A Santa Clause Rally for stocks?

YOUR Questions on Health Care

The NYT has come out with its editorial supporting the Senate Health Care Bill. You may disagree with the Times or Nate Silver (See Bob Sadinsky’s comments on right of blog)  but they have the facts. They do omit some of the downside and you can post your objections in the comments section. New York Times takes a clear position – ” A Bill Well Worth Passing LINK

YOUR questions (see D’s comments onside of blog)

  • “Cadillac” Plans – These are the plans that cover virtually everything and have (almost) no co pays. I believe they are above $8,500 a year for an individual & $23,500 for a family. They are going to get taxed.
  • Cuts in Medicare – There is fraud and waste in medicare. An NPR debate on this revealed the following on home health care providers. Obviously home health care saves money  because it often prevents nursing home stays. Example(s) There are now @ 10,000 home health care companies – 800 alone sprang up in Houston About 1/2 of all insulin injections in homes (3 times a day) are now done in Dade County Florida. 1/2 of insulin dependent elderly or disabled diabetics don’t live there. These major anomalies show that some are CHEATING the system. The list went on.

Your Stocks Picks

Perhaps you want to put some of these in your holiday portfolio stockings. I do NOT recommend any but can give you a little fundamental and technical analysis . That said, some many like pretty good buys. Remember this analysis barely skims the surface and professional investors have a big advantage because they have banks of computers and armies of people going over each investment they make. You can see the Chart by clicking on the ticker symbol. The following are stocks that only got 1 recommendation.

  • HMIN Hotel Inns And Hotels Management – Discount hotels in China – China is growing and this is a discount hotel chain that’s growing faster. Chart shows after a rally HMIN has formed a base. If/when FXI moves higher HMIN should do even better. On chart notice all the big volume spikes on up days = bullish
  • CAAS China Automotive Systems – Another small cap China stock. Remember the Chinese now buy more cars than Americans. Small caps usually outperform in any rally. This chart is pulling back to its 5o day moving average and that is a buy the dip opportunity.
  • VPRT Vistaprint - You happened to picked the company that does my business card’s.  My wife thinks they are the best deal out there. Chart shows and a rising blue line (50 day moving average) and that’s always good. A recent dip makes it a buy the dip opportunity. Volume getting weaker is not a good sign.
  • SHOO Steve Madden – Shoes – Apparent the shoes to buy right now. Again lots of those green volume spike bars on chart. This shows some institutions are buying
  • FSLR . First Solar – Solar technology and building a huge plant in Mongolia (China) Just about every analyst who follows alternative energy has something to say about FSLR. Chart not in clear upward trend as above 4 stocks. Perhaps a good buy because of China connection but right now weak technically
  • GE - General Electric Industrial giant – Basically, so big it follows US markets. Chart shows consolidation pattern right now. Under performing US markets right now.

Ran out of time – more tomorrow – For those of you who love the danger of individual stock picks the top 4 should do well if markets move higher.

KISS & Stocks

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow +0.83% down
NASDQ +1.28% down
S&P500 +1.05% down
Russell2000- +1.32% -

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

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

Technicals, Fundamentals & Analysis

Stocks are rising despite a rising dollar. We almost had a significant rise in both the dollar (+0.41% ) and a barely significant (above 1.00% ) rise inmost major stock indexes. Volume decreased.  Yes this a market that is NOT making new highs (NASDQ & S&P 500) in GROWING volume.  That’s troubling and indicates an expanding bubble – unless we can grow volume.  However the relationship between the dollar and stocks is breaking down in a positive manner for stocks. They are both RISING = Bullish for stocks

McClellan Oscillator at +25 (see below) gives us some wiggle room for stocks to move higher before we reach overbought levels of +60 = Santa Clause Rally caps

FEARLESS FORECAST Again, Up to flat week . Lobbyist for health care & insurance companies have won  Their stocks should lead market higher. Dollar may take a breather before climbing again.

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& China) . -104 yesterday. Clear mid term bearish trend accelerating. Long term trend since late last year still bullish (see chart)

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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 +0.41% . Anything close to or over +/- 0.50 is significant. Over 1% HUGE The dollar closed at $77.75

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 +25.17 This is a little Overbought 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

Positions

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

These are positions I actually own

ETF’s and Trades

SELLING & BUYING

Positions section of blog was updated over weekend.  44+% Invested in stocks -

  • FXI (China) 18% (selling 6% into any rally – 24- 6=18% – see Friday’s update)Still holding on
  • EWZ (Brazil 16%)
  • MOO (agriculture (10)%

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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