Photos of Ron Paul & Barney Frank from Wikipedia

Kissing Cousins?

SE writing in the comments section has a revelation and points out  similarities between Libertarian Ron Paul & Barney Frank. He concludes “We need to change our foreign policies and redirect the savings to our domestic policies.” Source – A Paul/Frank joint interview on public radio

Ron Paul is perhaps even more aggressive about getting out of Afghanistan, Iraq and closing our costly European bases than Barney Frank. Paul’s position is often echoed in the comments section by Mama Jama who believes we should bring everyone home and protect the USA (also Israel).

Jsovjani has always wanted Europe to pay more in the defense of Europe & the world, but realizes that’s not going to happen. (see comments section) In the far right’s eyes Europe’s major threat is (“old communist”) Russia. But the Russians would rather get rich selling the Europeans their natural resources than fighting them.

The problem with most libertarians is they want not only to eliminate almost all military spending they also want to eliminate almost all social security, medicare and supervision of capitalism,  etc.  They’d let the shadow banks run wild.

Black Box Algorithms

I know this is boring, but its YOUR money.

One major change from black box traders is basically all stocks are moving together in concert. CNBC had an analyst/chartist on at noon EST who demonstrated that for decades US stocks have not moved in concert like they are now.  They all go up together and down together.

This is directly due to Black Boxes that buy and sell (they also use puts and calls) sector and Index ETF’s. They also concentrate on mostly liquid stocks. They make up 50% to 80% of trades in a given day – so with their High Frequency Trades everything moves in concert. (more later)

This is one major reason Investors411 is using ETF’s right now.

This does NOT negate our stock list or selecting best stocks out there – something Paul R and and a few others do quite well. In fact, picking the best stocks in oversold conditions may be even more relevant.

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 +0.04% flat
NASDQ +0.35% down
S&P 500 -0.02% down
Russell 2000 -0.41% -

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

Technicals, Fundamentals & Analysis

Mantra for week Earnings Season begins this week. - How markets react to news has usually been the key. If a stock shrugs and goes nowhere on good earnings news you know there’s trouble ahead. Remember Black Box algorithms  dominate even more as volume declines.

The Intel earnings home run went from a +8% move in pre market trading and ended the day up +1.67% = Bearish

Black Box traders rallied into the close = Bullish

Markets went no where in weak volume. If they do this again its bearish. Now = Neutral

Largest market news event - China economy slowed as expected in the second quarter. It’s hard to trust any government’s economic proclamation – especially China. Numbers are usually massaged in favor of who is in power. Translation – China is growing, just not as fast as they say. This fact is generally accepted by most investors/traders so its not news.

Significant Indexes-

  • McClellan Oscillator (MO) fell to +51.57 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. The Black Boxes have not allowed the MO to rise above 80 since 3/09. Now close to overbought position = mildly bearish
  • US Dollar –  The dollar fell -0.26% yesterday [Anything over +/- @0.50 is significant.] The dollar is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, have used the inverse relationship of the dollar as a key part of their trading system. This inverse relationship is part of their algorithmic system. For stocks = Bullish
  • BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also good proxy of China.) BDI is in free fall from a high of @4200 to 1710 Monday. This is a huge -59% drop in almost 8 weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI fell a decreased -4.53% yesterday. You have to go back to April of 2009 to find a lower BDI. Fundamentally this is very BEARISH

Best read of tea leaves is Black Boxes push markets slightly higher. Reasons – dollar probably continues to fall  & momentum higher at close yesterday.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Updated over weekends Investors411 holds ONE position at this time

The overall stagey at this time especially for traders (as opposed to longer term investors) is to buy ETF’s that short the market. As the MO shows the market is more overbought add to those positions using ETF’s that short more and make bigger purchases.

  • Yesterday Investors411 bought SH – The ETF that shorts the S&P 500. @% of portfolio position at 51.45
  • US markets did not rally enough (get overbought enough) to use the EFT’s that double or triple short the indexes and even buying the SH might be premature
  • If when indexes move higher I will add these ETF’s (see yesterday’s investors411)
  • Will keep a 5% stop loss on each position.
  • It depends a lot on how high the MO goes, but for the next couple days a rally of the benchmark S&P 500 above 1105 will probably be the next buy area.

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Long Term Outlook =CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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