Investors 411 Blog

The 2nd Maine Militia’s Gazette

To paraphrase the 2nd Maine Militia (See Nov. 17 blog) it’s not about left vs. right, Democrat vs Republican, but up versus down . So let’s take a look at a brand new news outlet only found here  at Investors411. In the style or philosophy of the 2nd Maine Militia – here’s how their paper might look.

• Headline – Crisis in Duba i – Thousands have died (from Bangladesh, Philippines, India and other poor countries) building a wealthy playground for the uber rich Arabs. A place where wealthy Americans and Iranians can rub elbows built on the backs/lives of third world labor.
• The private company that created this years hottest American holiday present the Zhu Zhu dolls/pets has just announced a proposal for three new factories. Sorry no factories in Maine or the USA – they’re all in China.
• Front page editorial-Keeping the Masses Distracted – Will someone tell us why CNBC and CBS business news feature stories are -  the selling of Michel Jackson’s rhinestone glove, the scratches on Tiger Woods face (wife or car accident) & the latest block buster teen vampire movie?  This is America Corporate media news.
• Another local bank collapses . The big shadow banks that caused the financial meltdown are getting bigger with our money while their competition – the small local Maine/USA banks continue to fail in record numbers.
• Guest editorial from Robert Reich – The 3 classes of Americans – #1 Those 25% of Americans whose kids are on food stamps, #2 those Americans who are managing, but worried about loosing value of homes & jobs #3 Those few Americans who have taken home even more winnings since 2007 like Goldman Sachs executive. LINK

Some of you may think that our fictitious Gazette is over the top. It does focus on the ugly side of globalization and unregulated wealth creation (sometimes  misnamed capitalism or free markets). It does pacifies the reader with obsessions about celebrity.  Maybe the scratches on Tiger’s face is what will solve the humanities problems and just maybe you’ll think about forming your own 2nd Maine Militia.

KISS & STOCKS

Keep It Simple Stupid

For those of you whose eyes gloss over in the stock section I’ve tried to KISS it today, but I left a little in for those who want the deeper analysis

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-1.48%	down
NASDQ	-1.73%	down
S&P500	-2.10%	down
Russell2000	-2.53%	-

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals, Fundamentals & Analysis

For the moment the Dubai economic meltdown has stabilized because oil rich Abu Dhabi has promised to bail out the over leverage Mid east playground for the ultra  wealthy.

Big predictable economic news for the week is Bernanke’s approval hearings in front of congress, Obama’s more troops for Afghanistan and the monthly jobless figure on Friday

Black Friday saw a significant increase in traffic and only a o.5% gain in sales according to early reports. reports. Today is Cyber Monday where shoppers do a whole lot of on line Xmas shopping (start of the online buying season)   These numbers are Bearish for retail stores. It probably means far more people were out seeking the bargains and they will do less shopping for the rest of the holiday buying season.

The dominating factor controlling  stocks prices continues to be the dollar.

FEARLESS FORECAST – Last week’s fearless forecast of an up week was crushed by the Dubai crisis .  Markets have rebounded from Dubai across the world and the damage seems limited in investors/traders minds. Looks like we will return to general trend of dollar down and stocks up till Friday’s job numbers. – Outloo k – flat/down week.

Coming up more on - Military escalation in Afghanistan & growing problems with Iraq. Any attack on Iraq would send the dollar higher and stocks lower . Perhaps Obama’s announcement of 30,000+ troops in Afghanistan will have same impact.

Now going to get a bit more technical

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

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI has broken out to new yearly high

The BDI fell -145 points yesterday and closed at 3994. Technically  the BDI broke out through its major resistance level 4291 (this year’s high) over a week ago.  The BDI has rallied about 1900 points since late September. Now, 7 down days in a row & through the former resistance and now support level 0f 4291.

What it means – Long term we created a higher high on the chart = Bullish. Short term we are on the way down = Bearish The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets.

——-

The Dollar is currently the #1 forecasting tool .

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

US dollar rose a HUGE +1.00% Friday . The dollar closed at $74.98 . The $75.00 support level crashed and burned on Wednesday but, T he Dubai crisis is going send money back into the dollar and out of the stock market.

——-

$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at -27.62 This is approaching an Oversold Position 

Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

I did get a chance to do some editing in the Positions Section of the blog. ( Note 2 added positions)

From Friday – Probably going to take some profits today (sell 1/3+ positions) in FXI, EWZ, GLD & all of DGP. Hopefully, will get a chance to buy back into these positions when the McClellan Index gets oversold. Personally I did sell/take profits on 1/3 of FXI & all of DGP .

Long Term Outlook = CAUTIOUSLY BULLISH/NEUTRAL

Dubai On the Brink

Dubai

Another capitalist bubble bursts , as one of the oil Rich Gulf Emirates countries has asked or 6 months forgiveness on debt.  Imagine all homeowners in USA were to skip 6 months of mortgage payments.” Like many Western consumers during the good times, Dubai gorged on debt and borrowed too much to finance a building boom that has gone bust in the downturn. ” NYT LINK

The Dubai debt  is probably between $80 & $90 billion .  Bloomberg story LINK Comparison when Lehman Brothers failed the debt was over $400 billion and a whole lot of other bigger shadow banks were in big trouble.  The US taxpayer bailed them out all the big shadow banks.  Another financial credit bubble bursting of this magnitude is obviously bad for stocks – Asian markets down  3 to 5% today.

