Hope symbol from Iran’s Green Revolution – See Iran quiz below

Financial Hypocrisy

Investors411 has thrown a lot of venom at deregulated, over leveraged, opaque, Shadow Banks. However, the reality is the Pied Piper that led the Shadows down their path is a conglomerate of US politicians.  These same politicians are the ones who have been spanking Goldman Sachs and attempting financial reform.

The head line on lefty blogs is something like Republicans Filibuster on Financial Reform Crumbles. However Popeye in the comments section of the blog recognizes the enormous conflict of interest the leading Senate Democrat Senator Dodd (Chair Financial Committee) has. What good is breaking the filibuster if the end result is going to be milquetoast?

Tuesday, Investors411 referenced Luke Wilson’s (from Seeking Alpha) grading system for financial reform Today Peter Schiff (Yahoo Finance) Slams the Senators trying to reform the system.

Iran Quiz

On June 14th 2009 Investors411 began along  series on Iran’s election results. “Democracy Hopes and The Dictator Replies.” The dictator, of course was holocaust denying Ahmadinejad &( supreme leader) Khemenei. The whole world watched in horror as the dictators slaughtered innocent demonstrators in the Green revolution. Obviously Iran is the #1 country in the world you’d least likely want to see have nuclear weapons.

In the USA many stereotype, fear monger, and over generalize – Examples – All Arabs are the same, Let’s go war against Islam, The only good Muslim is a dead Muslim.  So lets take a pop quiz.

1. Is Iran an Arab country?
2. What percentage of students entering university in Iran is female? (be within 20% of correct answer)
3. What percentage of the Iranian population attends Friday prayers? (be within 20%)
4. What percentage of Iranians in 2008 said they had an unfavorable view of the American people? (be within 20%)
5. True or False: Did Iran considered the Taliban to be an enemy after the 9/11 attacks

I’ll Publish the results later today in the comments section of the blog.

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!

Index	Percentage	Volume
Dow	+0.48%	down
NASDQ	+0,01%	down
S&P 500	+0.65%	down
Russell 2000	+0.16%	-

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

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Markets recovered a small portion of the previous days losses in decreased volume = Neutral/Bearish

The Fed came through – held interest rates and issued basically the same we are going to keep interest rates low a long time statement. This plus a ever so slight improvement economically had the support of all but one Fed governor who also in the past has been somewhat more aggressive in raising rates.

The big news was still the Greek debt crisis. Massive indecision over what the future holds – See the dollar below. = Bearish

XLF - The Financial sector ETF is the indicator to watch as Senate begins to debate Financial Reform. XLF is dominated by the big shadow banks – If it goes down that means financial reform is going to force transparency and actually make a significant difference. If not the shadow banks and their lobbyists have won.

The XLF could also be impacted by the widening Greek debt crisis.

We’d need some continuing bad news on the spreading Greek debt to stop the bulls. When all is considered (Yields on 2 year  Greek bonds are 20%) the fact that major US indexes are a few points off their highs is remarkable = BULLISH

Stimulus packages across the world, emerging markets improving GDP are still driving markets higher. = BULLISH

Significant Indexes

• McClellan Oscillator rose slightly to  -24.82 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is  NEUTRAL territory, but we are closer to oversold than overbought.
• US Dollar – broke out to a new yearly high yesterday. Up +0.24% yesterday. The trading range was a huge 1.75% This indicates huge indecision. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules. Is very important.  Dollar closed at $82.33. This high is virtually entirely due to problems coming out of the Greek debt crisis. Rising dollar almost always + falling stocks.

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) - These are positions I actually own

Waiting for a lower reading in the McClellan to invest. Although for traders who can tolerate the risk (not longer term investors) a -25 is better than 0. A risky buying window is open. Long term  Investors should wait for more oversold conditions. .

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

The Empire Forever-Photo from Atlantic

Israel’s Knife in Biden’s Back

VP Joe Biden, who many consider the greatest friend of Israel ever had  in the US Senate, has spent about a week in Israel.  He opened with gushing words of support for Israel. The next day Israel announced 1600 new homes in what Palestinians believe is their land. The far right Israeli government put a knife in the American backed peace process and basically said F— Y– to Obama. Laura Rosen from Politico on reaction

Janet Yellin for Fed Vice Chair

The Fed has an enormous influence over YOUR life. Janet Yellin has been leaked as Obama’s choice.  Almost all extremely well qualified choices like Yelin are quickly approved. But times have changed and politics rule. Experience, Intellectual rigor, have become secondary to political views.

