Investors 411 Blog

Germany and Jobs

Berlin Wall Falls

The jobless rate fell again in Germany from 8.3% to 8.0% in Sept, then to 7.7% last month. LINK (World News Network which carries this story is a good source for news outside the USA.)

What does Europe’s biggest economy do right beside provide health care for all its citizens? Nobel Prize winner Paul Krugman points out some obvious differences in our economic systems. Basically, Germany has a more regulated free market/capitalist system. They take care of their workers. The rebound from recession is also evidence that outside the USA other countries (especially emerging markets) are recovering faster than ours. LINK

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Dollar rose  a very significant +0.78 so stocks fell. The inverse relationship between the dollar and stocks is so strong it is easily the dominating factor in movement of equities.

List of best performing stock markets this year by country from Seeking Alpha – 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 @ 7% 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 +206 points yesterday and closed at 3954. Up 12 days in a row. DANGER – This index is going parabolic – up too far too fast – building a bubble. A higher high price on its chart pattern has been confirmed The BDI has rallied about 1800 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 was rose a VERY significant  +0.72% yesterday. The dollar closed at $75.68 . “ Usually a major support level at least temporarily halts any fall.” The $75 support level held and now the dollar is in the middle of its range.

The next important resistance level for the dollar is the falling 50 day moving average (blue line on chart). This is at $76.25 this AM . The support level is a little below $75.00 . Both are EXTREMELY important lines in the sand. A breakout on either side will move US equities in the other direction and the world will follow.

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

The index closed at -17.81, down 207% – If you look at the chart – once major momentum starts in one direction it usually continues. If stocks and this index close down  below  25/30  today the trend should continue until we reach oversold levels – below 60. (note -207% is significant,but not as big as it looks)

Key to chart – Zero  is roughly  neutral and 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 over a week

Investors

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.

Going to add Indonesia & Vietnam ETF’s – but waiting for dips. Also going to add DGP (this ETF does about 2x what the GLD does) – More explanation later. As a trade like GS. Again, waiting for dips

Traders (short term plays) These are not ETFs, but individual stocks

Extra Note of Caution here – Even though I always warn you AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING! please note I’m far less confident in individual stock picks

CSCO – (5% of portfolio) Flat since we bought position a few weeks ago . – Going nowhere while markets have moved higher.  Selling soon for @ -1% loss – Hopefully into a rally. Sold 1/2 CSCO two days ago and the rest yesterday for -1 to 2% loss. Position CLOSED

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. Instituted change yesterday , but subject to further change back to neutral since breakout was weak.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!