Europe

• The Bears Case - Europe (the world’s largest economic block) has a huge fiscal crisis with no apparent solution.

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• Technically APPL’s chart is much better than AMZN. The later in free fall.

• Exit strategy – Exit 1/2 the trade with  5+% gain. Let the rest ride.

More in comments section or tomorrow’s blog.

Last Post For This Week

Disaster Capitalism

Disaster Capitalism [LINK to video]is a term used by Naomi Kline. JS in the comments section of the blog calls it “creative destruction.”

You create an economic disaster. and use the disaster not fix the causes of the problem, but to create a new economic structure.

• Trillions spent on foreign wars
• Trillions spent to fix disaster created by shadow banking system (bailouts, QE’s, Stimulus.etc)
• Trillions spent on Bush tax cuts that give great benefits to wealthiest Americans

The bait and switch -  The current case is, obviously, to obsess on the debt and ignore the clear and present economic and jobs crisis

The corporate oligarchy uses disasters, their media, their lobbyists who own politicians to enhance globalized corporate wealth and devastate Main Street America.  The debt crisis provides a perfect cover for this to continue.

A Supposed American Icon Apple Computer

Example - Wildly profitable AAPL has been expanding massively in China. Foxconn,  the largest manufacturing company in the world and of AAPL products treats people like machines.

• AAPL, while we have been fixated on wars and economic crisis, has been steadily outsourcing  jobs mainly to Foxconn and other foreign entities.

• Labor is a fraction of the price, there are no pensions, no health care, and no benefits.

• The Chinese peg their currency 50% of the USA’s. We have a 2.5% tax on Chinese goods and they have a 25% tax on our goods. This gives a huge added incentive to manufacture in China. All our polls allow this because they are dominated by the corporate oligarchy the profits from this.

The end result in a post Steve Jobs Apple will be moving even the corporate headquarters to China, because that’s where all the jobs and new consumers will be.

In the short term, globalized companies may take a hit if the US defaults, but this will also give them cover to send more jobs abroad or force the same economic conditions on US workers that the Chinese have.

These actions (from outsourcing to trade/tax policies) are being repeated by all major globalized US companies with the help of the vast majority of US politicians including POTUS.

How you can adapt to creative destruction/disaster capitalism – Learn Mandairin and how to bow to Chinese/corporate masters.

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A better example would have been the bait and switch of US shadow banksters, but Investors411 has covered this topic many times.

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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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Technicals, Fundamentals & Analysis

Shorter Term Outlook.

day/days/week

• AAPL, up eight days in a row, is almost singlehandedly kept US stocks solvent. Nothing goes up forever and AAPL is due for a correction.

• Two of our most successful technical forecasting tools listed below – Of course the big dog out there is the debt crisis in DC. It trumps everything. If there is some favorable resolution for Wall Street (It may NOT be favorable for Main St) The lower the MO & dollar go the bigger the rebound higher for stocks.

• The McClellan Oscillator (MO) chart fell to -36.58(-30 somewhat oversold, -60 oversold, -90 OMG oversold). We are somewhat oversold in the short term. The June low for the MO was @-70. Current Level = Neutral/Bullish

• $USD The Dollar fell significantly -0.80% yesterday (+/- 0.50 is a significant move and the dollar is usually a contrarian indicator) Chart shows dollar on its way to challenging the May lows. = Bullish/Neutral

• Reading The Tea Leaves - Instead of focusing on the clear and present danger – the economy & jobs, the corporate oligarchy has created an immediate debt crisis.

Longer Term Outlook

weeks, month, months

• Both Parties have drawn up last minute plans that they think help them get elected.  There may be a lot of political back slapping over some ineffective plan. The danger is this will be repeated over next years budget, and if Republicans have their way, before the election.

• This would create added uncertainty over extended period and hurt the American consumer.

• For Main Street USA the continued uncertainty will be devastating. No ones working on job creation and if you cut current government spending there will be even less jobs. How do you fix any deficit without jobs? For Wall Street the results will be negative. Globalized companies that make their profits outside the USA will profit in the long run.

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

Monday’s Headline Repeated

PROTECT YOUR MONEY

NLY - Annaly Capital Mgt. Ultra high dividend stock – This was the one stock I thought could weather what will be a repeated debt crisis storm, because during the 2008 meltdown it produced double digit returns (one of you mentioned this in the comments section)

In  my personal portfolio I have a Put position to protect NLY -

All the blow concepts  considered because of the potential of a US default.

