WHAT’S UP? – Iran’s Elections – The “Obama Effect” – The “Green Revolution” – The Big Hate – Paul Krugman – Home grown Terrorist and feeding their hate.

Iran

“Green Revolution” supporter – Photo by AFP

Major elections today in Iran.

Already the USA is taking advantage of the Lebanon victory (see last few Investor’s411) and US diplomats are flooding into Syria and Lebanon. Winning means nothing unless you capitalize on it.

The Wild card in Iran Election: Obama by Christian Science Monitor’s Howard La Franchi lists some of the changes. It is one thing for the “Obama Effect” (Link to polling results on Obama effect ) to influence an election in a more liberal Lebanon and quite another to influence an election in hard line Iran. A sitting president has never lost a bid for a second term and Ahmadinejad is heavily favored.

You can read a lot more on Iran elections at Professor Cole’s site , including The Iranian American’s voting in these elections. Iran is a quasi democracy and the real leader is the head Ayatollah.

Our hope here is that there is a strong vocal alternative to Ahmadinejad in the “Green Revolution.” They probably will not win, but it consists mostly of younger Iranians and that’s the future.

The Big Hate

Nobel Prize winner, Paul Krugman editorial in today’s NYT is titled The Big Hate To his credit he differentiates between right wing haters in the media and those who refuse to go along with “The Big Hate.” He concludes

“Yes, the worst terrorist attack in our history was perpetrated by a foreign conspiracy. But the second worst, the Oklahoma City bombing, was perpetrated by an all-American lunatic. Politicians and media organizations wind up such people at their, and our, peril.”

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index Percentage % Volume
Dow +0.37% up
NASDQ +0.50 % up
S&P500 +0.61% up
Russell2000 +0.45 % -

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Technicals & Fundamentals

A 1 to 2% rally melted into the close. Not a good short term technical sign. Volume still below average except for the NASDQ. This indicates that the NASDQ (mostly tech stock) still has the power of leadership position.  We are at yearly highs for most major indexes.

End of the quarter buying will begin to take place.  Many of the major players are waiting (a bit like Investors411) to buy the dip. Mutual funds and others would like to show off positions in some good performing stocks. Therefore, the end of the quarter (2nd 1/4 ends last day of June) is often bullish.  But even more so because we have rallied.

$USD – Repeat – The dollar is the index to watch You could write a book on the dollars influence on everything but for us the bottom line right now is – When the dollar goes down -stocks and oil prices go up and visa versa. Stocks went up so guess which way the dollar went.  Actually the dollar going down is leading stocks higher. It’s the horse and stocks are the cart.

XLF - The ETF that tracks financials (mostly shadow banks ) have been stuck in consolidation for over 3 weeks. Financials had been leading the 2+ month long rally. Techs seem to have taken over leadership role, but hard to see any sustained move higher without financials. Yesterday financials down +0.81 %

WTICOil prices exploded higher +3.01 to $73.90 Chart starting to look like it is going elliptical. Fundamentally the talking heads/ experts see no reason for oil prices to be so high.

BDI The Baltic Dry Index measures the flow of goods (world trade). Stated before -  This is extremely important because one of the greatest obstacles to a worldwide recovery is the lack of trade between countries (protectionism) 24 up days in a row, 6 down day in a row, & yesterday a rally.  Bullish sign.

Reading The Tea Leaves

From yesterday – Right now, markets seem to have over extended themselves and a 10% correction would be good in the long run for stocks . Trading is very light except for the NASDQ which is near average. (Summer trading is usually light)

Many US market is showing signs of stalling out. The breakouts do not seem to be getting any real traction. Watch the Dollar and the BDI.

Position s – (See positions section of blog for more)

  • FXI – our major position rose +2.43% yesterday. BREAKOUT to new high, but volume did not confirm the move. For the second day in a row the FXI was actually up 2% more and then pulled back.  This is a weak breakout.
  • GEX – alternative energy - +0.38 yesterday. Dollar/Oil trade influences this. If oil goes up so doe GEX.
  • PBW – We are going to change from GEX to the other major ETF that does alternative energy PBW- chart This alternative energy ETF is more liquid and its also outperforming GEX. We have been in PBW in past years and went with GEX because it outperformed then. This will be a slow transition over the next month. Already sold 1/2 position in GEX and will add that $ to PBW on a small (5%) dip.  Then sell other 1/2 and wait for a dip.
  • The HEDGE – Little change again.  You can get a rough idea how this position does by looking at the difference between the NSDQ and S&P 500 – (-0.11% and multiplying it by 2) instead of looking up SDS and QLD

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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