John Burns'

Propaganda

Remember the US government staged propaganda fabrication the beginning of the Iraq war? An event that American media endlessly exploited. They toppled a statue of Saddam in Baghdad and everything was supposed to be a triumphant victory with garlands of flowers – instead we’ve had endless war.

Glenn Greenwald has another excellent piece on American Media’s complicity in propaganda. The government or ruling oligarchy itself doesn’t have to censor – the media will do it for them. Remember how opposition to the Iraq  was beaten down by cries of patriotism. Nothing’s changed.

Repealing Health Care

The non Partisan Congressional Budget Office has put the “savings of the Obama Health Care Bill at $143 billion through 2019.” Link to story here & here. The American Public is so propagandized over the imperfect health care bill by our media most do NOT realize it would save money. Remember the Tea Party and their uber wealthy backers shouted down reasonable debate using  the biggest LIE of the year – a government takeover of health care.

So if the Tea Party & Republicans are all about cutting the deficit why are they willing to add $143 billion to the deficit as their first pice of legislation?

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KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

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Index Percentage Volume
Dow +0.27% flat
NASDQ +0.78% up
S&P 500 +0.50% up
Russell 2000 +1.18% -

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Technicals, Fundamentals & Analysis

Investors411 record - 6 years of beating benchmark S&P 500

  • Another heavy volume day. – Sure looks like some fresh money is coming back into market.
  • Yesterday – A bear raid in commodities, especially  gold & silver (see below)
  • Yesterday – ADP (independent company) comes in with a surprise outstanding gains for  jobs last month – +297,000
  • Tech general AAPL on three day breakout run = bullish
  • “schizophrenic.” pattern (from yesterday) swings back to bulls.
  • Big new is still Friday’s monthly government jobs report. +140,000 expected, but many are expecting more because of ADP data.
  • Bonds got crushed yesterday – This is bringing money out of bonds and hopefully into stocks.
  • Weekly jobs data & retail sales key fundamentals for today.

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Significant Shorter Term Forecasting Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] MASSIVE rise in the dollar yesterday +1.04%. Trend turning – For stocks = Neutral/bearish
  • McClellan Index – (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] rose slightly to +17.60 The MO has been no where near +/- 60 for two months, but the chart shows a bullish pattern of higher highs and higher lows and that’s bullish. outlook for stocks = Neutral/bullish
  • 10 year T Bill (TNX)  In consolidation pattern  Some big recent moves shows big indecision. Big jump higher yesterday,but still in range. = Neutral

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Reading The Tea Leaves

The “schizophrenic.” pattern changed back to the bulls. The bulls case got far stronger because of volume and some surprising excellent jobs data.

A Bear Raid - Mea Culpa. I got caught in a bear trap yesterday. It happens. You learn from it and move on.

As most of you know I strongly believe in setting trailing stops to limit losses. One big big secret in investing is LIMIT YOUR LOSSES.

Two days ago I recognized warned and sold a gold position. Quote from yesterday “firmly believe that yesterday was nothing more than a bunch of traders trying to panic the gold market and drive the price down, so they can buy.”

The bears were coming, but I had missed out on selling my silver ETF that afternoon. I did have a trailing stop in place. The trouble was SLV opened 2% lower and plunged.  I got stuck with a -6% loss because my stop got blown up by both the overnight drop and the rapid decline at the open.

The gold/silver bears got some more amo from the surprising ADP jobs report which sent the dollar higher and that usually pushes gold/silver lower.

Aside - I strongly believe both gold and silver will be higher in the long term. Why –  global economic circumstances continue to deteriorate (Europe, housing, slow return to job growth, a stupid war etc.) , worldwide price inflation kicks in and/or  governments especially the Fed (QE2)  increase the money supply too rapidly.  Not all these have to occur – just some for gold/silver to rise.

Bottom Line – I got caught. So what lesson can be learned. to limit losses. I almost always use a 5 to 7% stop order on everything I buy.

  • Buy the DipThe original purchase was not on a dip and therefore the losses were larger.
  • Perhaps more important check in on prices at the close of the day. If you check stocks once a day it should be near the close. If a sector or news has started momentum building then don’t wait for tomorrow because prices could open much lower.

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Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

(I do manage 6 accounts that have other positions).

Current ETF Positions. (oldest held positions listed first)(see comments section where all trades are first announced)

  • UWM
  • SLV - (Silver ETF) Got stopped out at open at 28.41 for -6% loss (see above)
  • REMX -(ETF for Rare Earth Metals) Sold 1/2 at 26.12 for +6% gain

Not a great start in ETF trading for the year – +10% in UWM, +3% in REMx (1/2 sold), DGP -3%, & SLV -6% = +4% overall

YSL#3  had an outstanding day yesterday

Under consideration

UCO -(2x oil prices) Very erratic, waiting till correction it settles.

REMX (Rare Earth ETF) - Will consider more on a dip. Paul has posted an excellent piece on Rare Earth metals in comments section. Would consider adding to position if price falls to about 24.

EWZ (Brazil) & LBJ ( 3x Latin America – majority Brazil) Obviously the later is more risky because its leveraged 3X. Waiting for larger pull back on both.

UYG (ETF that does 2x Dow financials) XLF is the financial ETF. - The major shadow banks have the backing of the US government & the Fed. The recent BAC /Treasury/Fannie Freddie decision was the latest in a long line of NOT holding banks accountable and their accounting is non transparent. Remember these are the Shadows that are behind 8 million more Americans being unemployed, the dramatic fall of housing prices and a worldwide “great recession.” Broke out two days ago and pulled back yesterday. Both overbought at this time

DGP – Will buy back into this 2x gold ETF on dip.

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Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including ”YOUR Stock List.” (YSL#3)

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!


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