Check the comments section of blog during day because at least one of these positions will be added to hypothetical Investors411 portfolio.

GLD & SLV – Gold is at a new high.

UDN – An ETF that shorts the dollar.

BZF - ETF that tracks Brazil’s currency. Big breakout to new highs. Major mistake not to buy this currency.

What about cash? – Realize that as the dollar falls your cash becomes less valuable relative to other currencies. Interest rates may explode if the US does not honor its debt (example Greece) This too would make your cash less valuable.

Disclaimer - Personally I own  a group of dividend stocks including NLY. I have placed puts on one ETF of a major index and a couple of dividend stocks. I buy everything in the hypothetical Investors411 portfolio.

JS in the comment section has used the term ”insurance” to describe the way ”Puts” are used protect long term investments. – email me if you want to know more or post a question in the comments section.

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Long Term Outlook (for US Economy)

BEARISH

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Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative Comments Section every day.

Longer Outlook for US stocks downgraded from CAUTIOUSLY BULLISH to NEUTRAL

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Longer Term Outlook (for US stocks)

NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

Lori Wallach

Free Trade

Whenever you hear the sale picth its Free, warning bells should go off in your head. The same is true for branding concepts like “Free” Markets and “Free” Trade.

“Free Trade” is simply a branding concept used by major corporations and their politicians (From Obama to Bush)  Let’s use a few examples -

• NAFTA the supposed free trade agreement of the early 90′s between the USA – Mexico and Canada cost the USA 879,280 jobs between 1993 & 2002.

• Our supposed free trade deal with China – We tax Chinese goods at 2.5% and they tax our goods at 25%

• Now we have a supposed “free trade” deal with with 3 more countries.  Example Panama – A global tax haven and money laundering center for major corporations/banks

Here’s the LINK to a short video by Dylan Ratigan featuring former CEO of AT&T and Lori Wallach from Public Citizen Even when you factor in the lower prices of goods from abroad the average American looses” $7,000 a year” from the 11 “free trade” agreements.

Corporate America dumped more jobs during the 2008 meltdown than any other time in history. Wall Street is recovering nicely, but Main Street America still suffers. How can Americans fix any deficit without jobs?

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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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Technicals, Fundamentals & Analysis

Shorter Term Outlook.

day/days/week

• APPL hit yet another earnings run earnings report after the market closed and is was up over 6% in after hours trading = Bullish. For those of you who think Apple is mom, USA and apple pie. 62% of Apple’s earnings come from abroad.

• Today is the confirmation day of yesterday’s rally. Holding onto the rally or making further gains is bullish. Tech giants GOOG, AAPL, IBM and others are getting showered with profits . All are adding job after job abroad

• Wall Street was sending a message to politicians over the debt crisis yesterday. Any hope of a bipartisan resolution is going to send stocks higher and a breakdown is going to send stocks lower. As mentioned two weeks ago – “If the US debt default starts to hurt stocks, politicians will fix the problem rapidly because their campaigns are all funded by an elite oligarchy of insiders.”

• Two of our most successful technical forecasting tools listed below

• The McClellan Oscillator (MO) chart fell dramatically to -13.73 (-30 somewhat oversold, -60 oversold, -90 OMG oversold. The more oversold we get the better the chance for an oversold rally) Lots of room for MO to move higher or lower = Neutral

• $USD The Dollar fell -0.35% yesterday (+/- 0.50 is a significant move and the dollar is usually a contrarian indicator) Price chart shows we are in a month+ long trading range.  For stocks= Neutral

• Reading The Tea Leaves – From yesterday “-48 on the MO, is usually a figure that oversold stocks bounce higher from. But how high and far is up to the the fundamentals of Europe and US debt.”  -14 on the MO means there is a lot of room for stocks to roam. Solid earnings in techs are bullish, but all eyes still on US congress.

Longer Term Outlook

weeks, month, months

• May 20th forecast still in effect.

• Repeat – It’s impossible to accurately predict how the politically manufactured Kabuki dance over the debt will end. Therefore, hanging in their with a NEUTRAL Long Term Forecast. However, perception slightly favors bulls.

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

NLY - Annaly Capital Mgt. Ultra high dividend stock - Has dipped down into buyable position. Caution if we do have meltdown over debt crisis this stock will take a hit.  However through 2008 meltdown it still produced a double digit dividend.

GLD & SLV – Still waiting to buy. Will announce when in comments section of blog. Their price is linked most notably to US debt kabuki dance in congress. If we achieve a rational compromise, then gold will come down to a safer level to buy.

