WHAT’S UP? – Two unsung Heroes -Health Care Rescourses – Bears with stock market football – Our stock positions (some recommendations) – Oil prices breakout – Shadow Banks – Profiles in courage.

 

Two Unsung Heros

This year two outstanding women won the Profile’s in Courage Award given out by the JFK Presidential Library. 

Shelia Bair – (google photo)

Bair is the head of the FDIC and a Republican.  She opposed many aspects of the Paulson/Geithner shadow bank bailout. She was “the lone voice in the wilderness for her early warnings about the sub prime lending crisis.” She like Elizabeth Warren stands out as a voice of economic dissent in the Obama administration. For more see Bob Kuttner’s editorial

Brooksley Born – (Google Photo)
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Born stands out because as head of the Commodity Futures Trading Commission she warned that “unchecked trading in the credit markets could lead to disaster.”  You can read more about Born and her famous fights with Alan Greenspan from the Sanford magazine
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HealthCare

The fight for a better heath care system is obviously heating up. Two ways you can make a difference 
  • MoveOn.org has teamed up with Dr. Howard Dean to raising $ to fight for heath care. You can hear Dean’s address here
  • Barack Obama has also asked for folks to sign up, tell their stories and/or donate. You can do so at this link.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index Percentage % Volume
Dow -0.62% up
NASDQ -0.39% up
S&P500 -0.51% up
Russell2000 -0.79% -

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Technicals & Fundamentals 

The losses might seem small, but the major US indexes were up almost 2% in the early afternoon. That’s a big drop into the close. Much bigger than yesterdays last hour plunge.  What’s worse is that Volume increased and was above average. Therefore volume confirmed the move lower.

XLF - The ETF that tracks financials (mostly shadow banks ) fell -2.66% . This index closed at 11.72. As stated in past updates for the last 3 weeks financials have been trading between @ 13+ and @11+ (more specifically support at 11.33 and resistance at 13.08) Any close above or below these support of resistance levels would turn confirm a longer term trend for bull or bears.

WTICOil prices confirmed their breakout above $60 and ended the day +3.23% at $62.04. Energy related stocks kept the rest of the US markets from loosing more ground. As stated before – Higher oil prices are an indication of economic recovery, but also hurt that recovery because it means energy prices will rise.

Reading The Tea Leaves - For more than a week volume has not given us a signal as to the direction of the markets. It did yesterday. Two or three high volume meltdowns can turn the direction of stocks.  The football is now with the Bears. Watch the XFL. If it breaks down through its support level and closes significantly below 11.33 in big volume, then you will probably see more damage to markets. Also 891 in the S&P 500 is another critical support level.

Positions - (See positions section of blog for more)

Long Term Investors 

  • Looking to increase positions in gold (GLD
  • Waiting to get back into Brazil (EWZ) on dips.  Right now Brazil’s 2 main exports coffee and oil are at multi month highs. 
  • GEX (alternative energy) is running higher with the move in oil.  It too broke out to a new 6 month high. Best read of tea leaves is the move in oil above $60 is unsustainable and both (GEX & WTIC) will fall. You can take some profits here especially if you bought the dip around $15 to 18. GEX closed at $25.67 and hopefully buy back in on a dip. 

Shorter term traders - 

 

  • Personally, if I had the time, I would probably trade any drop of the FNX to its support level. 

Long Term Outlook = NEUTRAL

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING !

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