Insults in Afghanistan

Iran’s Ahmadinejad (Add 911 was a CIA conspiracy, plus the old holocaust didn’t happen to his list of pronouncements) and Sec. of Defense Gates traded insults while both were in Afghanistan. Both visited so called “President” Karzai. Story link from foreign press.

A BRIC Wall

BRIC = the emerging market giants Brazil, Russia, India and China who many seem to think are taking an opposing view to US policy – On the front burner, see National Interest piece, on blockingsanctions for Iran

Public Option’s Last Try

Bernie Sanders will introduce the public option sooner rather than later

Empire Forever

Robert Kaplan has an outstanding piece in the Atlantic on Afghanistan & the American Empire.

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!

Index	Percentage	Volume
Dow	+0.42%	down
NASDQ	+0.40%	down
S&P 500	+0.40%	down
Russell 2000	+0.34%	-

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

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend. (No changes this weekend)

Almost the exact same as yesterday-” Another melt up day in decreased volume.” This is now a mantra. Volume is NOT confirming the move higher.

Again same as yesterday – “As suggested yesterday the XLF (ETF for financial stocks) was one of several possible catalysts for continuing the rally. As the chart shows, its broken out to new highs over the last two days in increased volume. Basically, any meaningful attempt to shadow institutions and bring transparency to related markets is getting crushed. Therefore, it sure looks like the shadow financials  will add fuel to the stock rally.” This move higher is being led by Citigroup which move up &% yesterday and traded an overwhelming billion+ shares again.  This stock, like IMAX,  is going elliptical and expect it to run out of juice today.

The benchmark S&P 500 closed directly on its 18 month high. Obviously, momentum is with the bulls.

3 positions are open on the Fed and Janet Yellen has been leaked as the choice.

Retail numbers [just came in much better than expected = rally ho] and consumer confidence this AM – Both significant fundamentals that can move the market.

As long as mild melt ups continue outlook remains bullish.

Significant Indexes

• McClellan Oscillator fell a bit to +60.06 yesterday. We are still well above +60 or Overbought territory. StockCharts has a better version of the McClellan chart ($NYMO) LINK. Last week the NYMO reached a high of 75.33. It looks like we could get above that. So there is room for a short term trade, but longer term overbought = sell
• BDI - The Baltic Dry Index, which measures the cost of world trade (also a good indicator of how China is doing since they are huge exporters/importers) has exploded higher in the last few weeks. After flattening for a few days it is once again moving higher = Bulls rule

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) - These are positions I actually own

From Yesterday “ IMAX – has exploded higher in HUGE volume.  It has “gaped” higher three days in a row.  In short, its going elliptical. That means expect a pull back. IMAX also reports earnings today.” IMAX “gapped” higher at the open again and was up over 7% and ended the day down 1.00% in HUGE  volume.  Best read of tea leaves is IMAX will take another day or two to settle then consolidate of move up. 

Mistake was to not sell some IMAX when stock “gapped” higher.(Up 7%)

From yesterday “Shorter term traders – Even though we are overbought, it sure looks like the McClellan will reach above 80 sooner rather than later. You might want to go long with TYH(3X technology) or FAS (3X what financials do) Buy a dip and keep tight stops.” Bought a 10% (Of portfolio) position in TYH at 151.50. Put stop at that 151.5 and may sell 1/2 for 3 to 5% gain hopefully today. TYH closed at 154.99

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Nation Building Quagmire

Ronald Reagan was right

Once again Frank Rich’s Sunday NYT editorial is outside the American corporate media news box. It deserves your attention and is, in part, the basis for the points below. LINK

• We, getting out butts kicked in the war on terror – The call for a 3rd unilateral surge of troops (see Oct 25th post) is  a major example of failure – you don’t call for more troops when you are winning.
• The debacle or “unjust” war/nation-building in Iraq is the underlying cause of the trouble in Afghanistan. – While we fiddled with Iraq – Afghanistan, Pakistan and Iran all burned. This was predicted over and again since the Iraq war started by Investors411 and others.
• Pakistan (2 to 3 times larger than Iraq+Afghanistan and a nuke power) is deteriorating rapidly – All polls show the #1 party in the polls is now the Muslim religious party who campaign slogan is “Go America Go”
• Systemic failure of the military/pentagon to foresee the Hasan/Ft. Hood disaster.
  

