The Scream

“The Scream” – by Edvard Munch

Understandably, many of you are frustrated with the direction our country is heading in . You’ve watched again as another economic bubble of unregulated capitalism burst. Last year – two bubbles – housing & finance. The collapse of Lehmann Brothers and the financial meltdown showed the world we needed some rules to govern unregulated markets.

It’s obvious that relative to the world and especially Asia (China) that the US star is falling and theirs is rising. You thought finally your fellow American’s would get it.

The health care/public option failure is especially frustrating because some good ideas came close to passing. (See Bob’s comments onside of blog – Why was there no mass organized demonstrations for a public health care plan? and earlier comments) You realize that a 5 to 10% increase in health care each year is going accelerate the already growing gap between the rich and poor in the USA.

Is Bob right? – Perhaps in America the class struggle between the rich and those that have less is over.  The rich (symbolically – shadow bankers) have won a round or two this year. It can get depressing and make you want to scream.

Certainly in China it is hopeful that you see one generation move from slave labor in rice paddies to becoming a computer programmer.  But, admittedly here the flow seems in the opposite direction.

Sometimes you win and sometimes you loose. The bottom line is three other old adages “what doesn’t kill you makes you stronger.” You learn your lesson, adapt and move ahead.  The second adage is “it could be worse Yea it could have been a lot worse -  think President Palin. Lastly “think globally and act locally” The key word here is to act on what you believe in. Sometimes that seed you plant takes time to grow

So  scream or don’t, but keep fighting for what you believe in &

Happy Hanukah

Post script – I’m sure Bob will keep on trucking.

KISS & STOCKS

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow +0.28% down
NASDQ +0.29% up
S&P500 +0.70% up
Russell2000- +1.57% -

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

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

Technicals, Fundamentals & Analysis

Running out of Oxygen – US & most world markets have been moving higher in weak, below average volume .  We’ve move up again over the last 4 days and inched out new closing highs for major US markets (all but the Russell 2000 index).

We are in moderately overbought territory (see below). Translation – we are staring to run out of buyers.

The inverse relationship between the dollar and stocks has broken down somewhat over the last two weeks. But its still there.

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.

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) .

The BDI a fell a  -49 points Friday and closed at 3530. Over the last week the BDI dropped rapidly and the decline eased on Friday.  Since Mid November highs the BDI (see chart) has established a clear downward trend =   bearish signal

What it means-Since the low of Oct 2008 technically the long term chart is = Bullish. However we are now in a month long correction. Mid term trend = Bearish The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets.

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

$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 was fell yesterday -0.23% . Anything close to or over +/- 0.50 is significant  The dollar closed at $76.35 . Technically have broken up through the 50 day moving average resistance level and then failed to break out through the Oct/Nov high around $76,82 resistance level.  In technical terms we have created a “double top.”  The $76.82 level is now a very important line in the sand.

The whole dynamic  here seems to have changed – We now, at least for the short term, have a rising dollar

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

There’s been a dramatic change in the last 4 trading sessions. We broke out of the range (see below) and are close to  overbought/sell positions . The index closed at +40.17 This is an  Overbought Position and we are getting close to a +60 dramatically overbought  or sell signal.

From past updates – It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 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 Time to 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)

We’ve had, and volume has confirmed, a quantum shift in markets. This may be temporary and it may be long term, but it necessitates major changes in positions. – looking for dollar to hold or add to gains . – This happened or was confirmed yesterday . Will wait to buy some ETF’s and stocks when McClellan Index says we are approaching 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.

Right now, it sure looks like we are reaching overbought positions.  If we rally into the end of this week I’d take some more profits

Start small & Build your position – Buy the dip.

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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