Obama’s Speech

Here’s today’s lead editorial in NYT Obama needs to  “follow through — with more energy and dedication than they have shown so far.” The NYT was one of the best reviews I saw others were a lot harsher. Bluntly – great speech, but where’s the beef?

The rock and the hard place – So far BP’s stock has lost @50% of its value. You push these SOB’s too far too fast and the company disintegrates leaving the taxpayers to pick up the bill.

America’s Debt

Who is the biggest holder of America’s $13 trillion dollar national debt? Hint they hold over $5.2 trillion of it. Slide presentation on Huffington Post was a big surprise to me. The 15 biggest holders of US debt-Link here

Who holds 40% of the national debt and what does that mean?

Tea Party

Tonight at 7:00 PM EST Chris Matthew’s will have a documentary “The Rise of the New Right” on MSNBC. I suggest that you watch it on line or see it live.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary


Index Percentage Volume
Dow +2.10% up
NASDQ +2.76% up
S&P 500 +2.35% up
Russell 2000 +2.53% -

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

Another low volume major move for US indexes that crushed significant resistance levels for several of the major indexes = Bullish.

As stated before, volume has NOT been a factor in trading for many many moons.

From yesterday – “FXE (tracks the EURO) is the ETF to watch along with Spain’s EWP”  FXE was up a very significant +0.97% & Spain was up @ +5.75% along with Italy. Spain and Italy are the two largest of the European PIIGS + Hungary nations that are having debt problems.

The MO has reached Overbought territory = Bearish

The Baltic Dry Index BDI kept falling – It’s dropped well over 25% of its value in the last month. Since the BDI measures shipping rates this fall is NOT good for world trade, economics. The BDI is often a lagging indicator,. For stocks = Bearish

Significant Indexes

  • McClellan Oscillator rose dramatically to +79.56 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. You have to go back to March of 2009 to find a higher MO. Clearly  Oversold = Bearish
  • US Dollar –  The dollar again fell significantly -0.82% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important.For stocks = Bullish

Reading the Tea Leaves - The HUGE institutions that control 80% of the market ran wild yesterday. Their black box computers all gave a buy signal in front of what’s called a “quadruple witching day” on Friday – This means lots of options expire so there’s usually lots of volatility and trading. Except few outside the Mega Sharks (huge institutions) are investing or trading- so volume has dried up but not volatility.

The Mega Sharks seemed to have decided that Europe is going to be OK & will rally like the US did when Obama took office and the Fed flooded our shadow banks with $$$$. Back then the MO pushed up over +100 and stayed above +20 for 2 months as stock continued to rally.(see chart) Its now at +80.

A similar situation with the EURO could be happening. Don’t let American self centerdcenternessness get in the way – Europe total GDP is slightly larger than ours. We had another day where treasury auctions in Spain & Ireland went well. Just like they have had in the USA for over a year. Therefore, what happens there matters.

Even though we are now clearly oversold, we could see a sustained rally (couple months) develop. The dark cloud in all of this is the falling BDI.

Personally, what’s happening fundamentally does not justify, the rally. It’s Irrational, especially with falling trade (BDI). But mega giant sharks/institutions control this market and what anyone thinks outside their giant computers is irrelevant. The mega sharks control of stocks are a quantum shift from old trading patterns and rules. (best examples – volume is irrelevant & huge volatility in currency markets)


The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekend

Sold 1/2 of UUP (ETF tracks dollar) for small loss at 25.08 -2% Will probably sell rest today

Sold VCI at 38.00 for +15%

Traders+80 on the MO is the signal to sell what remains or short any rally.  See Positions section for some ideas.

Investors – Some of YOU commented (see comments section of blog) that you sold into the rally. Good idea. I’d sell into a rally today also.  No one went broke taking profits. When the MO dips down to @+30 you can nibble.

From Yesterday – “Not the technical breakout we were hoping for. Let’s wait till the resistance level actually falls to change the outlook. Maybe today .” The technical levels fell and the long term outlook = NEUTRAL

Long Term Outlook = NEUTRAL


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