We’re moving -  Downstairs in a two family home – So Investors411 may not go out a few times this week

Guest Editorial by


Sugar Free Bob/Bob Sadinski

Bob is a former artist and who now farms in North Carolina. He is a frequent contributor to the comments section of the blog .

Is it possible that despite our excitement at seeing this historical fight played out before our eyes that this is NOTHING NEW!

Is it possible, ney, is it probable that because Winners Write History, that we have swallowed American Mythology  as History and that this dirty fight we are witnessing is not something really special but,…Just more of the same. Teddy Roosevelt first called for it. Can we imagine the War the corporations waged then was any less vigorous or disingenuous then as now? Or the titanic struggle against Unionism or against the New Deal? We have seen this struggle before,..many times. It’s about time that we viewed it not as partisan politics having a debate over public policy. It is class  against class, funded and led by corporate interests that will stop at nothing to get their way.

Under our legal system,a defendant is innocent until proven guilty. The Defense has to create a window of doubt  about the guilt of the client to avoid a guilty verdict. They don’t have to prove innocence. They only have to create doubt in some of the jurors minds to avoid losing.

Same with the health care fight. The corporate interests are free to lie and distort. They can intimidate discussion of the issues and the corporate interests that own the MSP are free to promote the impression that they are right to be angry. They are promoting doubt about the Obama plan and doubt leads to clinging onto the known rather then take a chance on the unknown. They are being sleazy and on ethical but,they have taken over the media focus and message and appear to be winning.

The question is: Are the corporate interests so Large and in Charge that we can’t beat them?!
Is this new or something we sadly had not learned from our history?!

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow -0.34% down
NASDQ -0.40 % down
S&P500 -0.33% down
Russell2000 -0.09% -

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

  • Brown = repeat statements
  • Green = usually bullish statements
  • Red = Usually bearish statements

Technicals and Fundamentals

Volume fell dramatically as US stock’s posted very modest losses.  Volume is the #1 confirmation of a price move and when bulls see stocks fall they want volume to fall with it.

Fed meeting Tuesday & Wednesday this week.

AIG -Up another +5.75% in declining, but still huge volume.   Scroll down to weekly chart here.

Why AIG is so important -  it was the last in the long line domino shadow banks that insured/bet on credit default swaps. They received 10′s of billions from the US government or the taxpayers to keep the company afloat starting almost a year ago.  If AIG had fallen both the insurance and credit industries would have gone over the edge of a cliff in cascading debt obligations. This would have started a economic collapse.

It’s starting to look like we may get all our money back, plus interest. On the surface this would make these bailout programs a financial success for US taxpayers AIG stock is now at $28.70

The entire financial sector is up almost 200% since the lows. See chart of XLF here (scroll down to weekly chart) Both the Fed and the Obama administration have continued to insure that the shadow banks remain solvent through TARP bailouts, discounted Fed loans, simply printing money and doing nothing about the factors that caused the problems in the first place.

Simple reality is banks need to loan to make the economy grow. But if we leave shadow banks to regulate themselves inevitably the same lack of oversight will create the same problem. We all seem to have forgotten what happened last September and are moving forward using even less regulations – not even using mark to market accounting rules.

Bottom Line – History repeats itself.

Significant forecasting tools/Indexes for stock markets

BDI The Baltic Dry Index measures the flow of goods (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . 2975 is the major support level and the BDI closed at 2689 - down last eighth days in a row. 

In a nut shell the BDI is

  • short term Bears rule
  • mid term Bearish pattern
  • long term - Bullish pattern

The BDI has formed a series of  lower highs &  lower lows – a bearish chart pattern since early June. BDI fell 135 points Friday and 8 3 on Monday. So, the rate of decline/change is diminishing. Since the BDI chart flows more smoothly than stock prices we could be seeing a turn around because the rate of decline is diminishing. However, clearly still = Bears Rule

Simply put if the cost to trade is breaking down between countries, so is the amount of goods that flow between countries.  One of the greatest dangers to a worldwide economic recovery is the breakdown of buying and selling goods between countries.

$USD - The dollar rose +0.32% Here’s a multi year chart of the US dollar Dollar up usually = stocks down. That correlation returned yesterday. However, we have established a series of lower lows and lower highs  on the chart pattern and that is bearish . If the dollar could rally above its resistance level (see chart 50 day moving average and an old recent high – both less than +0.50% higher then the rally could have some legs.  This would be in the short term bearish for stocks.

Positions

The whole Positions Section has been revised (Click on "Positions" at top of blog). Check it out

Adding to EWZ (Brazil)

Bought SPX yesterday (@5% of portfolio) (see yesterday’s post)

Would treat any dip in prices as a buying opportunity.

Long Term Outlook = CAUTIOUSLY BULLISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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