Solutions fromthe far right and the military

• Of course right wing solutions blather fear and religious leaders like Pat Robertson are calling Islam “Not a religion, but a violent political system bent on the overthrow of the governments of the world.” Every Islamic terrorist is using Robertson’s (or some right wing American like him) quote to turn moderates into terrorist recruits.
• This right wing view is diametrically opposed to US military/General McChritstal’s call for 40,000+ more troops in Afghanistan   “The key to success – a strong personal relationships forged between security forces and local populations.” A worthy goal, but is it doable, what are the costs, and like Iraq will it just make things worse.

Iraq/Afghanisatan

• Maliki, our guy in Iraq, is one of the founding fathers of the Darwa party. The Darwa party is responsible for killing almost 250 American marines in a bombing in Lebanon. Reagan was smart and he got our troops out of the Lebanon quagmire
• The two major religious leaders in Iraq – Sistani refuses to ever speak to Americans & Sadr hates us worse than Pat Robertson hates Islam. They hate our occupation.
• Our invasion of Iraq has created the biggest refugee crisis in the world according to the UN. 4.2 million people have been displaces when the Shia just about destroyed the Sunni’s in Iraq. Sunni’s were responsible for most of the violence. LINK
• Maliki/current government along with Hezbollah and Hamas was the first to recognize (insert most negative adjective(s) you can think of here) Admadinejad election in Iran
• Iraq’s economy is rich with oil & Afghan’s rich with Opium. To create/nation build in Afghan means creating a whole new economy. Far more costly than Iraq.
• Our guy, Karzi, in Afghan, is corrupt, an election rigger, and his family directly related to the opium trade.

Solutions - Absolute worst solution is some form of  Obama compromise – (send in 20,000 troops)

If you’re going to commit to war/nation building in Afghan do so absolutely . Otherwise you’ll never win . If you do commit – Expect/be prepared for of tens of thousands of casualties, a lot more than 40,000 troops sent, many trillions in cost, a huge extended cost of occupation/nation building beyond Iraq, Afghanistan to other countries, our huge deficit to explode higher and the majority of Americans/world (already against the war) to grow in size and anger.

My choice – Ronald Reagan made a wonderful decision NOT getting us involved nation building in Lebanon after the bombing of the marine barracks.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0.91%	up
NASDQ	-0.83%	up
S&P500	-1.03%	flat
Russell2000	-2.09%	-

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 fell  a  significant -0.60 so stocks rose The inverse relationship between the dollar and stocks is so strong it is easily the dominating factor in movement of equities. The other forecasting are distant seconds to the US dollar’s movement.

Monday’s since September have been historically very good for stocks. If the dollar is going to breakdown and stocks breakout higher it most probably will happen this Monday or next.

Major rally in most countries overnight.

KISS = Keep It Simple Stupid – The dollar rules

——–

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 @ 4% 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 +155 points yesterday and closed at 4111. Up 12 days in a row . The BDI’s growth did slow down a little as it approaches its major resistance level at 4291 . (This years high)  The BDI has rallied about 2000 points since late September. =  Bullish for stocks & world trade right now. Especially good for our positions in FXI & EWZ

Like most major resistance /support levels expect 4291 to hold. Technically – Upward momentum slowing is a sign that the 4291 resistance level will hold and after being up 20 of the last 22 days the BDI is certainly overbought.

——-

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 down a  significant  -0.60% yesterday. The dollar closed at $75.23 . “ Usually a major support level at least temporarily halts any fall.” The $75 support level held and now the dollar is near the bottom of its range.

The next important resistance level for the dollar is the falling 50 day moving average (blue line on chart). This is at $76.20 this AM . The support level is a little below $75.00 . Both are EXTREMELY important lines in the sand. A breakout on either side will move US equities in the other direction and the world will follow.

There is a major squeeze play going on as the resistance level keeps falling as does a major trend line. Support remains flat at @ $75.  Only $1.20 separates the two. Which ever side the Dollar breaks out through will set the momentum for it and the opposite will happen for US ( and most world) equities.