Disclaimer - Personally I own  a group of dividend stocks (also a couple other long term investments) including NLY and have placed puts on some of them and ETF’s. JS in the comment section has used the term “insurance” to describe the way “Puts” are used protect long term investments. – email me if you want to know more or post a question in the comments section.

I firmly believe you can make money with BOTH long term investments and short term trades. See POSITIONS Section of blog for ideas

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Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative Comments Section every day.

Don’t forget to send in your stock choices fro our new Stock List #5

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Longer Term Outlook

NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

The dollar war is certainly reason to exercise some caution. I have a stop on the more speculative SSO at what I bought it for.

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.”

Going to add to positions today, hopefully on a dip. (see past Investors411 for options or look at Positions section of blog) I’d love the MO to be lower. Preferably at or near -60. But, it is to the benefit of both the High Frequency Traders (they make money with huge trades in microseconds) and the Fed to manipulate stocks higher.

• The HFT’s are not going to kill the goose that lays golden eggs for them the stock market.
• The opaque Fed actually  has the rough data on just how over leveraged the opaque shadow banks still are. The fact that the Fed is into QE 2 (QE 2 = the on the surface print and dump money – the rest is hidden and we really don’t know the grand total print and dump which is collectively easily in the trillions) says the shadows still need bailout protection.

Yesterday shortly after noon I issued the following statement in the comments section in response to one of YOUR emails “Freaking sneaky.” China, in what has to be a co-ordinated move with our Fed, unexpectedly raised interest rates. This sent the dollar higher and stock lower. It also toasted gold. Nothing changes in the long term. More later – for now see LINK

We still have the Fed willing to print & dump money, but the China move will radically alter the situation for a while. China had not risen interest rates since 2007 and this move caught everyone with their pants down. People in short positions had to buy the stock or dollar to cover their losses before those losses became to sever. Therefore the market sank.

What worries investors is China embarking on an interest rate rising cycle. Probably not, but impossible to determine. Did China toss a monkey wrench into our young bull market?

Wish these had become longer term positions than a few weeks to a month. Very sorry to get stopped out, but that’s life.

Paul R reports that YOUR stock list has improved +21.17% since Aug. 3rd. See Comments section of blog.

Couldn’t find a dump truck, but money tree will do

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

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

US Stock Markets -

An army of editorials Monday from Wall Street insiders say the mortgage/foreclosure crisis for shadow banks is “large but manageable.” ($100 to 120 billion cost figure was used as an estimate) In fact, BAC has partly dropped moratorium on some foreclosures. These editorials into the opaque world of shadow financials have seemingly calmed investors and the #1 mortgage bank (BAC) after a 10+% loss the last few days rose +3.01% in huge but decreased volume.

The Fed does what its done for well over a month and manipulated the US stocks by injecting $6.2 billion into the economy through the POMO program.  This figure has grown in recent days. The dollar rally died and stocks rose. If shadow financials are getting injections of cash like this its hard to see any crisis hurt their bottom line.

AAPL had another well above average earning report. As predicted, after up 10 days in a row investors sold the news in after hours trading and the stock was down about -5%. Apple is so big it makes up 24% of the NASDQ.

So look for a hit in techs early today. Right now it looks like NASDQ will be down -1.5% at the open.

Markets have seemingly absorbed the hit to shadow banks and will probably absorb the hit to AAPL. The quicker that happens the more bullish for the markets. Obviously stock to watch is AAPL today.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar fell -0.14% yesterday. The inverse correlation is not always perfect. A big move higher in AM was crushed. Overall trend of falling dollar trend for US stocks is = Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Fell a very minor-0.22% yesterday. An 8 week bull run, then a two week fall. A very slight stutter and now moving up. Trend  = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Rose to +10.50 yesterday. Lot of room to move both higher and lower. Momentum is with the stock bulls but location= NEUTRAL

Reading Tea Leaves.

Chaos has been restored by the Fed backing up the dump truck of freshly minted cash and dumping. This reminds everyone from Investors to High Frequency Traders the Fed is going to print and dump, print and dump, print and dump…

The MO is in neutral so there’s room to buy the dip, of a rally.

Obvious end game of printing and duping money is INFLATION.  The play investors have made to diversify and protect against inflation is into commodities like gold.