Dubai will probably get  bailed out by Oil Rich Gulf Country capital Abu Dhabi . They have a $700 to 800 billion sovereign wealth fund. With oil above $60 they should be able to handle the crisis, and in the end Abu Dhabi and probably Saudi Arabia will gain greater control over the other 7 gulf countries.

What happens is people sell when there afraid and what they sell is those stocks, companies ETF’s that they own. So All our ETF’s are going to get hit . Forget the fact that China’s banks have said they have no exposure to Dubai Our China ETF will get hit. So will Brazil & Gold.

The Right Afghanistan Speech…

That Obama Won’t Give – Steve Clemons (The Washington Note) has an excellent speech by Tom Engelhardt . Clemons is a moderate (backs moderate Republicans like RI’s former Senator Lincoln Chaffee) and if you’ve read his work – an influential intellectual insider not a flame thrower. For Speech See LINK

Your Comments

Check out recent comments on right side of the blog Bob S. has comments on Goldman Sachs and SE on Sarah Palin including a link to a cherry picked, but scary video.

KISS & STOCKS

Keep It Simple Stupid

For those of you whose eyes gloss over in the stock section I’ve tried to KISS it today, but I left a little in for those who want the deeper analysis

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	+0.29%	down
NASDQ	+0.32%	down
S&P500	+0.45%	down
Russell2000	-0.07%	-

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals, Fundamentals & Analysis

Dubai news is trumping Black Friday today on CNBC – the financial channel this AM.

The dollar is going to explode higher and oil lower.  Stocks are set for at least a 2+% fall at the open.  The real question is what happens on Monday after we see US stocks fall perhaps 3% today.  The Dubai crisis will clearly take time to see just how extensive the fall out will be.  Although much smaller than the US debt meltdown last fall we don’t know the extent of the damage.

When investors don’t know they sell.

Now going to get a bit more technical

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

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI has broken out to new yearly high

The BDI fell -115 points yesterday and closed at 4340. The up 16 days in a row streak has been broken. Technically  the BDI broke out through its major resistance level 4291 (this year’s high)  The BDI has rallied about 2100 points since late September. Now, 5 down days in a row. through the former resistance and now support level.

What it means – Long term we created a higher high on the chart = Bullish. Short term we are on the way down = Bearish The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets.

——-

The Dollar is currently the #1 forecasting tool .

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

US dollar fell a HUGE -1.17% Wednesday. The dollar closed at $74.24 . The $75.00 support level crashed and burned. The Dubai crisis is going send money back into the dollar and out of the stock market.

——-

$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at +16.74 This is a Slightly Overbought Position – stocks are neither oversold or overbought in the short term.

Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

I did get a chance to do some editing in the Positions Section of the blog. ( Note 2 added positions)

Probably going to take some profits today (sell 1/3+ positions) in FXI, EWZ, GLD & all of DGP. Hopefully, will get a chance to buy back into these positions when the McClellan Index gets oversold.

Remember, the record shows over the years I’m a much better ETF (stock) picker than market timer . It’s easier to identify a long term mega trend and harder to time it exactly. Events like Dubai are, for me, unpredictable.

If you are a long term investor you may just want to hold onto positions.

Long Term Outlook = CAUTIOUSLY BULLISH/NEUTRAL

The Patriot Tax

Congressman David Obey (D. WS.) has called for a graduated war tax on all but military families. It’s long past time we went back to making war a shared sacrifice.  Now, we have those who put their lives on the line while phony patriots go to Disney World. Let’s have some real “support” for the troops. Story LINK

Others with more power in Congress are also interested in “a share the sacrifice” tax legislation Story LINK

Unfortunately, It sure looks like Obama plans to send 30,000 to 35,000 more troops to Afghanistan according to many sources. Financial Times LINK

What if at the same time Obama announces nation building in the narco country of Afghanistan he announced a Patriot tax.

Mexico vs. Afghanistan

• Afghanistan’s GDP is $10.2 Billion according the world Bank
  
• Mexico’s GDP is $1,009 Billion
• Afghanistan’s #1 product is illegal drugs and Mexico’s #2 product is illegal drugs.
• Mexico directly employs 450,000 , and indirectly millions in its $25 billion illegal drug industry.
• 14,000 Mexicans have died in last 3 years over drugs and who know how many  American have died directly and indirectly from their drugs or drug war.
• The giant Oil (Mexico’s #1 product) field offshore in Mexico is running out of oil and the Mexican drug problem is growing.
• Corruption abounds in both countries and many accuse the Mexican army of taking sides (one drug cartel over the other) in the drug war
• 17 of Mexico’s 31 states are deemed “narco” states.
• Mexico is on our boarder and Afghanistan is the other side of the world.
  

Americans are dying today from Mexican drugs and drug wars. The Taliban that we are fighting did harbor alQaeda (perhaps 100 left in  Afghanistan) but they are in no way a clear and present danger to the USA. They are not killing Americans outside Afghanistan/Pakistan.  As the drug problem grows in Mexico millions of Mexicans are going to continue to flee the violence & poverty and come to America. You think illegal immigration is a problem now? – Wait.  Which is the greater threat Afghanistan or Mexico?

