• A rising MO 50DMA , what we have now, usually correlates with a bull run. The relatively rapid rise in the MO’s 50DMA (below 0 to +25) is almost always associated with a longer rally

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Real News

Be still my beating heart, Hillary Clinton, gets it and she’s not afraid to tell the world.

Our Secretary of State, Hilary Clinton launched a verbal broadside against American media and its headlined in the Huffington Post One of the sheep/cows has woken up to the fact of just how phony American media is.

Clinton -

• Al Jazeera offers “real news”
• US is loosing “information war” in the world

“You may not agree with it [Al Jazeera], but you feel like you’re getting real news around the clock instead of a million commercials and, you know, arguments between talking heads and the kind of stuff that we do on our news which, you know, is not particularly informative to us, let alone foreigners.“

More Sophisticated Trading

One of Investors411 mottos is to try to keep it simple. So the following is a bit out of context, but it involves two long term position which I hold and you may be interested in. They involve leveraged ETF’s UCO and TMV, & the use of covered calls.

• TMV is 3x leveraged (bearish) to 20+ year treasury bonds. I think inflation is inevitable because of all the quantitative easing and yields will eventually rise.
• UCO is 2x leveraged oil prices. I think, because of growing demand and limited low cost oil higher prices are here to stay.

I have bought these stocks and sold/opened a call option on them. Example – I bought 100 shares of UCO last week at $51, and sold a call at $55 for March 18th. This means the other person has the right to buy my UCO for $55 on the 3rd Friday of the month. That person payed me $160 to do this or about 3% premium. So I made 3% already and on March 18th if everything works out I can sell another covered call on the same UCO and make another premium. Sweet, but there are dangers and lots of other factors involved.

• Sorry ran out of time and I’ve just started. - to be continued. – see comments section later today for more.

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KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

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Technicals, Fundamentals & Analysis

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

BUBBLE-ICIOUS - Investors411 term for the stock market – We are all riding on the outside of an ever expanding &  Central Bank manipulated stock bubble. See Investors411 STRATEGY section for more

• The same old Fed manipulated stock bubble building trading pattern gains in small volume. This time is was BIG gains
• The impact of higher oil prices around the world has become a threat to globalized growth and US markets have not yet decided the impact higher oil prices
• Many forced to cover short positions, so we had a big swing up
• Oil prices above $100 (now for two days) will have a bigger impact on emerging markets than the USA. So the longer prices stay high the worse it is for the economy and eventually stocks.
• Alan Greenspan’s view on the economy
• Jobs report for February below – Remember a good jobs number means the more likely quantitative easing will end sooner rather than later and/or there will be no QE #3. Scheduled ending June 30th. So good news on jobs may be bad news for stocks.

Employment numbers for Feb. are - 8.9% unemployment Figure and +192,000 jobs created.

Good headlines for the public and about what was expected. AP on numbers

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Shorter Term Forecasting Indexes

• The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar fell again. This time -0.24% yesterday . Oil prices now are by far the #1 forecasting index (see below) For stocks dollar short term trading pattern = Bullish
• McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] MO rose to  +24.63. Over the last three months the new parameters seems to be +/- 30 as an overbought/oversold level. MO Stocks outlook = Neutral/Bearish

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Reading The Tea Leaves

The McClellan Index has worked almost flawlessly over the past few months. Check out the chart above. Therefore, with the MO at +25, in the short term we are probably very near a top. Longer term trend is still with the bulls.

What to watch today

• USO - ETF for oil - Oil up = stocks down
• UUP - (Tracking ETF for dollar) Clear 2 month pattern of bears ruling Remember - The dollar is a contrarian indicator. Bad dollar = good stocks
• AAPL – Bounced off its 50 DMA support level. Back approaching new high

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Positions

Another 3% trailing stop today on both REMX & RJA today.

UCO -Will sell 1/2 of UCO if profits exceed 5%. 5% trailing stop

UWM – A +25 on the MO shows there is not a lot of upside left in the UWM. So will probably sell into small rally and have set 3% trailing stop. Buying with such a high MO was probably a mistake.

Will post when I buy/sell in comments section of blog.

UCO -(2x oil prices) Why not, its also a hedge against higher gas prices.

REMX (Rare Earth ETF) - Really believe this a good long term holding.

DGP – (ETF is 2X gold) . Set to follow silver and approaching breakout. Broke out to new all time high and has started to pull back. Buy the dip to 17 DMA

DBC – (Commodities ETF) For a more complete list of commodity ETF’s see POSITIONS listed at top of blog  DBC is tilted to energy.  A good alternative would be DJP that is more agriculture and metals - Both DBC & DJP are on breakout runs. Buy the dip to 17 DMA

RJA (Agriculture commodities Index)An ETN, not an ETF. Hopefully longer term holding. .

UWM (2x small cap stocks) TNA (3X small cap stocks)

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Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See ”POSITION“ section of blog (at top of page) for lists of potential stocks & ETF’s including ”YOUR Stock List.” (YSL#4 is under construction.)

