Japan Aftershock

Moment of Silence in Japan

Japan Goes Chernobyl

For a month Investors411 has been telling you that this disaster is far worse than expected. Japan has now upgraded the Nuclear disaster from level 5 to level 7. Level 7 is the worst.

Here’s a Nuclear Expert Tuur Demeester, whose been on the cover of Time Magazine editorial titled “Spent Fuel Pools in US are a potential time bomb, situation can get worse than Chernobyl”

To give you an idea of the scope of Chernobyl here’s the Wikipedia map of currently impacted areas

Jan Hatzius

GS’s Jan Hatzius

Goldman Sachs Stomps on Commodities

GS & JP Morgan are the two shadow banks with the most power. When they  say jump and Obama (also most other polls and related monetary officials) says how high. The shadow bank cartel along with the military industrial cartel are the two most powerful entities in the USA today.

Yesterday the IMF lowered its global growth picture and GS stomped on commodities. Thanks to Paul for info on the first and one of you who gets the GS announcements for the second. Here’s the money quote that was posted in the comments section of the blog yesterday

“We are closing our CCCP basket trade, first recommended on December 1, 2010, for a gain of roughly 25% against our 28% target. This recommendation was premised on our belief that Crude Oil, Copper, Cotton/Soybeans and Platinum remain the key structurally supply-constrained markets. On a 12-month horizon we believe the CCCP basket still has upside potential, but the unrest in the Middle-East and North Africa region, and the potential for further supply shocks pushed the basket up significantly in a short period and our Commodity Research team believes that in the near term the risk/reward no longer favours being long the basket and consequently, we are closing the recommendation with good potential gains. While crude oil, cotton and copper prices have substantially exceeded our targets, platinum and soybean prices have lagged.”

Earlier in the year Investors411 brought you GS call for 2011. Their chief economist, Jan Hatzius, is perhaps the most powerful economist in the financial world


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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

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Index Percentage Volume
Dow +0.01% down
NASDQ -0.45% up
S&P 500 -0.28% down
Russell 2000 -0.84% -

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Technicals, Fundamentals & Analysis

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

BUBBLE-ICIOUSInvestors411 term for the stock market – We are all riding on the outside of an ever expanding &  Central Bank manipulated liquidity stock bubble. See Investors411 STRATEGY section for more. Remember Fed liquidity (POMO, QE 2 or quantitative easing) announced ending is June 30th.

  • The Goldman Sachs note (bearish on some top commodity plays in short term) well describes an outlook that could hold investors attention today too. But, all leaders , including emerging markets took it on the overbought chin yesterday.
  • As Paul has pointed out earnings season is around the corner.
  • If you want a complete update on today’s stock news – here’s seeking Alpha’s senior editor. -Japan is the lead = Bearish

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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 rose moderately yesterday +0.26%. However longer term trend since start of year is bearish with lower highs and lower lows on chart, We are at a lower low. In shorter term we probably will form a lower high, so thats bearish for stocks. But longer term - For stocks = Bullish
  • 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 -28.36.  Getting close to overbought, but still = Neutral

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Reading The Tea Leaves

Looks like we are in for a correction. The dip last month took the MO down to -85 (see link to chart above) Since the MO is compiled at the end of the day you have to guesstimate where it will end up. Usually a 1 to 2% loss is good for about a 30 point drop.

Bottom Line – No Black Swan events have been able to seriously impact the Fed liquidity driven equity market. So we are nearing a buy the dip territory.

What to watch today – For shorter term traders Market movers - UUP (the dollar) still has most influential, unless others make some huge move like Japan’s announcement – Irony is if the Fed were not dumping money the Japanese move has the potential to devastate world economics.

  • USO - ETF for oil - Oil up = stocks down - Now back above $100. - Headlines from Libya show stalemate and slight recovery for reels.
  • UUP - (Tracking ETF for dollar) Remember - The dollar is a contrarian indicator. Bad dollar = good stocks
  • AAPL – Tech giant and market mover – Trading below its 50 DMA. Since mid February this char shows a series of lower highs and lower lows = Bearish
  • Japan Rector Developments – This keeps getting worse.
  • EEM – Emerging market ETF – On a breakout run, but getting  way over extended and now correcting.

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Positions

The POSITIONS Section at top of the blog is a link to 4 different portfolios. It’s full of investment idea. Below is the actively managed portfolio #3 – Aggressive ETF Trading – To follow this and Portfolio #4 Your Stock List keep an eye on the daily blog and the comment section.

(I do manage 6 accounts that have other positions).

This  is a repeat from early last week – Will place this list in Positions section.

Below are the recommended ETF’s/ETN’s for the 2nd Quarter

  • Since many of these choices are not directly related to stocks on the NYSE the MO & the Dollar may influence them differently.
  • Buy the dip is a recommended strategy (Investors411 likes the 17, and 50 DM’s) Especially don’t buy when stock is too far above 17 DMA
  • A 7% to 10% trailing stop loss is recommended
  • World events impact these sectors
  • Investors411 believes these sectors should outperform the S&P 500 now through June 30
  • Investors411 expects, baring a change in world events, a higher S&P 500 on June 30th.  Emerging markets and US small caps stocks are especially vulnerable to any meltdown of the S&P.
  • You can use part or all of list.
  • Note - I own SLV, REMX, UWM,RJA, EWV, and plan to own ILF on a dip. Sold UCO yesterday down 7% from high. Very sad for Japan, but selfishly happy to own EWV (ultra short Japan ETF)


UCO -(2x oil prices) Why not, its also a hedge against higher gas prices. Historically driving season in summer drives prices up in the late spring. Supply problems exist because of revolutions/instability in oil producing countries. If these problems are resolved then UCO should NOT be held.

REMX (Rare Earth ETF) - Really believe this a good long term holding.  Simply put because of limited supply of rare earth metals and big demand is going to outperform almost all other sectors. Only some sort of major economic collapse will hurt this sector. A buy.

DGP – (ETF is 2X gold) and/or SLV (silver). AGQ (2x silver) Both inflation worries and a falling dollar positively impact this sector. Silver actually has a manufacturing component.

RJA (Agriculture commodities Index) For a more complete list of commodity ETF’s see POSITIONS

UWM (2x small cap stocks) or TNA (3X small cap stocks) The later for more aggressive traders. Closest correlation to MO and falling dollar. Small cap stocks are outperforming.

EEM (emerging markets) and/or ILF (Latin America) EDC (3X emerging markets) The later for most aggressive traders. Emerging markets are leading the world and after underperforming for years they are back.

EWV (ultra short Japan) The horrific and tragic situation there has been minimized. This holding acts in part as a hedge especially for US small cap stocks and emerging markets.

TMV (3x 20+ year Treasury yields)

A winning hedge has been UWM & EWV combination (some of you may have problems emotionally shorting Japan)

ROM (2x techs) & TYH (3x techs) The later for most aggressive traders.–  Technology has been toasted and if the S&P is higher on June 30th, this sector should catchup.

I’ll keep this on the blog’s home page for a week or two then place it ion the Positions page.

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Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See ”POSITION“ section of blog (at top of page) for lists of potential stocks & ETF’s including “YOUR Stock List.

Paul has an excellent strategy on when to buy dips – See his postings in comments section throughout the day – These apply to ETF’s also

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

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