See story (facts on Mexico from his article) – The Boarder Of Madness , by Philip Caputo in this month’s Atlantic. The Fall of Mexico LINK

KISS & STOCKS

Keep It Simple Stupid

For those of you whose eyes gloss over in the stock section I’ve tried to KISS it today, but I left a little in for those who want the deeper analysis

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0.16%	flat
NASDQ	-0.31%	down
S&P500	-0.05%	down
Russell2000	-0.37%	-

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals, Fundamentals & Analysis

Dollar flat = stocks flat

Volume was again anemic. Checkout the chart of the benchmark S&P 500 over this month (on right side of blog) and since early this summer. You’ll see as stocks rally the volume drops.  Volume has NOT worked as a forecasting tool over this period.  But over time/long term it is a clear indicator that fewer people are willing to invest more money in stocks.

Remember the story of the Frog slowly being boiled in water . He doesn’t know what’s happening. The decrease in volume as stocks rise makes me feel like that frog.

However, our Mantra remains - the dollar is dictating stock direction. Its also a dominant factor holding up economic recovery.

FEARLESS FORECAST – Up Week

Now going to get a bit more technical

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

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI has broken out to new yearly high

The BDI fell -77 points yesterday and closed at 4340. The up 16 days in a row streak has been broken. Technically  the BDI broke out through its major resistance level 4291 (this year’s high)  The BDI has rallied about 2100 points since late September. 3 down days in a row.

What it means – Long term we created a higher high on the chart = Bullish. Short term we are on the way down = Bearish The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets.

——-

The Dollar is currently the #1 forecasting tool .

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

US dollar rose an insignificant +0.01 yesterday. The dollar closed at $75.12 .  As the chart shows in late Oct the dollar fell $7500 and in mid Nov. went a bit below that.  Again,this is directly above the $75.00 support level.

——-

$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at -5.67 This is a NEUTRAL Position – stocks are neither oversold or overbought in the short term.

Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

I did get a chance to do some editing in the Positions Section of the blog. ( Note 2 added positions)

Some stocks to consider (almost all for short term traders ) I’ve chosen shorter term charts (3 to 4 months), because these  would be shorter term trades.

AAPL – Apple Computer LINK to chart – Its got complete line of hot products that sells word wide & relatively great earnings report. Missed a buy the dip opportunity near Nov.1.  Would buy the dip or when McClellan Index gets to around -60.

GOOG Google – LINK to chart – Along with AMZN & AAPL it makes up a trinity of leading big cap tech stocks. Hit new high yesterday. Too high to buy now.

MS & GS – Morgan Stanley & Goldman Sachs – MS chart & GS chart These giant shadow banks are had their risk socialized by taxpayers – their competitors didn’t and many have failed.  More business for them. Great profits because they can borrow $ for almost nothing. They have dipped, but overall McClellan Index is neutral. If McC were oversold I’d buy.

BIDU – Bidu - BIDU chart – China’s Google.  If you want to play china and are willing to take bigger risks this company is for you. Buy the dip. Too close to new high right now.

FEED & SEED – AgFeed Industries & Origin Argitech  FEED chart & SEED chart. Have not had time to know what caused the explosion in price & volume of these two stocks over last two days.  However, if you gamble and love risk – buy the first two day dip. Pure technical play.

Long Term Outlook - We are on the cusp of change between CAUTIOUSLY BULLISH and NEUTRAL for stocks.

Long Term Outlook = CAUTIOUSLY BULLISH

Afghanistan

US ambassador, former general/commander in Afghanistan, Karl Eikenberry , has “deep reservations ” about sending more troops to Afghanistan. His major objection is corruption in a country’s whose #1 economic product is opium. LINK & LINK

Finally a major columnist has drawn a comparison between spending money on heath care vs. spending money in Afghanistan . NTY’s Nicholas Kristof argues -  are we “better off spending that money blowing up things in Helmand Province or building up things in America.” LINK Lack of health car kills about 45,000 Americans a year and the Taliban in Afghanistan have not exported their violence to the USA.

Sherwehe points out in comments section of the blog LINK 2,200 0f those are veterans who lacked health care according to a Harvard study. If the current figures hold up “This year more veterans will die from suicide than will die on the battle field.” and “800,000 vets live on the street. “

As pointed out before the major problem is Pakistan – 5/6 time the population of Afghanistan and a nuclear power. According to polls and DAWN (leading English speaking Pakistan paper LINK ) views of Americans are deteriorating rapidly.

Bottom Line – We simply can no longer afford to keep nation build around the world. Investors should note this is just another reason to invest in countries that are focused on building their middle classes instead of nation building opium rich country’s like Afghanistan.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	+0.43%	down
NASDQ	+0.74%	down
S&P500	+0.50%	down
Russell2000	+0.98%	-

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals, Fundamentals & Analysis

Dollar rose an anemic +0.07% , & US equities actually managed a minor rally in anemic volume.

The BDI is on fire. (see below) This is very positive for world trade, commodities, and an indicator China is buying.  In the OVERVIEW section of the blog PEAK OIL is mentioned as one mega trend impacting economics and stocks. You might consider peak oil as subset of commodities . As world population and middle classes in emerging markets grow the finite amount of commodities become more expensive.

Patten developing – On Thursday market’s fall in expectation of weekly jobless number and stocks rise on Monday – because of some merger.

The longer the dollar holds above its support level the stronger support becomes.

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI is @ 13% off its high (early June) Before that it gained almost over + 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI rose a VERY significant +133 points yesterday and closed at 3748. Up 11 days in a row. A higher high price on its chart pattern has been confirmed The BDI has rallied about 1600 points since late September. =  Bullish for stocks & world trade right now. Especially good for our positions in FXI & EWZ

——-

The Dollar is currently the #1 forecasting tool .