What to watch –  For Bulls -

• Does BAC continue to stabilize and/or move higher.
• Does APPL after 4 to 5% early hit stabilize and/or move higher.
• Key is still the dollar – tracking ETF is UUP

Best read of tea leaves is if foreclosure crisis couldn’t sink bulls, then AAPL earnings (maybe a bigger hit) will not sink bulls. Market is being manipulated by the Fed’s print and dump. As long as there is no end in sight for printing and dumping stock move higher.

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)

• EWS (Singapore)
• USO (price of oil/commodity).
• SSO (2x what S&P does) – Tightened stop and may sell/take profit today.

Buying dips in gold, oil, and recommended stocks still a viable option for both Traders and Investors. Commodities like gold and oil also give you diversity.

We should see a dip this AM. Perhaps throughout the day. Perhaps longer. But as long as the Money Tree at the Fed keeps growing or the Dump truck keeps dumping bulls should rule.

Any of the above are decent plays along with recommended ETF’s and stocks.  As PAUL constantly & The Critic on AAPL, reminds – don’t go chasing those stocks that have soared too far above their 50 day moving average.

Investors411 chief strategy is to look for equities that are trending higher, then consolidating (buy the dip) before the next move up

Look for Paul R’s always enlightening comments on stocks and sectors in the comments section.

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Home Sweet Home – Crisis

Systemic Crisis in Foreclosures/Mortgages?

A major crisis may be emerging from the opaque shadows of the unregulated American financial system.

Can the Obama administration, Bernanke, Shadow Banks and Wall Street push this problem back in the shadows before it dawns on an ignorant public of just how bad their getting ripped off?

Focus is on mortgage and foreclosures systems from the 2008 shadow bank/housing meltdown.

Remember, because of our over leveraged under regulated financial system your mortgage was turned into a note/bond, chopped up and sold many times (credit default swaps etc) and finally even insurance companies like AIG ended up with a big piece of the action.  Well, who exactly owns your mortgage and there were a lot of crooks (fly by night operators – many are no longer in existence) along the road to chopping up your mortgage and owning part of the action.

Throughout the legal systems people were being foreclosed on by entities that did NOT hold the legal right to do so because the mortgages had been chopped up so many times. This problem reached critical mass in the legal system and now AG’s from 50 states are investigating. (see Thursday & Friday’s Investors411)

Major shadow banks were using unqualified “robo signers” to sweep this problem away ASAP to maximize profits. But now its exploded onto a slow moving US legal system because those who were foreclosed on were being unfairly ripped off by ghost entities who claimed ownership to their house. Major question is who holds the foreclosed mortgage???? Who really holds YOUR mortgage????

Bottom Line – Shadow Banks have used inaccurate (illegal) documents to foreclose on homes. Trust issues abound in an under regulated opaque financial system. Investors could loose confidence.

Sources – In descending order of preference on this, because its really beyond my pay scale to understand – here, here, & here

Major Deficit Creator of Our Time

Obviously the 2008 meltdown. It now supersedes, on a yearly basis, the debt created by the go to war, voting for pork and cutting taxes to create a deficit that started in 2000. This made things horrible and is still in effect.

When unregulated casino capitalism exploded in 2008, we were faced with a choice of another depression or an opaque TARP, Stimulus, and most importantly an opaque Fed Reserve Bank printing who knows how many trillions of dollars.

MIT’s Simon Johnson “There Are No Fiscal Conservatives Out There” – money quote

“If you want to fix the US budget – keeping the deficit under control and bringing down the size of our government’s debt – you have to address the risk-seeking behavior of big banks.  No fiscal strategy can be credible without addressing the major problem that brought us to this point.”

The latest foreclosure crisis is another 2 by 4 over the head reminder of this.

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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

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

US Stock Markets -

Volume is returning to US markets for the last few trading days and spiked somewhat yesterday. Much of this was due to the foreclosure problem in Shadow mortgage banks, (See below and above) The Dow spiked significantly higher probably due to huge volume in Shadow Banks BAC & JPM.

Apple reports today, and as The Critic points out in the comments section it is very overbought into earnings. It would probably  take a knock your socks off spectacular earnings report to move Apple tomorrow.

Shadow Banks – There are 6 major mortgage shadow banks and they all took another big hair cut again yesterday. Two big volume down days in a row for major banks (BAC down @ 5% each day) is an enormous plunge.

The earnings report and week ahead for US markets

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar rose +o.52% yesterday. The inverse correlation is not always perfect. However Friday’s rally bearish for stocks.  Overall trend of falling dollar trend for US stocks is = Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Fell a minor -0.25% Friday An 8 week bull run, then a two week fall. A very slight stutter and now moving up. Trend  = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Fell to -1.86. Lot of room to move both higher and lower. Momentum is with the stock bulls but location= NEUTRAL

Reading Tea Leaves.