Our Manipulated “Free” Press

Every bankster in the USA has one “Get out of Jail Free” card courtesy of the politicians in the Federal government, their close symbiotic relationship with the agencies that are supposed to regulate them and a press that rolls over in adoration when they interview a them.

Yesterday Britain’s top banker echoed the cry that those that had benefited so greatly and cause so much economic devastation should be held accountable.

Today Al Jazeera (another outside the USA media outlet) runs the Feature Editorial entitled Will the Banksters Get Away With It? In it author Danny Schechter offers ten reasons why Wall Street ‘criminals’ get ‘bail-outs and not ‘jail-outs’ or never get punished.

Is Matt Taibbi or the issues that so many brought up about “banksters  and the privileged class  getting big coverage on network news or right wing outlets – NO

Remember Climategate?

Some stolen emails from just one university that did research into climate change supposedly proved global warming was a hoax. Now this got big coverage.

Since then, not one, not two not three, not for, but five independent studies have proved that their was “no credible evidence”

However, the climategate story befits the privileged classes who would NOT profit from cleaning up pollution.  The media and politicians promoted climategate with a avalanche of media reports. Yet almost nothing on climategate itself being a proven hoax.

This is the reality of what passes for news in the USA – A get out of jail free card if you are in the privileged elite and media a media drowning if you dare stand up against them.

Climategate, birtherism, unions blamed for everything, death panels, – you name it. It all passes for news

David Roberts concludes in What We Haven’t Leaned from Climategate

“U.S. politics now contains a large, well-funded, tightly networked, and highly amplified tribe that defines itself through rejection of “lamestream” truth claims and standards of evidence.”…hyped relentlessly by right-wing media, bullied into the mainstream press as he-said she-said, and later, long after the damage is done, revealed as utterly bereft of substance. It’s a familiar script“

So its little wonder that trillions stolen, lost, and looted by banksters gets no attention and phony controversies are hyped over and over again in the US media do.

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KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

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Technicals, Fundamentals & Analysis

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

BUBBLE-ICIOUS - Investors411 term for the stock market – We are all riding on the outside of an ever expanding &  Central Bank manipulated stock bubble. See Investors411 STRATEGY section for more

• The same old Fed manipulated stock bubble building trading pattern of small gains in small volume was back after taking a body blow the day before
• The impact of higher oil prices around the world has become a threat to globalized growth and US markets have not yet decided the impact higher oil prices
• Oil prices exploded  again to over $100 dollars a barrel. The highest price since Sept. 2008
• Yesterdays a confirmed the breakout in oil. Prices above $100 will have a bigger impact on emerging markets than the USA. So the longer prices stay high the worse it is for the economy.
• Stocks, can of course, can still be manipulated higher by the Fed’s quantitative easing.
• An independent ADP jobs report gave a surprisingly good number for last month +214,000. In a manipulated market good job news means less likelihood of Fed manipulation in the long term. So news is mixed for stocks.

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Shorter Term Forecasting Indexes

• The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar fell a significant 0.49%  yesterday . Oil prices now are by far the #1 forecasting index (see below) For stocks dollar short term trading pattern = Bullish
• McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] Rose to -5,52. Over the last three months the new parameters seems to be +/- 30 as an overbought/oversold level. MO Stocks outlook = Neutral

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Reading The Tea Leaves

Yesterday – “A Danger Will Robinson Danger Danger moment is here.  The potential for a quantum shift in the outlook of the US and more importantly the world economic picture is upon us because of higher energy prices.”

Sustained higher oil prices will shave GDP growth is emerging markets faster than more established markets like the USA. But both will feel the pain if prices remain high.

At some point even a manipulated US market, is going to start to feel the impact of higher oil. Today? Tomorrow? Next week? Next month? or down the road.

The dollar is falling and this does give bring up two important points.

• Dollar goes down and profits for US globalized companies go up.
• We are experience a MAJOR crisis and investors are NOT buying the dollar for protection.

What to watch today

• USO - ETF for oil - Oil up = stocks down
• UUP - (Tracking ETF for dollar) Remember - The dollar is a contrarian indicator. Bad dollar = good stocks
• AAPL – Bounced off its 50 DMA support level. As long as it hangs in above that everything OK

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Positions

Another 3% trailing stop today on both REMX & RJA today.

Will sell 1/2 of UCO if profits exceed 5%. 5% trailing stop on UCO.

Will post when I buy/sell in comments section of blog.

UCO -(2x oil prices)  Buy the dip. Why not, its a hedge against higher gas prices.

REMX (Rare Earth ETF) - Really believe this a good long term holding.  Hopefully longer term holding.

DGP – (ETF is 2X gold) . Set to follow silver and approaching breakout. Broke out to new all time high. Buy now or on small dip.

DBC – (Commodities ETF) For a more complete list of commodity ETF’s see POSITIONS listed at top of blog  DBC is tilted to energy. Perhaps preferable or a good alternative would be *DJP that is more agriculture and metals – Both DBC & DJP are on breakout runs. Buy the dip.

RJA (Agriculture commodities Index)An ETN, not an ETF. Hopefully longer term holding. .