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

US dollar was basically flat +0.07% yesterday. The dollar closed at $75.10 .  This is directly above its, line in the sand, support level. As predicted yesterday – “ Usually a major support level at least temporarily halts any fall.”

The next important resistance level for the dollar is the falling 50 day moving average (blue line on chart). This is at $76.32 this AM . The support level is  a t @$75.00 Both are important lines in the sand. A breakout on either side will move US equities in the other direction and the world will follow.

——-

$NYMO The NY Stock Exchange McCellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at +16.70, – Not yet oversold, but moving in this direction,

Key to chart – 0 is roughly  neutral and when you get to @ +60 you are overbought and approaching -60 you are oversold. Buy at oversold and sell at overbought. Nothing is absolute in this chart. In fact using the moving averages as a central point is better than using zero. Nothing is absolute about the minus or plus 60 number either.

Oversold conditions = buy

Overbought positions = sell

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

Sorry have not had a chance to update Positions section in over a week

Investors

FXI – China – (now 25% of portfolio) At new high – up over 50+% this year

EWZ- Brazil – (now 20% of portfolio) At new high – up over 100+% this yea r

GLD (now 11% of portfolio) At new high – up over 20+% this year

Comments – NOT the time to buy or add to these positions.  Enjoy the rally.

Going to add Indonesia & Vietnam ETF’s – but waiting for dips. Also going to add DGP (this ETF does about 2x what the GLD does) – More explanation later. As a trade like GS. Again, waiting for dips

Traders (short term plays) These are not ETFs, but individual stocks

Extra Note of Caution here – Even though I always warn you AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING! please note I’m far less confident in individual stock picks

NVS – (5% of portfolio)  We’ve already sold 1/2 of this for +12% gain  Now up 16+% since bought

CSCO – (5% of portfolio) Flat since we bought position a few weeks ago . – Going nowhere while markets have moved higher.  Selling soon for @ -1% loss – Hopefully into a rally. Sold 1/2 yesterday for -1% loss

AMZN – (now 5% of portfolio  ) Bought last Wednesday – Sold 1/2  for 11% gain . Like NVS letting the rest ride .

Long Term Outlook – The dollar looks like it may break down through major support and the benchmark S&P 500 is on the verge of a yearly high – Outlook will change to CAUTIOUSLY BULLISH if/when this happens. Instituted change, but subject to change

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Iran

What was supposed to be demonstrations marking the 29th anniversary of the Iranian revolution turned into a night and day that members of the Green Revolution let their voices ring out. Professor Juan Cole’s website has details and video. Its heatening to see so many protest (“huge crowds”) despite those that have disappeared into Ahmadinejad’s Iranian prison system. LINK

Vietnam & Iraq/Afghanistan – Optimism

Even though many including this blog have focused on the negatives surrounding the “unjustified” invasion of Iraq and long term consequences,there are some major reason for long term optimism.

In Vietnam we used chemical weapons (agent orange) carpet bombing and even resistance was slow to organize. These weapons were not used in Iraq. Democracy was insisted on by Sistani (the #1 Shia religious leaders) and after a year of demonstrations the US relented. In Afghanistan the poll numbers have already turned negative LINK This poll was before the election debacle.

In no way does this excuse our growing nation building disaster in the Mideast under Bush and Obama. But, it is a long term ray of sunlight in an otherwise dark cloud.

US Elections

Republicans won two governorships in NJ and VA formerly held by Dems. The Dems won a congressional seat in NY – formerly heavy Republican district.  Overall a better night for Republicans and bottom line is about the economy.  Three out of mainstream observations

• NJ Democrat Gov. candidate was a mucky muck at Goldman Sachs.  GS & Wall Street are loved about as much on Main Street as the New York Yankees outside NY metro area.
• The “conservative” running in NY congressional race considered radical right wing FOX commentator Glenn Beck “his hero.”  He had huge support from the “tea bagger” or dominant wing of the Republican party.
• Long time incumbents spent huge money and had difficulty getting elected – example mayors Bloomberg in NYC and Menino in Boston.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0.18%	down
NASDQ	+0.40%	down
S&P500	+0.24%	down
Russell2000	+1.46%	-

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals, Fundamentals & Analysis

This is the last post for the week

Friday’s jobs report is the news for the week .  What we have is an oversold market going nowhere. Wall Street term for this is “churning.” Because we are so oversold a good jobs number (loss less than 200,000) would probably move market higher.  Oversold also limits downside risk.

Best Read of Tea Leaves – We will not get a sub 200,000 number.

For traders – A high unemployment figure means the stimulus will keep flowing  and I’d buy the dip. Even though everyone is watching Friday’s employment figure – keep an eye on the dollar. If we have a significant break through of the resistance level expect a meltdown in stocks as the dollar rises.

In Asia and Europe oversold markets rallied last night, so this could carry a positive bias to the USA today.

FOMC meets to day – expect no change.  Any changes in wording would be negative and a shock.

The Dollar War - (Part 2) The big news of the day was India buying $6.7 billion dollars worth of gold from the International Monetary Fund. This is an investment in gold not dollars. Still, obviously central banks did buy enough dollars to halt any dollar decline yesterday.

