollar has flattened over last three days and a moderately oversold rallied.
  • Dell had a solid earnings report and investors  ignored the earlier poor reports from Cisco and HP. Commodities also rebounded, but the technicals (Dollar and MO above and charts/explanation below) were the driving Factors.
  • Our Fed managed/manipulated growing money supply had no place to park its money – Treasury bonds are falling, 0% interest rates in stocks, and a whole bunch of added dollars have recently come out of commodities & stocks. Therefore, Path of least resistance was for oversold stocks to move higher.
  • Short term momentum with bulls


Shorter Term Forecasting Indexes

There are hundreds of forecasting tools, – These two tools have worked

When they stop working Investors411 will use other Indexes

  • The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar was flat +0.03% yesterday.  After a big run  higher for 8 trading days the dollar has flattened or retreated for the last 3 days. Three flat days is neutral. but momentum is still with dollar bulls. If the dollar continues to move sideways the outlook will change to Neutral. For stocks shorter term trend = Bearish/Neutral
  • McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .MO fell to -40 two days ago and rose to -9.04 yesterday. Accurate prediction from Tuesday MO isOn its way to oversold (@-60) Another bad day or two and we should be ready for at least an oversold bounce. We got that bounce yesterday and, depending on the dollar  could hold onto those gains today. However MO is now near Zero and therefore = Neutral


Paul’s Corner

What an interesting week so far, at the start of the day I don’t know whether I should open a new bottle of Tums or put on the party hat.  Wednesday was a good day and most of Your Stock List looks ok with many stocks in a good buy the dip position.

So how do we “buy the dip” without “losing the house’?

Buying when a stock drops and touches the 17 or 50 DMA or if below when it crosses up through the average is usually a good method. In many instances a stock isn’t at a moving average or is even slightly below the average so we need to place a buy order above the previous days high to get a safe trade.

LYB took a serious hit this week along with the sell off of the commodities and now is in a buy the dip position. I have prepared a PDF  file  explaining  how to safely trade LYB in a  “buy the dip” position .


Take a look at the stocks in Your Stock List [click on word POSITIONS at top of blog and scroll down for list] and you’ll see most are in the “Buy The Dip” position.  SPRD and JNPR would not have been bought yesterday may 18  using this method since they didn’t raise above their close on May 17.

Remember, you are responsible for your investment decisions, and I am not.  Please do your diligence, and please take ownership for your actions.


Check out the advice, recommendations, analysis by bloggers on stocks,politics and trends in the comments section of the blog  Many of the best concepts regarding YOUR Financial Future are discussed their. Watch for Paul’s Corner every Tuesday and Thursday


Longer Term Outlook



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