A Big Wet Kiss

A Big Wet KISS – No in this case a BWK does not mean what you think


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KISS = Keep It Simple Stupid – Investors411 is going to spend the rest of the week Keeping it as simple as possible. If you’ve followed Investors411 for a while you know that the blog outperforms the benchmark S&P 500 Stock Index because it follows a series of mega trends and invests accordingly. See OVERVIEW section at top of blog.

The No Brainer simple mega trend it the case of the two above magazine covers for potential investors is SEX sells

When I was 20 something I loved the artwork, fantasy and heroics of comic books. So I bought some for 10 cents and put them away in plastic cases. Last year as a Bar Mitzvah gift we gave one Conan the Barbarian and one Iron Man comic worth a total of @ $1000.00 to a grandson. - A 5000% profit if my math is right.

So today I’ll buy and save Newsweek Covers of Sarah Palin.

First, in a brown paper bag I’m going to take it to Town Government tonight, I’ll take the Newsweek and show it to some of my fellow officials. Hopefully testosterone crowd has not already bought up all the copies of Newsweek to put under their mattresses.

Palin is going to whine cry and blame others for the picture she posed for.  She plays this "why’s everybody always picking on me" victim better than anyone else on the planet.  The obsessed media will juice this and a few years from now I’ll have a magazine/cover worth a lot more than most investments. If American’s buy her glitter and elect her President I’ll make a fortune.

Bottom Line – The Trend is simple and works = sex sells, Does anyone have old copies of the Washingtonian?

KISS & STOCKS

For those of you whose eyes gloss over in the stock section I’ve tried to KISS it today, but I left a little in for those who want the deeper analysis

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage % Volume
Dow +0.29% down
NASDQ +0.27% down
S&P500 +0.09% down
Russell2000 -0.09%
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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, Fundamentals & Analysis

Technicals = Looking at pretty pictures of charts and finding patterns. Investors and Traders are animals who tend to run in herds moved by fear and greed.  We collectively form habits – After the first few time stopping at a red light becomes a habit. The same happens to most traders

Fundamentals = All the figures that show if a planet, country, sector or stock is growing or shrinking. In this case its growing or shrinking economically. The most important of fundamentals are mega trends.

Bottom Line – Technicals and fundamentals are useful when predicting what will happen. Investors411 uses them to predict the future – At the end of each day’s blog there is the Long Term Outlook. That show the general predicted longer term (3 to 6 months) outlook for the market

One important distinction to realize when looking at stocks . - Almost everyone else (especially those who invest or trade the big money) knows more than you or me.

  • They have an army of computers and techies doing far more in depth analysis than we do.
  • Also, they cheat – sometimes legally and sometime illegally.

The advantage we have is in KISS (Keep It Simple Stupid) and by using technicals we can follow what this big herd of sharks  are doing. Because they have so much money its hard to hide what they are doing.

Now going to get a bit more technical

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 is @ 1+% off its high (early June) Before that it gained almost over + 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI rose a  very significant +161 points yesterday and closed at 4381. Up 14 days in a row . Technically it broke out through its major resistance level 4291 (this year’s high)  The BDI has rallied about 2200 points since late September. =  Bullish for stocks & world trade right now. Especially good for our positions in FXI & EWZ

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The Dollar is currently the #1 forecasting tool .

$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  significant  +0.56% yesterday. The dollar closed at $75.3 0. This is back above the major $75.00 support level. The dollar rose significantly (above 0.50%) and so did stocks (just a little) This is a rare disconnect. The dollar and stocks almost 90% of the time have been moving in opposite directions. The fact that stocks were able to have a small rally and break the trend is in the short term  BULLISH

CAUTION – The first breakout (up or down) is often false. This happened yesterday Right now the momentum (since the long term trend is down) is with the Dollar bears and consequently stock bulls

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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 +22.63 . This indicates stocks are overbought and The McC fell  -34.41% yesterday. Not sure if this data from Stockcharts is correct

If we get another big rally the McC will be clearly overbought and its definitely time for long term investors to take some profits.  No one should be adding to long positions now. Traders and shorter term investors should be considering taking profits.

Even though the Dollar Rules consider overbought levels (60+) on this index a point to lighten up on stocks)

Key to chart – Zero  is roughly  neutral and roughly when you approach to @ +60 you are overbought and approaching -60 you are oversold . Buy at oversold and sell at overbought. Nothing is absolute in this chart. In fact using the moving averages as a central point is better than using zero. Nothing is absolute about the minus or plus 60 number either.

Oversold conditions = buy, Overbought positions = sell

Positions

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

Sorry have not had a chance to update Positions section in well over a week – see past updates

Investors – Folks who buy and want to hold for months/years.

Comments – NOT the time to buy or add to recommended positions. (FXI, EWZ, GLD Enjoy the rally. Shorter term investors may want to sell part of the 3 major positions while they are at highs.

Traders -  Folks who day trade or are in and out of stocks within a month or two

AMZN & NVS positions are on hold right now.

Long Term Outlook – The dollar looks like it may break down through major support and the benchmark S&P 500 is on the verge of a yearly high – Outlook will change to CAUTIOUSLY BULLISH if/when this happens. But subject to further change back to neutral since breakout was weak.

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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