FYI - Best 25 preforming stocks since Obama’s election LINK

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI is @ 24% off its high (early June) Before that it gained almost over + 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI rose a significant +62 points yesterday and closed at 3247. The rate of change is diminishing slightly. A higher high price on its chart pattern has been confirmed The BDI has rallied almost 1100 points since late September. =  Bullish for stocks & world trade right now

——-

The Dollar is currently the #1 forecasting tool .

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

US dollar rose a modest -0.12% yesterday. The dollar closed at $76.33 . The dollar did briefly rise above its 50 day moving average.  The dollar is technically doing what prices do in front of major resistance/support levels – hesitating. The longer it hesitates the better the chances for reversal.

From yesterday – The next important resistance level for the dollar is the falling 50 day moving average (blue line on chart). This is at $76.67 this AM . So dollar is only 0.34% away from major resistance. It’s the line in the sand – Best read of the tea leaves is that it will hold. In fact, Investors411 will add to some positions  as we get close to this resistance level.

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

Our major core positions into weekend. (See Monitor’s post in comments section)

NB  – These core positions have been long term positions for years and are STILL OUTPERFORMING the benchmark S&P 500 – For more see overview section

GLD – Gold rose a significant 2.41% and broke out to a new all time high in huge volume. This was based on the news of India buying a huge hunk of the shinny yellow stuff. (buy the dip)

EWZ – Brazil – has gone up too far too fast and was overdue for a correction. (see past updates)It had about a 10% correction (see chart) and its 50 day moving average is acting as strong support.  Think those of you who bought the dip will be rewarded in the long run.

FXI – China -  too recetly had almost had a 10% correction, another buy the dip opportunity.

Both China and Brazil could go lower if the jobs number is bad or the dollar rises too high. They go down faster than US markets, but rise much faster than US markets. The BDI recent move higher is favorable for both.

Considering diversifying into Indonesia & Vietnam ETF’s Also, for traders as an individual stock AMZN – great technicals& fundamentals, but also a swine flu play. If the flu ends up keeping folks housebound AMZN should profit. (more on Monday) It is currently dipping.

Concerns – 10 even 20% corrections are healthy for FXI and EWZ in the long term. Yes, these and other emmerging markets are recovering fundamentally far faster than the USA. But anything that goes up to too fast forms a bubble and they burst.

SPX – Selling entire position as soonas I get back from art show – taking profits and freeing $ for other investments.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Pakistan

Many of you have raised public and private comments about America’s desire to have a colonial empire. (see comments section of blog) I certainly wish these countries had a functioning democratic system, but it can’t be forced on them and that force has proven counter productive and enormously costly for the USA. (see yesterday’s enlightening Tom Friedman’s editorial) LINK

One of you told me a deeply disturbing story of a Pakistani couple (two doctors) who have their green cards and just returned from visiting relatives in Pakistan. They said the situation there was rapidly deteriorating.  LINK

Pakistan should be our focus not Afghanistan .  As brought up before the fact that we spend 30 times the $ in Afghanistan we do in Pakistan is deeply troubling. If Obama goes ahead with the 3rd surge in Afghanistan that figure could grow to 40 or 50 to 1. We should be giving Pakistan’s fragile democracy more economic aid and listening to the views of their moderates instead of focusing on troop surges in Afghanistan.

Instead America is consumed by war propaganda. Glenn Greenwald writing for Salon makes an excellent point about the Universality of War Propaganda LINK

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	- 1.21%	up
NASDQ	-2.67%	up
S&P500	-2.40%	up
Russell2000	-3.51%	-

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals, Fundamentals & Analysis

Please Note – Long Term Outlook has changed from CAUTIOUSLY BULLISH to NEUTRAL

This is the first change to Long Term Outlook(downgrade) in many moons . This was done primarily on a technical basis. Both the NASDQ and the S&P 500 crashed through their major support levels (the 50 day moving average = blue line on charts at side of blog) We had an another major meltdown in above average increased volume again. This is the 3rd of 4th time within 5 weeks that volume has on a daily basis confirmed (rose significantly and was above average) a major downside price move (greater than 1%)

Longer term – volume has decreased as stocks have risen throughout the summer and fall. This is another technical sign of impending meltdown.

Markets are also not reacting positively to good news AAPL, GOOG,  AMZN , GS & others who beat expectations on TOP and Bottom line have rolled over and are trading down.  Hot stocks loosing ground on good news is the second canary in the coal mine dying.

Markets run on psychology more than anything else – especially in the short term.  Fundamentally , the situation is positive. The US lags most emerging markets, but even here more than a handful of companies now have top line growth.

The Dollar is the catalyst for this turn. Obviously it rose yesterday and this time the impact on stocks greater than the usual (@1% or less) that is approximately what stocks would have fallen with a+0.36% rise in the dollar. (see dollar analysis below)

When the Long Term Outlook is changed we often go back and forth for a while as stocks move above or below key support levels . Expect a rebound this AM.

Best Read of the Tea Leaves – I don’t expect a major roll over -20+%. If/when the dollar starts moving back down stocks should go higher.  However, some sort of correction (a 5 to 10% fall – we are already at 5%) is good for markets.  Anything that goes up too far too fast creates a bubble that bursts.

Also see dollar analysis below.

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI is @ 30% off its high (early June) Before that it gained almost over + 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI lost a modest -27 points yesterday and closed at 2986. 2nd day of modest losses. A higher high price on its chart pattern has been confirmed The BDI has rallied almost 900 points since late September. =  Bullish for stocks & world trade right now

——-

The Dollar is currently the #1 forecasting tool . It would be a wild guess to predict he daily moves of the dollar, but longer term fundamentals are clearly negative – the trend of a falling dollar should continue.