CAUTION – The first breakout (up or down) is often false. Right now the momentum (since the long term trend is down) is with the Dollar bears and consequently stock bulls

——-

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

The index closed at +5.83. This indicates stocks are just a wee bit overbought and moving is either direction is possible.

Key to chart – Zero  is roughly  neutral and roughly when you approach 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 well over a week – see past updates

Investors

Comments – NOT the time to buy or add to recommended positions. (FXI, EWZ, GLD )  Enjoy the rally. Shorter term investors may want to sell part of the 3 major positions while they are at highs.

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

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. But subject to further change back to neutral since breakout was weak.

Long Term Outlook = CAUTIOUSLY BULLISH

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 .

Iran Gets Caught Red Handed

Perhaps this is one reason why the Russian President came out and said sanctions are inevitable.

Breaking news – Iran has been caught by US, Ger., Eng. and Fr. secretly trying to enrich Uranium . This news should dominate news cycle. Holocaust denying, illegitimate President Ahmadinejad (photo above) announced he got caught with his hand in the nuclear cookie jar. LINK

Obama’s Bill to triple non military aid to Pakistan passes Senate. LINK

These two news items are interconnected .

The US obviously has limited resources. We should NOT be trying to spend trillions (Nobel prize winner Joe Stigletz put this cost at $2 to $3 trillion) nation build in Iraq, Afghanistan, or other countries.  What we need to focus on is the nuclear problem especially in Iran and Pakistan.  If we can increase stability in Pakistan now (the $1.5 billion in aid is still too little)  we could prevent spending trillions there later.

Obama directly addressed cutting nuclear weapons at the UN Here’s al Jazeera’s interview of Jordan’s Queen Noor. Remember al Jazeera is basically a Sunni arab news outlet and Iran is Shia and Persian. No love lost between the two. LINK

Alternative Energy (+ and -)

Tom Friedman is back writing about alternative energy or lack of alternative energy manufacturers in the USA. Also there is  in the comment section of the blog an insightful reference to a Newsweek story “Big Oil Goes Green For Real ” LINK

Last week Friedman bemoaned the fact that the 14 new solar energy plants (one significant component of alternative energy) has all been built outside the USA. LINK

G 20

The G 20 countries are meeting in Pittsburgh and if corporate media let’s us get buy protests you can find some substance. The NT hits the nail on the head. The G 20 nations with a lot of stimulus packages and other measures have averted a worldwide economic meltdown. Now the tough part begins – Getting past self interests and coming up with some global regulatory solutions and avoiding protectionism LINK

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0,42 %	down
NASDQ	-1.12%	down
S&P500	-0.95%	flat
Russell2000	-1.89%	-

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

There hasn’t been big volume behind this current short term dip, but it has been moderate.  The NASDQ (tech’s have lead) the retreat and has had the biggest volume.  A second day of losses usually acts as confirmation of the first days turn, especially if volume rises.  So we get a kind of partial confirmation.

One of the internet darlings and AAPL competitor, RIMM got toasted in an early earnings report – down 10+% – Bearish news for techs

A Fed Governor Kevin Warsh has said that we may have to raise interest rates sooner than later.  Stocks love a 0% interest rates and rising interest rates means other ways of making $ become more viable than stocks. WaPo editorial LINK = Bearish Fundamental

Earnings season is around the corner.

G 20 summit taking place in Pittsburgh.

BDI seems to be turning higher = Bullish

Iran has a secret uranium enrichment program just announced by US government = Bearish news

——–

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) .

2388 is support level/number to watch – Yesterday BDI fell -10 t o close at 2165. Major support level has been broken and the rate of fall is dramatically intensifying – From @ -70 to -10 Short term Bullish for stocks

The BDI is @49% 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 ) A 50% retracement from highs is a major support level. Therefore some stabilization is understandable.

What this means – World trade is in trouble – lots of ships are sitting in ports empty.  To some degree, China has stopped buying raw materials and/or the US consumer is not buying as rapidly as earlier in the year. Braking a support level is significant, but 2250 (current level) is still a long way from the Dec. 2008 663 low. = Storm clouds gathering

——-

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

As predicted the $76 support level held.

