Rodney Dangerfield

The late comedian’s famous line was "I don’t get no respect." He’d bemoan his obviously earned lack of respect.  The same holds true for Obama. Doggie’s Mom points out in the comments section that under Obama we have had a financial recovery. Yet Obama gets no respect.  It all comes down to Health Care and leadership.

Where’s the Obama who stood tall when he ran for president? Where’s the passion that made us believe? Where’s the vision? Where’s the guy who withstood all Hillary, McCain and the far right threw at him? Where’s the Obama charisma?

Obama gave a milk toast talk yesterday stating "We’re going to have Heath Care Reform." He wasn’t exactly cardboard, but he was certainly no George Bush putting his arm around a 911 firefighter telling us its all going to be OK.

There’s a time to be cool, analytical, smart and a consensus builder, and there’s a time to stand and fight.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow +0.76% down
NASDQ +1.01% flat
S&P500 +1,09% up
Russell2000 +1.25% -

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

Yet another  weak below average volume rally. Therefore no confirmation of the price move either way. The major indexes are all approaching yearly highs. Hard to see any significant breakout because the volume is soooooooo weak.

Sometimes, the unexpected happens – Just about any technical analysts sees the above weak volume rally and in no way expects a rally. So if a rally happens all these technicians (and there are lots at major institution) are forced to cover. Consequently markets move higher.

The one fundamental that is the driving force behind the stocks surging is financials – From AIG to Citi, to B of A to GS and many others.  They are borrowing $ for nothing and getting very credit worthy clients to make loans to. They do not have to use mark to market accounting – so the books don’t reflect potential losses. Government is doing nothing to regulate them and the health care debate consumes all the news.

One should hope for some sort of regulations to return on those who caused the worldwide economic meltdown – but the too big to fail shadow banks are raking in the profits. This is the gravy train of wealth creation right now .

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The big number to focus on will be the August unemployment number in early September.

S ignificant forecasting tools/Indexes for stock markets

BDI The Baltic Dry Index measures the flow of goods by price (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern .  The BDI fell - 70 t he n -9 0 & -80 yesterday. We’ve again broken a support level and formed another lower low. The mid term trend since early July is clearly bearish, with a series of lower lows and lower highs. @ 2298 is a major area of support and the BDI has fallen since early June from 4291 to 2534

In a nut shell the BDI is

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

Bottom Line This is NOT looking good . While we are still a long way off from major support levels but the mid term (since June) bearish trend is growing. T he case for trade barriers between nations and a growing worldwide recession is getting stronger.

While this index does not have as immediate impact on stocks, as the Dollar does, it is very significant to long term worldwide economics.


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$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

The dollar fell -0.17% yesterday and, you guessed it, stocks rallied. The Dollar is in a range between $79.5 and $77.5 . A breakout to either side will seriously impact stocks. Dollar closed at $78.35

Mantra Dollar up = US stocks down & Dollar down = US stocks up

A gradual reduction in the price of the dollar is part of the solution to global worldwide recession

This is the index to watch because its impact is immediate.

Positions

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

Still have not had a chance to revise Positions section of blog.  Buying on dips – Smaller positions in FXI (China) & EWZ (Brazil) have been added to. Also an SPX (S&P 500) position has begun to be built on dips . Will update over weekend.

  • Considering selling the smaller amount of China stock recently added at a loss and a small amount of longer term position on China.
  • Going back into US financials as a longer term play on dips – If Dems & Obama are going to do nothing to regulate these massive (too big to fail) institutions and continue to throw cash at them – T hey will continue to make $$$$$. FLX , UYG (2X) financials & FAS (3X financials) are the ETF’s to use depending on you level of risk.
  • This is shaping up to be at least a 5 to 10% correction . Perhaps we’ll have to wait till September when volume should pick up for a bigger correction.

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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