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

US dollar rose for for the 4th straight day +0.36% The dollar closed at $76.48 .  This is above the former support – now resistance level of $76.00 . Technically - Bullish for dollar & Bearish for stocks.

The next important resistance level for the dollar is the falling 50 day moving average (blue line on chart). This is at 76.83 this AM. It’s the line in the sand – Best read of the tea leaves is that it will hold. In fact, Investors411 will add to some positions  as we get close to this resistance level.

We 0.40 away from this resistance level. Mighty close.

Last year’s low was around $71,(March 08 ) so there is a long way to go before the major and very crucial support level is reached . The dollar does have a support level around $74.00( a high from about a year ago – see long term chart)

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

Outside the USA in Emerging Markets (especially China, & Brazil) are much better in the long run - Our problem is one of timing. We can’t get a 5 to 10% dip to invest. Looks like we will get at least our 5 to 10% dip now.  Investors 411 should have much larger positions in emerging markets .

Look to add to EWZ (Brazil) and FXI (China) positions because of dip. If prices continue to fall  will nibble some more

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

How to Clean Your Computer Screen

Thanks to one of you who sent in this most  valuable LINK

What Happens When You Cheat?

• You cheat – From Income tax to a college exam – Fines, jail, expulsion – there are consequences.
• Big Shadow Banks cheat – Get truck loads of money and executive get lavish bonuses
• Ahmadinejad cheats/steals election – You get the religious leader’s blessing, violently crush opposition and become president
• Karzai (Afghanistan) steals election – You get a do over even when your brother is perhaps the countries top opium dealer and on the CIA payroll for last 8 years.  LINK
  

You and I pay consequences and are held accountable. Others….

Back to Back Tom Friedman Editorials – Afghanistan

TF is usually a hawk when it comes nation building and military escalation, but surprisingly he opens with “We need to be thinking about how to reduce our footprint and our goals there in a responsible way, not dig in deeper.” LINK

TF echos what Investors411 has been saying for years – As much as we and moderates in the Arab world want to see modernization we can’t do it for them. In fact, our involvement almost always makes things worse. This time the Pulitzer Prize winner adds

“A strong, healthy and self-confident America is what holds the world together and on a decent path. A weak America would be a disaster for us and the world. China, Russia and Al Qaeda all love the idea of America doing a long, slow bleed in Afghanistan. I don’t. ”

Where’s Waldo – Obama

Unemployment, Afghanistan, Health Care , etc. Where is our charismatic leader? Hard at work?  He spent his last few days going coast to coast on a fundraiser in FD, CA and even right here in MA. He’s out campaigning in VA and NJ.  Politics as usual or change we can believe in?

Is Obama’s work ethic beginning to look like Bush’s on Katrina? -  Difference – Obama does look good on the golf course.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	+0.14%	down
NASDQ	-1.20%	up
S&P500	-0.33%	down
Russell2000	-1.13%	-

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals, Fundamentals & Analysis

The dollar rules. The correlation is probably around 90% on a day to day basis.  The fall in stocks over the last three trading days is due to the rise in the dollar’s value vs. other currencies.

Basically the dollar falling is an indication that long term debt of the USA is growing relative to other currencies.  Growing US deficits is almost a consensus view. This has been ongoing since 2000.

What caused the three day rise in the dollar is probably all technical.  So many traders were short the dollar (expecting it to fall further) when some entity (probably a central bank(s)) bought dollars the rise forced the shorts to buy to cover.  A simpler explanation of this is basically there were so many sellers that there were no new sellers left.  Same thing often happens with buyers. Remember, just about everybody sold stocks in the spring and the fact that we ran out of sellers was one of the reasons markets turned.

For more see section on dollar below.

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI is @ 30% off its high (early June) Before that it gained almost over + 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI lost -31 points yesterday and closed at 3013. A higher high price on its chart pattern has been confirmed The BDI has rallied almost 900 points since late September. =  Bullish for stocks & world trade right now

——-

The Dollar is currently the #1 forecasting tool . It would be a wild guess to predict he daily moves of the dollar, but longer term fundamentals are clearly negative – the trend of a falling dollar should continue.

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

US dollar rose for forthethe third straight day +0.26% The dollar closed at $76.21 .  This is above the former support – now resistance level of $76.oo . Technically - Bullish for dollar & Bearish for stocks.

The next important resistance level for the dollar is the falling 50 day moving average (blue line on chart). This is at 76.88 this AM. It’s the line in the sand – Best read of the tea leaves is that it will hold. In fact, Investors411 will add to some positions as we get close to this resistance level. The rate the dollar is falling has diminished as we approach this important resistance level. A sign that it will hold. However, if it falls we could see a major correction for stocks.

Last year’s low was around $71,(March 08 ) so there is a long way to go before the major and very crucial support level is reached . The dollar does have a support level around $74.00( a high from about a year ago – see long term chart)

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

Outside the USA in Emerging Markets (especially China, & Brazil) are much better in the long run - Our problem is one of timing. We can’t get a 5 to 10% dip to invest. Investors 411 should have much larger positions in emerging markets .