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

The dollar rose a very significant + 0.76% yesterday and closed at $76.91. Technically this is a new short term high from a few days ago = Bullish for dollar and bearish for stocks

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

Sold all of 10% stake in XLF (financials) at 15.01 for a 7+% profit.  Reasoning – if markets do have a 5 to 10% correction higher beta (those stocks that are most volatile) names will get hit.  There’s a lot of talk about a consumer protection agency passing congress with financials as its focus. LINK

I keep waiting for some sort of regulation to be voted on so the same kind of meltdown does not happen again and Democrats, who are in control, keep disappointing.

Again just like selling AAPL, not being greedy sometimes hurts.  As a trader I do play with ETF’s that do 3x financials both long and short (FAS &FAZ)

Plan to add to EWZ (Brazil) on a dip.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

WHAT’S UP? – Iran Day 7 – Kissinger, Kerry, Kahameni, Moussavi, Ahmadinejad, Obama Effect – Some conclusions – The “Supreme Leader” Reading the Stock Tea Leaves – low volume – The dollar & the Baltic Dry Index – plus more

IRAN Day 7

Friday demonstration -Photo Getty

• Perhaps biggest rally yet as “Day of Mourning” brings million+ to street yesterday. Story Link
  
• “Supreme Leader” Ayatollah Kahameni today called the elections fair Story Link
• The “Supreme Leader,” this is the name they use for their dictator, accused US, Britian, and Zionists of compicity incasting doub on the elections.
• Henry Kissinger endorses Obama’s hands off strategy “Anything he [Obama] says would handicap Mousavi “(opposition leader) This echo’s Senator Kerry “Think Before You Speak” editorial

Some Conclusions the Far Left and Far Right are NOT going to like to Hear.

• The focus has shifted. It’s no longer The American’s against he Muslim world (you’re either with us or against us) but between the conservatives and modernist in Islam.
  
• Ahmadinejad was created under the hard line Cheney/Bush approach to the Muslim world. The “Green Revolution” under the “Obama Effect”
• Lesson learned – All Muslim’s are not the same – Just like American there are there many different sides
• If the Ahmadinejad/Kahameni militant temporarilly win – remember they are the main supporters who encourage and support other violent terrorist groups like Hamas and Hezbolah.
  
• Look at what the Ahmadinejad/Kahameni militants do to their own people and think what they would do to you, Sunni Muslims, Israel, or any who do not follow their orthodoxy.
  
• These militants in Iran are more dangerous than “Supreme Leader” Kim in North Korea because they are religious miitants.
  

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index	Percentage %	Volume
Dow	+0.69%	down
NASDQ	-0.02 %	down
S&P500	+0.84%	down
Russell2000	+0.48 %	-

-

Technicals & Fundamentals

Mea Culpa – Like many others I’ve been caught up in the events in Iran and not been doing due diligence on stocks and other issues. But still believe in basic conclusions listed this week. However,  the conclusions/forecasts have been pretty accurate starting Monday. See reading the tea leaves below.

Significant forecasting tools/Indexes for stock markets

Note - Repeated statements in brown

$USD – The dollar is the index to watch. The bottom line right now is – When the dollar goes down-stocks and oil prices go up and visa versa. Dollar went up +0.45%.   It looks like the dollar may be establishing a short term bullish pattern (see chart)  of higher highs and higher lows.  Too early to tell difinitively. However if you get another 1 to 2% rise inthe dollar the mantra of the last few months will probably reapear. Investors 411 mantra is Dollar rallies = Oil & Stock prices fall.

XLF - The ETF that tracks financials (mostly shadow banks ) have been stuck in consolidation for over 3 weeks. +2.41% in low volume. Financials are in danger of breaking down through a major support level. (see chart) They got a reprieve yesterday. Any breakdown would be bearish.

WTIC – Oil prices closed up +0.29% yesterday.

BDI - The Baltic Dry Index measures the flow of goods (world trade). 24 up days in a row, 6 down day in a row, & now a 6 day rally. But again yesterday the move higher was minimal and we have NOT reached the highs of 6 days ago.

We could be putting in a double top or a slightly lower high. This would be a longer term bearish sign if it occured.

Reading the Tea Leaves

The conclusions/forecasts have been pretty accurate starting Monday.

