Obama Fineman

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Creating Jobs

Kaufman Institute last month came out with an exhaustive study on job creation. We’ve seen how the old giant companies from Apple to Wal Mart out source jobs my the millions to emerging markets. We’ve been told its small companies that are the engine of job growth in the USA. But it seems to depend on just what type of small company it is is even more important.  One major  conclusion - US job creation is dependent on start-ups and young companies

Health Care

Fear Inc. has dominated what we think about “Obamacare” or the recently passed health proposals. AP poll shows we have no idea what’s in the health care plan. Best example

  • 81% – When asked did the nonpartisan Congressional Budget Office reported did they say Obama care would increase government debt.  81% answered WRONG .- “Obamacare will decrease government debt & reduce red ink.”

Fear is the mind killer that distorts reality and wins elections. 39% of Americans still believe ObamaCare has Death Panels. Here’s a list of the 10 major reforms that took place yesterday.  You can like or dislike Obamacare, but It’s depressing that so many Americans have such a perverted concept of reality. So let’s end on an upbeat of HOPE

Hope

The following is one of the conclusions by JS from the comments section.

“We need more graduates that “make something”, not all the lawyers, MBA’s our top schools are spewing out. I also wonder how all the time, money spent on entertainment, and all the smarter students going into these fields are effecting us. Maybe we need a rethinking of our moral compass (not just Gordon Gecko’s). Maybe the current state of the economy will encourage better behavior. They happened after the depression; maybe some good things will come out now.”

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!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Index Percentage Volume
Dow -0.72% down
NASDQ -0.32% down
S&P -0.83% down
Russell 2000 -1.20% -

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Technicals, Fundamentals & Analysis

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

Mantra for September“The Black Box/High Frequency Traders BB/HFT control the majority of trades. CNBC’s Jim Cramer -”BB/HFT make up 80% of trades.”

US Markets

Up till yesterday the super computers of the BB/HFT’s had been buying into the close. Looks like some something spooked them and volume increased as they sold late in the afternoon. Probably poor economic news out of Ireland/Europe. Selling & increased volume into close = Bearish

How markets react to news is an important forecasting tool. For the last few weeks markets had been brushing off the bad news,but this time they sold on the bad news. It’s when stocks sell on good news that you really have to worry. We’re not there (yet), but we are back in Neutral territory for this indicator.

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar rose +0,23% yesterday, but broke a major support level the day before. The inverse correlation between the dollar & stocks broke down earlier this week (not yesterday). First time since late June that this has happened. Trend for stocks = Bullish
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Fell  -1.01% yesterday. Two week BDI fall. After 8 week bull run trend seems to be changing to = Bearish
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO fell  to -20.19 yesterday. Trend is now bearish, but at support level (see yesterday’s Investors411) = NEUTRAL

Reading Tea Leaves

The MO is our #1 forecasting tool.

  • The -20.19 puts us closer to oversold.
  • Zero is usually the middle, but the 50 DMA is at +16.36. So we’re a bit closer to oversold.
  • The area around -20 is a support level (see yesterday’s Investors411)

This is one of those transition’s points. Regular stock traders will probably push markets higher in the AM. After a three week rally a three day drop, especially in light volume is just too tempting for traders.  The real question becomes what will the BB/HFT’s do into the close.

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 Longer Term positions -

  • EWS (Singapore)
  • USO (price of oil/commodity)- fall of dollar negatively impacting this.
  • SSO (2x what S&P does- this ETF is more a trade that may turn into an investment) I now have a 2% trailing stop on this trade and I’m close to getting stopped out of this trade.

Investors

  • -20 on the MO is a better entry point  than any number higher, but it is still not overbought territory or -60
  • The benchmark S&P 500 yesterday closed at 1124 below its former major resistance/now support level at 1130.
  • The good news is a higher price high has been established at 1149
  • The bad news is we are down below breakout levels
  • Hopefully (for bulls) we’ll have a higher low and our cautiously bullish outlook will continue.

Those investors not invested at all or with a small investment in equities may consider nibbling on a recommended emerging market ETF (see Position section of blog). Waiting for a bigger dip is obviously a much safer play.

Traders

This is again one of those no guts no glory moments that do not always work. You might nibble a new position that looks promising. See YOUR stock list, some some of the leveraged ETF’s suggested in positions. Paul R updates lots of the stocks in the comments section of the blog.

Long Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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