Helter Skelter – Major forecasting tools and market coherence moved dramatically in different directions.

• The Mother of all tech stocks AAPL clearly overbought in front of earnings report
• MO neither overbought or oversold and parked in neutral
• Two dramatic down days for big mortgage banks and possible mortgage/foreclosure meltdown
• Dollar took unexpected significant move higher Friday
• Major US indexes moving in different direction in big volume
• Emerging markets consolidating.

Again above my pay grade to explain why all this Helter Skelter in a detailed fashion, but I know chaos when I see it.  There’s big money to be made for the traders who guess the right direction of the market. Best read of tea leaves is down.

So many folks have been long and getting more complacent each month. Something we’ve talked about before – the VIX – shows this. So the highest risk for a big move is DOWN.

Bottom Line – There is a possibility of another foreclosure/ mortgage systemic meltdown.

We have NOT fixed the #1 cause of our growing deficits – regulating the over leveraged giant shadow banks – How can any political group can claim to be concerned about deficits and not address hidden, crony, casino capitalism in our wildly over leveraged shadow banking system ?

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)

• EWS (Singapore)
• USO (price of oil/commodity).
• SSO (2x what S&P does) – Tightened stop and may sell/take profit today.
• TYH (3x tech stocks) Sold the rest of TYH at 38.8 for @ +13% gain. Sure looks like a climax run Friday afternoon. TYH is a trade not an investment. Could re enter this trade at different time. Sorry I made a post on this Friday afternoon and it looks like it did not get posted. See comments by “The Critic” entered under Friday’s blog. It may be still up on the right side. I discussed what’s happening with several of you over weekend.

Both US & EWS will be impacted if things go South.

Time for caution for both Investors and Traders. – Time to bring out the old Lost in Space robot, with all his bells and whistles and warn Danger Will Robinson Danger Danger. 95% of this call is based on the current foreclosure crisis and understanding it is beyond my pay scale.

Look for Paul R’s always enlightening comments on stocks and sectors in the comments section.

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500

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Jobs, Jobs, Jobs

Ever since the 2008 meltdown Investors411 has stated financial and economic conditions are “far far far far far bigger than first imagined.” This statement that has been made many times and is still bolded in the position section of the blog.

Poll after poll (except among Tea Party supporters) have said “To Hell with the Deficit, Its Job, Jobs, Jobs.“ See yesterday’s Investors411 for  a list of historians and economists who make the same case less colorful language.

Immediate Help

• Extend unemployment benefits its “the human thing to do.” Republican Billionaire Mort Zukerman
• Extend unemployment because (the average American unemployment check was under $300 a week in 2009) it will stimulate the economy. These people will SPEND the money and we all benefit because money flows.
• Republican’s know that the longer they can delay a vote on this the less money will flow and consequently the more people unemployment will grow before the November elections. Every day they delay = the more votes they get in November, because they can blame Obama for unemployment.
• It’s certainly hypocritical to endorse the Bush tax cuts on the wealthy. Next vote for unnessesary war funding outside the budget for over 10 years. Then play politics because our own American families of former workers are going hungry.

Longer Term Help

• Infrastructure projects get you the most bang for the buck according to Mort Zukerman (who I usually don’t agree with) and most economists.
• We need an Independent Infrastructure Bank Not one where a powerful Senator like Democrat Harry Reid can take $350 million for a high speed train from LA to his home state of (Los Vegas)Nevada.

Bottom Line – Andy Grove, Intel’s CEO had it right – Globalization has created a major “scaling” problem in the USA. Unless we somehow change that direction the ultimate result is going to be very negative economically for the USA.

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!

Technicals, Fundamentals & Analysis

The High Frequency/Black Box traders (that are focused on the here and now) pushed the markets higher in weak trading. This has been the typical headline for many moons in what’s been a falling market since April. – Lower price highs and lower lows.

IBM was the earnings report of most interest and its down @-4% in pre market trading = Bearish

APPL – Both Monitor and Paul R have warned about today’s earnings report at close.

YOU have pretty much reached consensus that holding a stock, especially in a declining economic environment, is highly risky before its earning report. If you are an insane lover of risk (short term trader) and AAPL continues to drop before earnings – it does take some of the downside risk away.