• Monday’s lead statement - Expect a tired low volume market to retreat this week .
• Low volume means indicates no bias toward bulls or bears.
• The low volume breakout has failed and we are back in the old consolidation area and, therefore back to NEUTRAL outlook.
• Strong support at @ 900 on the S&P 500. This has held for a couple days.
• The low volume indicates a technical correction of a market that went too high too fast.
• The possibility of this 4% correction turning into a 10% correction exists – still with low volume

The key two words are low volume . This shows little commitment my major players one way or the other.

The BDI and especially the Dollar are the indexes to watch. This is a technical correction, but volume is the key. Some unexpected bad economic news could turn volume around and put the bears and fundamentals in control.

In the Long term its hard to see the dollar move higher because fundamentally we are printing so much money and injecting a lot of stimulus intothe markets.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

WHAT’S UP? – Iran Day 6 – Health Care, Despite 76% of American’s wanting a public component, its in trouble, why – The regulatory rewrite – Reading the Stock Tea Leaves – India – Stock predictions and more

Iran Day 6

Best sources for what happening remain The Huffington Post , Andrew Sullivan’s blog, and the BBC . (See yesterday’s post)

• Day of mourning for fallen proclaimed by opposition leader Moussavi
• Demonstrations continue and Ahmadinejad government continues to censor press (foreign and Local) and beat/arrest demonstrators

Scott (see posts on the right) reminds us Ahmadinejad is not a dictator and more like a "Secretary of State." He’s right. The "Supreme Leader" Ayatollah Khamenei is the religious dictator . He is backed up by a group of other religious leaders whose head is a Moussavi supporter.  The question is will this oligarchy of conservative religious leaders win or will "Supreme Leader."

Remember there were over 300 candidates for President and only 4 approved candidates allowed to run.

Health Care

76% of Americans want a public heath care plan to go along with a private plan NBC/WSJ Poll Link Unfortunately this legislation is in trouble. Here’s why.

• Opposition by HMO’s who fear competition
• Opposition by Drug companies who fear decline in prices
• Opposition from AMA. Doctors who fear loss in revenue.
• Decline in Obama popularity because of the depth of the economic problems.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index	Percentage %	Volume
Dow	-0.09%	up
NASDQ	+0.66 %	up
S&P500	-0.14%	up
Russell2000	+0.65 %	-

-

Technicals & Fundamentals

So far Volume has simply not confirmed any price move. Yesterday volume, although higher was not yet even close to average.

The exceptions is the NASDQ – Yesterday’s modest rally was accompanied by above average volume.  This is not yet significant because the rally was so modest +0.66%

Jobless rate for week =

Long Awaited Government’s Regulatory Fix

The administration released its prescription for regulatory fixes for what went wrong in the financial meltdown (102 pages) The reaction from Wall Street – Stocks went nowhere .

You’d think at least financial companies (shadow banks and related institutions) who got us into this whole mess would be in panic over regulatory changes. The XLF (financials/shadow banks) did loose -2.93% yesterday and is down this week in anticipation of this report. But this drop is not nearly as big as many over the past few months.

Conclusion – Too early to draw a conclusion about how effective some of these changes may be. They have to get through congress. Simply judging from the reaction of the Shadow Banks prices.  Their concerned – prices have fallen – but not panicked.

Just judging from how investors are reacting to proposed regulations – The suggested regulations are not tough enough. If they were we would have seen a bigger meltdown.

This is, hopefully, going to be the biggest regulatory rewrite since the Great Depression .

Significant forecasting tools/Indexes for stock markets

Note - Repeated statements in brown

$USD – The dollar is the index to watch. The bottom line right now is – When the dollar goes down-stocks and oil prices go up and visa versa. After two significant days where the dollar was up a total of over 2% it fell -0.58% Tuesday & -0.59% Wednesday. Investors 411 mantra is Dollar rallies = Oil & Stock prices fall.

XLF - The ETF that tracks financials (mostly shadow banks ) have been stuck in consolidation for over 3 weeks. -2.93% in noticeably higher volume .

WTIC – Oil prices closed up -0.67% yesterday. 

BDI - The Baltic Dry Index measures the flow of goods (world trade). 24 up days in a row, 6 down day in a row, & now a 5 day rally. But yesterday the move higher was minimal and we have not reached the highs of 6 days ago.

Reading the Tea Leaves

Monday’s lead statement - " Expect a tired low volume market to retreat this week ".

