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Le Scandal

Dominique Strauss-Kahn sex scandalis a seismic event for the IMF and a major development for French presidential politics. But the implications for the eurozone crisis are probably being overdone.

Strauss-Kahn is the head of the IMF and the leading contedner for the French Presidency. He was caught by police in a NYC hotel sex scandal with a maid. As head of the IMF he is obviously a mega player in financial circles with plenty of  friends and enemies. This is coming at a time Europe is in the middle of some crucial debt negotiations with Greece and other member states. Imagine Ben Bernanke caught with his pants down.

Perhaps the only saving grace is he was expected to resign to run for the presidency of France

More

  • NPR
  • AJC – Atlanta (latest)


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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 -0.79% down
NASDQ -1.21% down
S&P 500 -0.81% down
Russell 2000 -1.40% -

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Technicals, Fundamentals & Analysis

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

  • Le Scandal and its impact is going to focus investors on lots of negatives and uncertainty. Stock markets hate uncertainty. = Bearish
  • Those who have relied on Volume as a forecasting tool have looked foolish since the Fed. started manipulating/managing markets though the liquidity of quantitative easing last November.
  • However a market fall in reduced below average volume is unusual. Markets have been propelled higher by ultra light volume rallies, but light volume declines are an almost unique. = Perhaps a reason to be cautious – time will tell.
  • Question – What happened to that Fed induced money coming into the markets that was so transparent on light volume days? (see reading tea leaves below)
  • Seeking Alpha author on how the week sets up. – Red Flags Everywhere

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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 a significant +0.71% Friday.  Dollar bulls are on a big run that started 7 trading days ago. For stocks shorter term trend = Bearish
  • 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 -14.56. Still in the middle of its range. Almost equal room to rally or fall = Neutral

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Dividend Stocks

Part 3

Europe’s in trouble, Japan’s in crisis, unemployment remains high in the USA so its natural for investors to turn toward more defensive stocks and cash. Investors when they are worried tend to favor more defensive stocks. Example – People are addicted to cigarettes, they won’t stop smoking when times get tough, and those stocks also have a second stream of income – So a dividend stock often outperforms.

Today, because of time limitations I’m just going to print a lists of dividend stocks I own or am considering.  Investors411 will go over each one individually in the coming weeks and probably a couple more.  Some of the stocks have more growth potential and lower dividends others have higher dividends and perhaps less growth potential.

CautionNot all of these are in a position to BUY right now. The list is NOT in order of preference. * denotes my family owns this stock.

Higher dividends – Ticker symbol and last dividend paid listed below – All of the below have flat or growing dividends over 3 years, many longer. Highest dividend stocks were covered last week.

  • MO – 5.64%
  • PM  -  3.73%
  • KMP* – 6.11%
  • EPD – 5.78 %
  • DUK – 5.24%
  • PGN – 5.27%
  • HCN* – 5.58%
  • VZ* – 5.23%
  • T* – 5.50 %
  • WIN – 7.42%
  • CTL* -7.08%
  • SNH* – 6.36%
  • MRK -4.18
  • LLY – 5.11%
  • BCE* – 5.22%
  • BMO* – 4.48%

More growth than dividend.

  • CVX* – 3.03%
  • MCD – 3.10%
  • PG  - 3.22%
  • CL – 2.73
  • DD – 3.00%
  • GIS – 2.90%


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Positions

Reading The Tea Leaves - The dollar is rising and Le Scandal should add some combustion to the rally. The MO is in neutral, so what usually is a decent (“merger”) Monday is looking bearish.

We’ve seen a roll over in most commodities (huge volume) , emerging markets, and some high beta names. Also, a corresponding move to defensive positions and cash. I don’t think this is Chicken Little, end of the world., but reason for caution.  When the MO  near gets below -60 there will be some kind of counter rally.

There’s a whole pot of Fed induced growing US dollars out there. There’s a whole pot of dollars coming out of commodities. – Where is that money going to go? Probably into stocks

The counter argument is the Fed stops it’s liquidity injections June 30th.  The counter counter argument is if things get bad enough the Fed will find some way to inject more $ into the market.

Bottom Line - We may see selling this week – However, Don’t fight the Fed has worked. The whole CME Group  raising margins to stop the silver rally may just be part of  the Fed’s managing/manipulations. The dollar going higher, ironically, gives the Fed more room to manage/manipulate.  All this has consequences in the long term, but its the Fed’s game and with the head of the IMF in deep do do the Fed becomes even stronger.

Check out the Quantitative Easing chart in the STRATEGY (click on word STRATEGY on top of blog or the link) Section of the blog. The stock market didn’t end between QE 1 & 2.

So Investors411 is going to stick with what works till its broken.  An MO approaching -60 is a signal to buy. Maybe later its red, but for now a yellow flag

Disclosure - I or my family have positions in REMX, NLY & GNC. I run a fund with a long term position in GLD

The Investors411 Portfolios – See POSITIONs Section of blog. – Click on word POSITIONS at top of page.

  • REMX – Dipped below its 50 day moving average on Friday. Not good news.
  • NLY and AGNC (two recommended high dividend stocks) Bought NLY at 17.14.
  • YOUR Stock List stocks according to longer term market outlook CAUTIOUSLY BULLISH are  in a position to buy. Shorter term Investors411 feels a lower MO is a superior buying position. Also each stock individual performance obviously matters. See Paul’s remark’s on right side of blog.
  • See last Monday and Wednesday’s Blog for more on Dividend Stocks.
  • IMAX from YSL was up +5.34% Friday. Thor broke an IMAX record and There are some big summer block busters coming up in IMAX 3D. IMAX has been the most talked about stock in Investors411 since Avatar opened.

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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

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Longer Term Outlook

CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

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