Look to add to EWZ (Brazil) and FXI (China) positions if they continue to fall this week . Bought more EWZ yesterday (see below)

For Traders (not long term Investors )

NVS -  (You could also sell 50% and put in a stop/sell order) I sold 50% of NVS (5% of portfolio) for a 12+% gain. Placed a stop/sell order at just under $50.00 for the other 50%.

EWZ – It was a mistake to sell (9% of portfolio or 50% of total holding) of this. Buying it back -  Added (5 % of portfolio) EWZ at 71.7.  Will buy more if/when it drops lower.

Traders – Three major tech stocks leading the charge – Hope CSCO joins them when it reports earnings. Investors411 has a (5% of portfolio position in CSCO that is down over 3% )

• AAPL – cutting edge computers and telecom revolution (phone’s) moving into China.
• AMZN – Fabulous earnings report and forecast.
• GOOG – Internet adds is growing even in USA.
  

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

The 3rd Surge

Fareed Zakaria, editor of Newsweek asks – Do we need a Third Surge in Afghanistn? LINK

• In Jan 2008 we had 26,607 troops in Afghanistan.
• The first “quiet” Surge under Bush added almost 22,000 to 48,250 by the end of 2008
• The second surge in 2009 under Obama we added @ another 20,000 troops
• Now “generals” have turned up propaganda for a third surge of 40,000 to 80,000 more troops.
• The total surge in Iraq was only  20,000 troops.

Zakaria offers an interesting alternative strategy. You may or may not like Zakaria’s strategy. But, it is is certainly far less costly than nation building or colonialism throughout the Arab world . See link above.

Two huge bombs went off in Baghdad Iraq today killing hundred(s) (to early to tell how many died) LINK

Just a reminder that in Iraq the Shia slaughtered the Sunni’s (many who were terrorists) and million(s) fled or faced slaughter.  This had a huge impact on entrenching the new Shia dominated government. The new Iraq Shia led government is corrupt, sustains high unemployment, and along with Hamas and Hezbollah was the first to recognize Holocaust denier Ahmadinejad in Iran even while he was brutally crushed the “Green Revolutions.”

The two major Shia religious figures in Iraq with millions of fanatic followers -  Sadr, embraces Ahmadinejad and Sistan i remained silent about “Green Revolution..”

We are about to enter our second decade of nation building or colonialism in the Muslim world that continues to add trillions to our deficit .

Crossroads – Nation Building

Violence in Pakistan

The Huffington Post has become a major focal point in opposition to expanding in Afghanistan.  Site founder Arianna Huffington has an excellent article “Why Joe Biden Should Resign. ” LINK Biden has opposed the Afghan buildup in favor of a focus on Pakistan. Three of you have chimed in on the blog and agree that since Pakistan has Nuclear weapons, many more al Qaeda and affiliates it makes sense not to focus resources (financially 30 to 1 ) on Pakistan instead focus on Afghanistan. 41 were killed yesterday in a coordinated attack on Pakistan Police stations. LINK

Looks like we are going to have a do over election in Afghanistan LINK and then send in more troops for another long costly war.  After that Pakistan, perhaps Yemen, the Sudan, Iran, then back to Iraq.  The LOOOOOOONG war in Afghanistan means nation building in a country whose #1 export is opium not oil.  How are we ever going to get out of debt while spending trillions nation building?

Seems like Obama without Biden is going down the same path as Cheney/Bush .  From an editor in London, Simon Tisdall – “With friends like the US, Pakistan doesn’t need enemies.” LINK Another from Paris by William Pfaff LINK Another from Paris by William Pfaff LINK

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	+0.47%	down
NASDQ	+0,05%	down
S&P500	+0.43%	down
Russell2000	-0,10%	-

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals and Fundamentals

Last hour rally lifts stocks. Always bullish to close at highs of day. Volume falls. We held onto Dow 10,000 and that’s psychologically bullish. Holding Dow 10,000 into weekend important

Google hit and IBM missed earnings reports. Last night GOOG was up 3% and IBM down 3% in after hours trading. GE and BAC missed this AM.

Good news is NOT having the positive impact it had last quarter. How markets react to news is our #2 confirmation factor. It has turned BEARISH

Warning – Financial sector seems ready for at least a light correction. 1120 on the S&P in technical terms a 50% retracement number. If you don;t know what this means – just think the S&P is at 1097 and there is a big boulder in the road ahead to 1200.

Famed investor George Soros this AM is quoted on CNBC saying  “the US will be a drag on worldwide economic recovery”

Rotation/Sector Rotation

What happens in a bull market is different sectors take over leadership. Leadership rotates. So far in the US – energy, tech and financials have lead. Many foreign markets have broken out before the Dow and other indexes reached new yearly highs. (Brazil, Chile, Australia, Mexico, Germany plus more) The US sector now in the lead is energy. Rotation is what the bulls love to see. It’s like a relay race where another runner picks up the baton or carries the markets.

The supporting themes that juices everything is a falling dollar,  the huge stimulus packages around the world, & bailed out shadow banks/financials.

Oil prices have now also broken out over $77 (new yearly high) and if they go north of $80 Main Street is going to get hit and Wall Street will eventually feel it too.

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI is @ 40% (I haven’t done the math) off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI nine day rally flattened out two days ago and has fallen 99 points. It shot up a significant +91 points yesterday and closed at 2688 =  Bullish for stocks & world trade right now

——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

Stocks went up so guess what happened to the dollar – The dollar reached a new yearly low two days and steadied yesterday at +0.04 % The dollar closed at $75.50. We have developed a support level just below $76 . The dollar closed below its support level. = Bullish for stocks

NB -

• Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.
• A slow decline in the dollar = good a rapid decline = bad .
  