Ruptured oil well leaking again and possible leaks on oil on ocean floor related to BP oil spill. Best site for this is The Oil Drum = Bearish

Significant Indexes-

• McClellan Oscillator (MO) rose to +21.91 [+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. = NEUTRAL
• US Dollar –  The dollar Friday was basically flat +0.04% [Anything over +/- @0.50 is significant.] The dollar is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, have used the inverse relationship of the dollar as a key part of their trading system. Earning have trumped this indicator for now & we have consolidated for last two days. = NEUTRAL
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also good proxy of China.) BDI is in free fall from a high of @4200 to 1700 yesterday. This is a huge -60% drop 8 weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI rose for the first time in 8 weeks the BDI rose Friday & +0.70% yesterday. At long last the BDI finding a bottom - a bullish sign, but too early to tell.Fundamentally the -60% drop is very BEARISH

Reading Tea Leaves-

Don’t think the negative fundamentals of the BDI (Trade and China) & Europe have been fully integrated into stock prices yet. Sure fells like we are going to have a negative day. But, with Black boxes in control (almost everyone else has fled to safer investments of bonds and treasuries) – you never know.

Positions

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

Updated over weekends Investors411 holds ONE position at this time

From Yesterday – SH – The ETF that shorts the S&P 500 was bought at 51.45. It’s up over 3% now. 1/2 will be sold at 3% profit and a stop/loss has been put in place at what it was bought for. 1/2 of SH was sold for 53.02 for +3% profit.  Letting the rest ride and will sell when conditions on MO near oversold.

No other positions long or short are contemplated in immediate future because MO is neutral. Sorry, there is little to do but sit tight,  be happy you’re almost all in cash, and wait till we get oversold or overbought.

One exception is GLD or DGL (@200% GLD). Its dipping and if it falls to its 200 DMA – would consider buying on fundamentals.

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Financial Reform

From high Frequency trading to opaque credit derivatives our financial system is broken. If we go forward with this over leveraged opaque system it would be like never fixing BP’s gusher in the Gulf. We have the Tea Party members who want virtually no government oversight to the Obama administration who keeps saying, “go softly, go softly.”

Dallas Fed Chair Richard Fisher is another whose is standing for reform.

Turkey/Israel/Gaza = Crisis

Turkey, has called for Israel to join all kinds of international inquiries into what happened. Ranging from a joint US/Israel/Turkey group to one set up by the UN. The Turkish foreign minister said, unless they accept “it shows, they have something to hide.”

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!

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

Technicals, Fundamentals & Analysis

The Bears Growled Friday. Major meltdown Friday in above average increased volume. (NASDQ volume less of an increase) = Bearish

Fundamentals behind meltdown-

• Less than expected in over hyped (by Obama administration) jobs report
• Hungary announces economic troubles
• The Big News is France“

Troubles in Europe again causing major currency shift – Euro falls and dollar to rises. = Bearish

Market Leader -AAPL - still haing in at 258 = Bullish

Technically – The area around 1040 on SPX (S&P 500) is the line in the sand. SPX now at 1065 – Beyond 1040 the Limbo Line breaks down.

Fearless Forecast Last Week – “Down Week“ Unhappily right

Fearless Forecast This Week - Down Week – See Tea Leaves section below – Basically investors fearful of more problems in Europe will have traders selling into rallies.  Partial success with Gulf spill, Central Banks propping up Euro, Government officials saying things aren’t so bad in Europe could give us an up week. But, traders will probably sell into rallies. Eventually, the Euro, China’s problems & casino capitalism will take its toll.

Significant Indexes

• McClellan Oscillator fell dramatically Friday to -30.48 [+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. Momentum down/Bearish, but in not yet oversold = NEUTRAL
• US Dollar –  The dollar rose a massive +1.20% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Massive breakout to new high is bullish for dollar and for stocks = Bearish

Reading the Tea Leaves All those former communist countries of Eastern Europe who bought into the American capitalist “free market” over leveraged, shadow system starting with Hungary are in economic trouble. France has problems and together the Western and Eastern countries of Europe have a bigger GDP than the USA. More shoes will drop before this gets better.

Its no longer a question of if but when will these shoes drop. This week, next week, next month.

Positions

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

Bought SDS (2x Short S&P 500) at 34.52 Friday. Will sell 1/2 for hopefully 5% profit. Have stop/loss at 34.52. Its contradictory, but willing to buy more in any large stock rally. (S&P rallies, this stock goes down)

Small remaining 1% positions in VCI & ESRX – Also considering selling into rally

Invetors411 main strategy remains wait for the McClellen Oscillator to fall below – 60 before going long.

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING