The Known Universe


grand_universe_by_antifan_real

Before we jump into Politics, Stocks, & Economics and let your mind go in the following video from the American Museum of Natural History.  It takes 27 seconds to get started in the Himalayas and expands. “The Known Universe”LINK

Folks who love video’s like the above can’t wait to see an alternate universe or Avatar in 3D

Health Care

If you really want to get into the nuts and bolts of the Heath Care bill – Progressive Glenn Greenwald’s answer to Nate Silver’s 20 questions (see yesterday’s Update) LINK and Silver’s response LINK

In the NYT today there are two broader editorials on the current Health Care Bill.

  • Nobel Prize winning Progressive Economist Paul Krugman – “Pass the Bill” LINK
  • Senior Weekly Standard and NYT conservative columnist David Brooks – “The Hardest Call” - LINK

Reality is the Republicans are not going to do anything to seriously change health care. They did nothing significant from 2000 to 2008. This bill will give additional coverage to 30 million Americans and prohibit discrimination by heath insurers. It may or may not marginally bring down costs. It’s clearly not making lots on the left and right happy.  (See comments by D. “I’m Not Happy. “) I’d sure like to see the 27% of insurance costs that is bloated salaries of insurance CEO’s and executives reduced and a whole lot of other changes.

Our politicians  (both left and right) are far more influenced by lobbyists and stereotyping the other side to get elected. So any future change is doubtful because it sure looks like they will gain seats in the mid term elections. Hopefully moving the entropy that envelops Washington will spark a process of change.

Elizabeth Warren

Congressional Oversight Chairman of TARP Elizabeth Warren has been a voice of reason. Mama Jama in the comments section has sent in a valuable 3 minute CSpan video with her comments. LINK

KISS & STOCKS

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -1.27% up
NASDQ -1.22% down
S&P500 -1.18% down
Russell2000- -1.14% -

Investors411 record – 5 years of beating benchmark S&P 500

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

Technicals, Fundamentals & Analysis

The dollar exploded higher and stocks took a big hit . Volume did NOT increase. (A small increase in Dow) I’ve followed stocks for several decades and the lack of volume over the last three or four months is very unusual .  We’ve slowly moved higher, but even yesterday’s toasting was in relatively light volume. One thing is certain – no new money is coming into the markets from the sidelines and trading is being even more dominated by short term traders than before.

Fundamentals Domino’s are beginning to fall . In this case it’s the economic well being of countries that have become over extended with debt. Dubai was the first and may just a case of taking on too much debt – then getting hit by the recession.

Now, there’s worry that countries impacted by our financial meltdown (shadow banks in those countries that traded unregulated financial weapons of mass destruction – credit default swaps) might also fall like domino’s. Greece had its credit rating downgraded over a week ago. Spain & Italy look shaky. All the former Russian satellite s who bought into the unregulated free market (got into credit default swap debt) are on very thin ice – especially the Ukraine. Jolly old England (London brags it is the financial center of the world) is worse off than we are. = Potential big Bearish news

A second fundamental spooking the markets is what’s going to happen to the Fed and shadow banks . The shadow bank lobby is ultra strong (unfortunately). However, there is momentum building to have the Congressional Budget Office (a relatively bipartisan group) oversee the Fed. Pluses and minuses here. Today just the minus. While the CBO is basically apolitical, it is a branch of congress. If congress got control of overseeing the FED, it would become even more political.

Quadruple witching day for stocks. Translation – lots of traders have to buy and sell because their options expire. Irregular trading happens

FEARLESS WEEKLY FORECAST Up to flat week . But be careful we are entering overbought territory (see below) and if rally continues I’ll be taking profits rather than adding to stocks.

Bottom Line - The dollar (see above and below comments) is on at least a major short term bull run. Both fundamentally and technicals support this move . Dollar up = Stocks down .

If you don’t understand a term look in up at Investopedia.com dictionary LINK

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Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI The Baltic Dry Index measures the flow of goods by price (world trade) . -98 yesterday

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The Dollar is currently the #1 forecasting tool (now weakening as a predictor)

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar. Mantra Dollar up = US stocks down & Dollar down = US stocks up US dollar rose a HUGE +1.11% . Anything close to or over +/- 0.50 is significant. Over 1% HUGE The dollar closed at $77.72 . Technically we’ve broken through the 50 day moving average and TWO significant resistance levels = Very Bullish for dollar & bearish for stocks

As mentioned above, lots of the European countries are having problems with debt that are worse than ours. This makes the dollar a whole lot stronger relative to the Euro and former Russian satellite countries currency. The mid term trend is now bullish and the long term trend (looking at weekly or monthly charts of price) is still bearish

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$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at +0.82 This is NEUTRAL Position. We have a long way to go till we reach overbought or oversold.

It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 for a month+There has been no clear buy or sell signal for over a month.

Oversold conditions (@-60) = buy, Overbought positions (@+60) = sell The closer we get to +/- 60 the better our chances of making money with a shorter term buy/sell signal

Bottom Line Start thinking about taking profits, especially into any continued rally .

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

(again a little behind on latest moves)

Will wait to sell some ETF’s and stocks when McClellan Index/Oscillator approaches overbought (@+60)


Recommended ETF’s and Trades

SELLING & BUYING

Your Comments - (See “Monitor’s” comments on side of blog – About a week  ago Investors411 sold its positions in GLD. DGP, AMZN & NVS ) – Not interested in opening any new positions right now Waiting for a clear signal from MCellan Index to commit additional capital or sell existing positions .

If we rally into the end of this week I’d take some more profits

Sold BAC (very small position -1%+ of portfolio for a -6 % loss)

Will sell some FXI (China)  (@ 4 to 6% of portfolio) into any rally today – WHY –

  • China is a “high beta” ( it makes bigger moves/more volatile than others) ETF’s
  • Technically (see chart) it has broken through a couple support levels.
  • China sells a lot to Europe and if they are in trouble China is impacted.
  • BDI is falling
  • The McClellan oscillator is at zero. Stocks have a long way to go before they reach oversold or overbought levels.
  • Momentum is with the bears.

Caution here, I’ve made mistakes before in timing. This might be the perfect “buy the dip,” but there looks like more downside to come. (see above)

Also considering selling 1/2 position in MOO

Bottom Line – Waiting for McClellan Oscillator to get close to + or – 60 before making a major move.

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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