Last year’s low was around $71, so there is a long way to go before the next major and very crucial support level.

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

I will try to revise this section to make it clearer – Open to any private suggestions – just went over it today.

Recommendations-

• Buy GLD on dips.
• Our other positions have gone way up and are NOT worth chasing at this time .
  
• If you are a stock picker or short term trader do not chase hot stocks – wait for a dip. Everything seems overbought. Financials on dips still decent plays. Looks like dip is coming.
• Traders – Bought small position in CSCO a few days ago
• Traders – NVS (Novartis) 11+% profit so far. Usually would take profits now or at least sell 1/2, but going to wait till swine flu hits.
• Having reached a higher high on major indexes, you start to think more about how much to hold and how much to sell.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Bill Mahr

Last week he had Tom Friedman and this week he had Lincoln Chafee (former moderate Republican Senator) on his HBO show real time with Bill Mahr.  He’s sometimes over the top, always funny, and gives a non regurgitated version of current events.

His most important stat this week was 1% of the USA had 8% of the wealth in 1980 when Reagan took office. Now that 1% has 23% of the wealth .

Right now up on his web site is “How Sarah (Silverman) saves the world – Provocative and funny LINK

Obama’s Closet

Sitting on the desk in the Main Room is going to be that big shiny Nobel Peace Prize, but what happens when we open the closet door.

• 13,000 more troops for Afghanistan (Obama’s “Necessary” war) LINK to WaPo story.  Obama’s words are sweet 7 he will have his Peace Prize.. But his action are totally different – now the USA has in Afghanistan and Iran “more troops than the peak during the Iraq “surge” that President George W. Bush ordered.”
• Paulson (Bush’s Sec. of Treas.) instead of using TARP funds to absorb bad debt (CDS’s) gave the money to shadow institutions. Obama continued the practice and even allowed them to change their accounting practices so that they would not have to show bad debt. (eliminated mark to market accounting) You can call this good, bad or ugly. But the reality is, just like Bush he is privatizing profits and socializing risk.
• How the hell are you going to reform anything (health care, medicare etc.) when all the money continues to go to shadow institutions and war.

Your Comments

Both D .& Sherwehe have opened a debate that enlightened anyone who has not fallen hook line and sinker for the fear mongering militarists who run the USA. What if the “$3 trillion ” going to fight wars went instead to other causes? Check out the comments and join the debate.

4 Factors Moving Stocks/Wall Street

Editorial below under Technical and Fundamentals. Unfortunately, these factors may move socks higher, but what’s good for Wall Street will not always help Main Street USA.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	+0.21%	flat
NASDQ	-0.01%	down
S&P500	+0.44%	flat
Russell2000	-0.18%	-

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals and Fundamentals

Basically the US markets have been up 5 days in and overbought markets hesitated yesterday.  The Dow has eked out a new yearly high, but the other major indexes still have a point or two to break out to new highs. Four major factors stand in the way of a breakout (Actually there are lots of factors or potential factors, but three keys.)

1. The Dollar – Discussed below
2. The BDI – Again below
3. Technicals – You have an overbought market that has risen in decreasing volume in front of major resistance level. = Bearish . However you do have one major US stock index and several foreign stock indexes (Brazil, Australia & some others) that have broken out to new highs. Also commodities like gold have had solid breakouts. = Bullish
4. Earnings Season – Three major tech companies report this week – INTC, GOOG, & IBM . Everyone is looking for top line growth -sales. Last earnings season it was Intel’s  (reports tonight) expectations of a bit better top line that juiced markets. Three major shadow banks JPM (today),GS (tomorrow) report & BAC (Friday) .

Bottom Line – The shadow banks will continue to do well. Bush, Obama, and Bernanke (The Fed & our government) have privatized the profits and socialized the risk. The oligarchy, just like in a communist country soaks up the wealth. As long as they are NOT forced to use mark to market accounting and have the

The big tech companies should benefit from the falling dollar. They have cut jobs in the USA and will first hire people where labor is cheapest and closest to growing markets that do not have huge debt – China & other emerging markets. The question is has top line growth abroad (China’s stimulus package & other emerging markets) been strong enough. China, Brazil, India S, Korea (the 4 majors) combined are growing but their combined GDP’s are total 1/2 of the USA’s.

This will radically change in the next decade as they continue to out preform the USA. The US is burdened with massive debt, phony wealth created by shadow banks and huge war costs.

Best read of tea leaves – Shadow banks will do well. Less sure about Big tech, but there will be no huge earnings miss. Therefore, expect other indexes to follow gold & Brazil.

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI is @ 40% (I haven’t done the math) off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI nine day rally flattened out yesterday. It rose a +1 points yesterday and closed at 2696 . Even thougha reversal seems eminent, we have technically achieved a higher high =  Bullish for stocks & world trade

——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

The dollar reached a new yearly low (barely) last week and fell -0.35 % The dollar closed at 76.16. We have developed a support level just below $76.

NB – Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.

Last year’s low was around $71, so there is a long way to go before the next major support level.

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

Our positions in gold GLD and Brazil EWZ are clearly out preforming US markets and our China/smaller S. Korea position. The later two are approaching new highs. Would buy more of GLD & EWZ on dips. On a purely funadamental basis financials should lead any rally and are therefore a decent short term trade

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!