The rising dollar is technically the most important influence on stocks. The correlation between the dollar rising and stocks doing the opposite is perhaps greater than 80% over the last few months.

NB – Volume is confirming Nothing. So it looks like the support levels will hold. This prediction yesterday looks premature . The XFL (could fall off a cliff if they think financial regulations are too stringent) and this would bring stocks down. Of course we need good regulatory laws and enforcement to prevent the same thing from happening again.

Positions

IFN (India) - Bought a small amount of IFN yesterday (India) yesterday at 27.6) This will probably fall more in sympathy when US markets fall.  So I may be premature in buying. Will buy more on larger dip.

The dollar is still key to market & oil prices.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

WHAT’S UP? – Many Thanks to posts from d , E Wanapat, & JB on how to follow the coup/revolution in Iran. Great stuff! “Neither Free or Real” from the NYT – Intent & Twitter break news while networks/cable sleep  Day #3 of Coup in Iran – Important Summers/Geithner editorial – Outlook for stocks and more

Dorm Room Door in Iran’s Ishfan Technical University

“Neither Free or Real”

The NYT headline editorial entitled “Neither Free or Real” about the elections in Iran.

It is essential that Obama recognize the plight of the young revolutionaries in Iran. This view is held by most from the far right Weekly Standard to all the liberal blogs following the “green revolution.“

Huge kudos and Thanks to those of you who listed sites that readers could go to to witness the videos of the violence, brutality and oppression  by the dictators in Iran . You can follow what’s happening live by going to those sites or on suggested Twitter sites. The videos are in many cases horrific and brutal. See posts on left hand side of blog.

Brutalized Iranian protestor – Both photos from Andrew Sullivan’s blog

Some Significant Points

• There is a huge reform movement among the Iraq people who genuinely desire freedom. This is a majority of the Iranians. Unfortunately the dictators have all the guns.
• This coup by holocaust denying dictator Ahmadinejad (fronting for militant Iranian Mullahs) was well planed down to the details of the Interior ministry surround the place the count the votes before elections were closed.
• News coverage by networks and cable TV is slow and out of focus compared to the internet. While watching the brutality happen CNN’s Larry King was asking Ahmadinejad questions about his kids.
• Most likely, in the short term, Iran is going to move in the direction of N. Korea. Editorial analysis here
• Lots of decent coverage on internet that you all sent in. Perhaps the best is Andrew Sullivan’s blog The Daily Dish He writes for the Atlantic magazine. Their weekend wrap up of what happened can be found here

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index	Percentage %	Volume
Dow	+0.32%	down
NASDQ	-0.19 %	down
S&P500	+0.14%	down
Russell2000	+0.14 %	-

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Technicals & Fundamentals

Breakout is not an accurate description of what’s happened to the market.  We have “INCHED FORWARD”  There is no real conviction in the volume behind the move higher. Yes markets have remained above “breakout levels” for about a week, but it seems like a very hesitant bunch of investors waiting for a massive counter attack.

The situation in Iran is not going to help markets. Asia & Europe down 2% as I write

Obama is going to lay out his concepts of regulations on financial markets and that also is  probably not going to be bullish for the stocks. This happens on Wednesday. Obviously some kind of regulation is needed to keep the greed of unregulated free markets from self destruction.

Larry Summers & Tim Geithner have a  must read for investors in the Washington Post entitled “A New Financial Foundation” Geithner and Summers have often been treated negatively in this blog, but the outline in decent. It makes the Fed the systemic risk regulator & all derivatives are “subject to” ( not – will be) regulations.   The devil is in the details.

This is all going to be a huge mess in front of congress. Lots more as this gets worked out this summer.

Reading the Tea Leaves

Expect a tired low volume market to retreat this week.

The battle over regulations on a unsupervised shadow banks will probably halt any short term rally.  The medicine is going to taste bad, but unless confidence in the financial system is restored we have no real long term stabile economic future. Right now we (the taxpayers) are socializing the risk while they rap the gains.

Technically – The BDI is bullish, and is a good long term indicator of the trend. How the dollar moves is now the most critical factor behind current     stock movement. Dollar rising = stocks & oil prices dropping.  Another reason to expect a down week.

