WaltKelly Pogo 1964-03-08 96.jpg

I think it was Pogo in the old Walt Kelly comic strip who said it first “I’ve seen the enemy and it is us.”

It Just Gets Worse – Gulf Oil Spill

The NYT is headlining that the size of the spill has been seriously underestimated (Perhaps 4 to 5 times larger) & drilling was allowed in Alaska/elsewhere without permits

Whistleblowers, BP hiding data, BP not following regulations, a giant oil  & More from Big Oil Spill Page

Perhaps, the most alarming or sensationalized news is in the following from Dan Froomkin at Huffington Post -

A new analysis of sea floor video indicates that nearly 70,000 barrels could be gushing out every day, NPR reports. That figure is at least 10 times the US Coast Guard’s original estimate of the flow, and “the equivalent of one Exxon Valdez tanker every four days.”

Bottom Line - The technology may be revolutionary and work, but human error and greed always are factors not entered into the equation. This does changed the balance on everything from drilling off shore to nuclear power for me. (more later) You just can’t mess with Mother Nature. The only way to ensure people play by the rules is to have a strong, (if it has to be) big, tough government that enforces these rules.

If our politicians protect shadow financials or any shadow company (BP) – they should be voted out of office.  All we have now seems to be crony casino capitalism.

KISS & Stocks (Keep It Simple Stupid)

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


Index Percentage Volume
Dow -1.05% flat
NASDQ -1.26% flat
S&P 500 -1.21% down
Russell 2000 +0.87% -

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

Technicals, Fundamentals & Analysis

Stocks moved significantly lower in weak, below average volume. Because volume was weak = NEUTRAL

From Yesterday - All week long the 50DMA of the benchmark S&P 500 has been mentioned as a key resistance level = RED light for markets.

What happened yesterday - Stocks again bumped all day against the 1173 S&P resistance level. It became evident that the S&P 500 was going to not break out. At 3:00 PM EST  all the major institutions came in and sold driving the market down toward its key @1150 support level. S&P ended day at 1157.44. Closing at low = Bearish

If we close below 1150 today = Bearish Therefore 1150 is the line in the sand to watch.

The increased size of the Gulf oil Spill is going to be along term negative on most stocks, if the new analysis turns out to be correct = Bearish

European stocks down @ 2% this AM. = Bearish

Shadow banks seem to be winning the financial reform battle = Bullish

Significant Indexes

  • McClellan Oscillator fell to -29.08 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is NEUTRAL territory.
  • US Dollar – rose +0.63% yesterday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important Dollar Rules because it broke out to new high is a significant move. = VERY BEARISH
  • The BID – Kept climbing. It has broken out to a new 5 month high. The Baltic Dry Index measures the cost or flow of goods/trade between countries. This is positive for export countries like Brazil and China and commodities. Goods costing more means trade is increasing. One analysis of this is shipping costs are rising because of Gulf oil spill. = Neutral


The  Positions Section = latest buys and sells  - These are positions I actually own

Sold ( took profits in) 1/2 of Investors411 positions in TYH yesterday when it became evident that we were NOT going to break out in the S&P 500.

Time to take some profits, especially if you did not yesterday. (no one goes broke taking profits)

  • The dollars breakout move yesterday is very bearish in the long term.  The dollar is rising because the Euro is falling.  Most analysts I’ve heard expect this breakout to continue.
  • The McCellan Oscillator is in NEUTRAL territory and has a ways to go before -60 or even lower. It did get down to -123 last Friday . Do not believe  we will reach those levels again soon. But, the dollar is acting like an anchor on any stock advance.

Traders sell at open and/or wait for a rally.

Again the major tipping point is a drop below S&P 1150 support. Perhaps it will hold, but if the dollar keeps moving higher the best US stock will do is move sideways.

China FXI is going nowhere.  As mentioned earlier this week it is a canary in the coal mine stock.  This canary over the last few days did not rise as fast as US stocks. Therefore it has started to chirp. FXI is one position Investors is going to sell today.

Yesterday @ 5+% was taken off the table (see Positions) & will do another 5 to 10+% today.  That total will be up to 1/2 of what was recently invested.

We can buy back in when the McClellan reaches a lower level. Obviously I could be wrong, but the dollar’s move is significant.

GLD is looking good to buy on dips.

Long Term Outlook = NEUTRAL


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