The Patriot Tax

Congressman David Obey (D. WS.) has called for a graduated war tax on all but military families. It’s long past time we went back to making war a shared sacrifice.  Now, we have those who put their lives on the line while phony patriots go to Disney World. Let’s have some real “support” for the troops. Story LINK

Others with more power in Congress are also interested in “a share the sacrifice” tax legislation Story LINK

Unfortunately, It sure looks like Obama plans to send 30,000 to 35,000 more troops to Afghanistan according to many sources. Financial Times LINK

What if at the same time Obama announces nation building in the narco country of Afghanistan he announced a Patriot tax.

Mexico vs. Afghanistan

  • Afghanistan’s GDP is $10.2 Billion according the world Bank
  • Mexico’s GDP is $1,009 Billion
  • Afghanistan’s #1 product is illegal drugs and Mexico’s #2 product is illegal drugs.
  • Mexico directly employs 450,000 , and indirectly millions in its $25 billion illegal drug industry.
  • 14,000 Mexicans have died in last 3 years over drugs and who know how many  American have died directly and indirectly from their drugs or drug war.
  • The giant Oil (Mexico’s #1 product) field offshore in Mexico is running out of oil and the Mexican drug problem is growing.
  • Corruption abounds in both countries and many accuse the Mexican army of taking sides (one drug cartel over the other) in the drug war
  • 17 of Mexico’s 31 states are deemed “narco” states.
  • Mexico is on our boarder and Afghanistan is the other side of the world.

Americans are dying today from Mexican drugs and drug wars. The Taliban that we are fighting did harbor alQaeda (perhaps 100 left in  Afghanistan) but they are in no way a clear and present danger to the USA. They are not killing Americans outside Afghanistan/Pakistan.  As the drug problem grows in Mexico millions of Mexicans are going to continue to flee the violence & poverty and come to America. You think illegal immigration is a problem now? – Wait.  Which is the greater threat Afghanistan or Mexico?

See story (facts on Mexico from his article) – The Boarder Of Madness , by Philip Caputo in this month’s Atlantic. The Fall of Mexico LINK

KISS & STOCKS

Keep It Simple Stupid

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 -0.16% flat
NASDQ -0.31% down
S&P500 -0.05% down
Russell2000 -0.37%
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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

Dollar flat = stocks flat

Volume was again anemic. Checkout the chart of the benchmark S&P 500 over this month (on right side of blog) and since early this summer. You’ll see as stocks rally the volume drops.  Volume has NOT worked as a forecasting tool over this period.  But over time/long term it is a clear indicator that fewer people are willing to invest more money in stocks.

Remember the story of the Frog slowly being boiled in water . He doesn’t know what’s happening. The decrease in volume as stocks rise makes me feel like that frog.

However, our Mantra remains - the dollar is dictating stock direction. Its also a dominant factor holding up economic recovery.

FEARLESS FORECAST – Up Week

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 has broken out to new yearly high

The BDI fell -77 points yesterday and closed at 4340. The up 16 days in a row streak has been broken. Technically  the BDI broke out through its major resistance level 4291 (this year’s high)  The BDI has rallied about 2100 points since late September. 3 down days in a row.

What it means – Long term we created a higher high on the chart = Bullish. Short term we are on the way down = 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 .

$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 an insignificant +0.01 yesterday. The dollar closed at $75.12 .  As the chart shows in late Oct the dollar fell $7500 and in mid Nov. went a bit below that.  Again,this is directly above the $75.00 support level.

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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 -5.67 This is a NEUTRAL Position – stocks are neither oversold or overbought in the short term.

Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell

Positions

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

I did get a chance to do some editing in the Positions Section of the blog. ( Note 2 added positions)

Some stocks to consider (almost all for short term traders ) I’ve chosen shorter term charts (3 to 4 months), because these  would be shorter term trades.

AAPL – Apple Computer LINK to chart – Its got complete line of hot products that sells word wide & relatively great earnings report. Missed a buy the dip opportunity near Nov.1.  Would buy the dip or when McClellan Index gets to around -60.

GOOG Google – LINK to chart – Along with AMZN & AAPL it makes up a trinity of leading big cap tech stocks. Hit new high yesterday. Too high to buy now.

MS & GS – Morgan Stanley & Goldman Sachs – MS chart & GS chart These giant shadow banks are had their risk socialized by taxpayers – their competitors didn’t and many have failed.  More business for them. Great profits because they can borrow $ for almost nothing. They have dipped, but overall McClellan Index is neutral. If McC were oversold I’d buy.

BIDU – Bidu - BIDU chart – China’s Google.  If you want to play china and are willing to take bigger risks this company is for you. Buy the dip. Too close to new high right now.

FEED & SEED – AgFeed Industries & Origin Argitech  FEED chart & SEED chart. Have not had time to know what caused the explosion in price & volume of these two stocks over last two days.  However, if you gamble and love risk – buy the first two day dip. Pure technical play.

Long Term Outlook - We are on the cusp of change between CAUTIOUSLY BULLISH and NEUTRAL for stocks.

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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