IMAX arc and camera

The Country is Headed in the Right/Wrong Direction

From Pollster.com a compilation of polls Note the trend.

Going Green to the Extreme

The Far Left has its own extreme views. Example – Lisa HymasGoing Green is a reason NOT to have kids.  Her editorial - Say it loud: I’m child free and I’m proud. Money quote

“the single most meaningful contribution I can make to a cleaner, greener world is to not have children.”

Sorry Lisa, almost everyone feels completely different about kids than you.

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!

Index Percentage Volume
Dow +0.43% down
NASDQ +1.12% down
S&P 500 +0.79% down
Russell 2000 +2.00% -

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See PositionsStrategy , and Overview for changes made each weekend

Another rally day in falling well below average volume. = Bearish

Stocks rallied despite a significant rally in the dollar, oil prices at new highs, and the 10 year treasury bond hitting 4.00% yesterday (see chart on right side of blog) = Bullish

This chart of the benchmark S&P 500 at top has something called the RSI (Relative Strength Index) It is another indicator like the McCellan Oscillator that show when a market is overbought.  In this case overbought= over +70. The SPX now stands at +73.96.. In fact all major US indexes, according to the RSI are overbought.

There many different ways to technically measure buy and sell points (overbought & oversold). The RSI is one and it, unlike the McCellan says we are overbought. Right now the McClellan is working better than the RSI because we haven’t yet crashed and burned. So, for now, Investors411 is going to stay with the McCellan because its working.

When to Hold ‘em and When to Fold ‘em

StocksInvestors411 has historically sought long term positions (hopefully years or many months) that follow trends. For a List of those trends click on Overview at top of blog. Unfortunately, along came the September 2008 meltdown/recession and those trends got interrupted or broken.  So shorter term positions became more desirable.  The lack of transparency clouding invstments and technology making everything quicker has impcted trends and markets.

Let’s look at two recent buys. IMAX & DWA One worked the other did not. Why.

IMAX – Up 40 to 50% since purchased.

  • First there was a fundamental reason to buy IMAX. New technology trend in 3D is emerging and people are willing to pay more for the IMAX experience. Technically the long term chart also looked good.
  • But now IMAX’s RSI is at 79.14 (well into overbought territory) and it is the furthest it has eve been over its 50 day moving average. There are a lot of other warning signs but I’m trying to keep this simple.
  • Why hold fundamentally – the technology  trend/ demand is still in place and growing for 3D technology. More Imax theaters and a move into TV is emerging. Some potentially block buster 3D movies like Iron Man 2 and another Shrek are coming out.
  • Why hold technically – For longer term investors, even though this stock is overbought, it is melting up in weaker volume. If there was a big volume rally (going elliptical) it would be time to sell.
  • Technically IMAX is ahead of itself and you’d love to see a sideways consolidation. Yep, you could see a sudden dip, but right now there are plenty of investors wishing they had bought and they will purchase the first dip.

So for now Investors411 will stay put with IMAX and even nibble some more on a dip.

DWA – Lost -4%

  • Dreamworks, DWA, looked like a perfect complement to IMAX. Proven kids films and a handful coming out in 3D would increase profits. So Investors “bought the dip” before the Dragons film was release. Technically a not great, but reasonable long term chart.
  • What happened fundamentally – Dragon’s did not live up to expectations, in part because of the success of other 3D films (Titans & AIWL) Too many 3D films competing for too few screens. Good for IMAX and bad for DWA.
  • I never like losses to exceed 7% (This came out of an old Investor’s Business Daily trading strategy) DWA did go up almost 10%, but Investors is looking for longer term holds or trends it was held.
  • What happened technically – A downside move in heavy volume that broke a support level. So both technically and fundamentally there were reasons to sell.

Realize that there are lots of sharks that know more than you or me. What we can do is identify a trend and use some simple technical signs in trading. If the trend and the technicals covered are collapsing or going elliptical in big volume you fold ‘em. If the McCellan goes too high you fold ‘em.

Some of you use other ways to protect stock purchases like selling covered calls and using exponential moving averages.  These sophisticated investors like Paul R. know what they are doing. Most of you just want something to buy and hold that goes up or outperforms over a longer period.

CAUTION – There is nothing out there that’s a sure thing and everything has become riskier since the Lehman collapse and inability to fix the problem.


Significant Indexes

  • McClellan Oscillator rose significantly to +19.12 yesterday.  [+60 or above = Overbought = sell. -60 or below = oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. – This downward trading pattern has been broken. Moving toward overbought territory
  • US Dollar – rose a significant +0.51% yesterday. [Anything over +/- @0.50 is significant.]

As stated before -What the dollar does over the next few weeks is critical to stocks and economics around the world. Falling dollar good for stocks & rising dollar bad in the short term

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend Monday) - These are positions I actually own

Limited time this AM – Will try for YOUR Stock List tomorrow. FYI – one recommendation CREE was up over 10% yesterday.

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Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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