Significant forecasting tools/Indexes for stock markets

$USD - Repeated statements in brown – The dollar is the index to watch You could write a book on the dollars influence on everything but for us the bottom line right now is – When the dollar goes down -stocks and oil prices go up and visa versa. Dollar is up in pre market rally and up a significant +0.97% Friday

XLF - The ETF that tracks financials (mostly shadow banks ) have been stuck in consolidation for over 3 weeks. + 0,64% in weak volume Friday

WTIC – Oil prices down -0.99% Friday

BDI - The Baltic Dry Index measures the flow of goods (world trade). Stated before -  This is extremely important because one of the greatest obstacles to a worldwide recovery is the lack of trade between countries (protectionism) 24 up days in a row, 6 down day in a row, & now 2 day rally. Bullish sign.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

What’s Up? – Your Smack Down List- 20, count them, 20 smack downs – you guys are angry – The HULK is on his way; The New Your Times – a phenomenal resource – Charts, graphs and data. Consumer Rights Legislation; Barney Battles Banks; David Brooks on Obamanomics; Tomorrow - Torture

     Your  SMACK DOWN LIST

Investor’s411 is sending THE HULK (Movie version above) to Smack Down the following people, institutions, & concepts that you selected. Instead of 10 Smack Downs YOU came up with 20. To see full list of comments & reasoning scroll down on this link.

1. Alan Greenspan
2. Hit & run Drivers
3. Hezbollah
4. Hamas
5. Inflating intelligence
6. Larry Summers
7. Ahmadinejad
8. Bush
9. Cheney
10. Rumsfeld
11. Tortures
12. Junk mail
13. trashing the environment
14. Former Senator Coleman
15. Minnesota going without representation
16. MN Governor Pawlenty
17. those who cut education
18. those who cut health care
19. N. Dakota sate legislature
20. those who discriminate

For those of you who missed out on Smack Down comments or thought we missed something - tomorrow’s #1 topic is TORTURE. There will be another Smack Down List next month.

AP photo Scott Appelwhite 

Consumer Rights Legislation

Barney Frank is leading the major consumer rights bill through congress . You can imagine how hard the Shadow Banks & Credit Card Companies are fighting this bill to aid consumers. Obama meeting with big banks today. NYT story

Say what you want about, Barney Frank, but he like Elizabeth Warren is one of the heroes fighting the big money Shadow Banks. No bank(s) owns Barney Frank The Republicans and many Democrats owned by the big banks killed his efforts for consumers last year. Check out his long but enlightening “Great Economic Hole” Speech of 2/4/09

Why the NYT’s is a Phenomenal Resource

* NYT has a graph and interactive chart telling Where Your $ Bailout Money Has Gone 

* NYT has another chart/outline on Our Government’s Total Bailout Tab

* NYT has another interactive chart on Pay at the Top (CEO’s)

Obamanomics

Obama’s landmark economic speech is reviewed by conservative NYT columnist David Brooks Also see April 15th blog post on Obama’s speech.

Tomorrow TORTURE

This is the #1 topic among the blogs. Want to lead the discussion? Send in your comments below.

STOCKS

Index	Percentage %	Volume
Dow	-1.04%	down
NASDQ	+0.i4%	down
S&P500	-0.77%	down
Russell2000	+0.14%	-

 

Technicals & Fundamentals

Repeat from yesterday -Forget all about the major indexes - What happens to the shadow banks (financials) absolutely dominates stock  trading.

Earning season continues – Markets have already factored in most of the bad news into this earnings reports. Apple and Ebay did hit earnings home runs. UPS struck out

XLF - The ETF that tracks financials (mostly shadow banks) rose +0.91% in decreased volume.  Financials have lead this rally and if they  collapse so will almost all other sectors (see Positions section of blog on XLF) This leading index is the one to watch.

Short Term Outlook -(again a repeat) Second technical chink in the bulls armor appeared Monday – another big volume sell off.  Volume, the #1 confirmation factor of stock price moves. But Tuesday’s bigger volume (for FLX) means we are one again going up on the roller coaster and gives hopes to bulls.

Too early to make a call on which way this may break, but short term traders should pay attention. The Danger signs to watch for - more big price/volume decline  and/or stocks moving lower on no news or good news. Especially in the XLF

Reading the Tea Leaves - Look for a pull back this week or before the governments “Stress Test” becomes public May 4th. 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!