UWM (2x small cap stocks) TNA (3X small cap stocks)

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Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See ”POSITION“ section of blog (at top of page) for lists of potential stocks & ETF’s including ”YOUR Stock List.” (YSL#4 is under construction.)

Egypt

Day 18

Peaceful demonstrations have spread to other areas of Cairo and Egypt. Al Jazeera continues to be the best source on the Pro democracy REVOLUTION in Egypt.

The people in the street realize the power they have in Egypt and it is indeed a power that can change the world.  As many have pointed out, (see comments section of blog) Mubarak’s narcissistic address to the nation did not play well with the pro democracy demonstrators.

So many peacefull protestors have given so much blood in the name of democracy in Egypt that it’s hard not to be transfixed by this transformative moment in the history of the world. So today’s blog today is abbreviated.  I’m watching Al Jazeera and other outlets along with many of you.

Back on Monday with hopefully a victory for democracy and a better world. Keep an eye on the comments section for any changes in both the Egyptian revolution and stocks

LONG LIVE DEMOCRACY AND FREEDOM!

KISS & Stocks (Keep It Simple Stupid)

Same Positions and outlook as yesterday. Link here

• Monday has usually a good day for stocks over the last few months. So there may be some upside at the end of Friday.
• UUP – the tracking ETF for the dollar is perhaps the best forecast tool for daily market movement.
• The worries that are most pressing at this time- Emerging Market Inflation, European Debt & keeping Suez canal open.
• The Fed’s liquidity tsunami still rules the US stock market.

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Positions

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Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See ”POSITION“ section of blog (at top of page) for lists of potential stocks & ETF’s including ”YOUR Stock List.” (YSL#4 is under construction.)

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Guns, Knives, Cavalry charges, sticks, stones, Molotov coattails have been used by Mubarak’s thugs to try to break the pro democracy demonstrators.

I’ve written Obama and told him as a contributor to his campaign I was ashamed of his lack of actions in supporting democracy and my association with him. YOU can reach him at LINK

Forgot who said it first, but Obama’s actions are like a major arms dealer selling weapons to one side, then stepping back and saying play nice to both sides.

Outstanding updates, heart felt emotions, and excellent posts in the comments section of the blog.  From Yesterday (scroll down) Some coherent thought on investments can almost always be found in the comments section too.

Al Jazeera LINK that has the latest. Slow connection . This network is getting overwhelmed with people wanting to see what’s happening. You can also try their You Tube page

Just skimmed this in NYT. If the US has indeed split with Mubarak -It’s about time – But certainly an announcement of a split has to be done by Obama.

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Think the Derivatives Problem is Fixed?

Two big bubbles are building

• What happens when the training wheels come off the Fed POMO program?
• What’s to stop the too big to fail shadow banks from doing the same thing again?

From the BostonReview, Omar Rosen, on Citigroup’s corporate derivatives team for 3 years tells of his experiences

Bottom Line – The bubble building of Wall Street greed goes on and on and on

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Kinetic Sculpture

Wow now this guy is a great sculptor. From the BBC – Watch them move. Thanks to EW for sending in the piece on Theo Jansen.

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KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

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Technicals, Fundamentals & Analysis

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

• Yesterday was “confirmation” of the previous day’s rally. Major indexes held onto their big gains from previous day.
• Typical low volume day that may have been worse, but for the Fed’s POMO program
• Tomorrow. we will have the monthly employment number. Remember – Bad news means more Fed POMO and in the short term this is good for stocks, but long term horrible for the economy. Here’s Jeff Miller on the report
• Mantra till it no longer works – still endorsing the concept that the Fed [POMO [schedule] is and will be the key factor in keeping a long term rally going. (see past Investors411 for many, many moons on this topic).
• Typical warning from too many stock analyst’s to count. Dow Over 12,000 = Buyer Beware.

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Reading The Tea Leaves

Still can’t believe crisis in Egypt has so little impact on market. Perhaps I’m letting my pro democracy bias get in the way. However I feel that if a momentous event like this does not impact the market, what will to turn off the bulls who have embraced the Fed’s quantitative easing?

The same holds true for the employment numbers tomorrow.

Bottom Line - Bad news is good for the markets because it means more quantitative easing. Right now QE #2 (quantitative easing or Fed POMO program) trumps everything – so running with the bulls until it stops.

What to watch today

UUP -The dollar tracking ETF. UUP in three week fall. Stabilized yesterday.  Very bearish pattern for dollar and therefore for stocks = bullish. Still about $1.25 above major support. This support level is the most likely spot bears and bulls will fight stage a major battle.

The dollar is a contrarian indicator. Bad dollar = good stocks

AAPL –  The tech general again closing in on an  upside breakout.

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Positions

No additions or subtractions to any position planed. UCO is only possibility if there is a dip. – Figure Gulf oil supply will be impacted by Egypt crisis. Oil dictators will be mad at Obama for not backing their fellow butcher in Egypt, and others like me are furious at Obama for not supporting Democracy.

UCO -(2x oil prices)  On dip

REMX (Rare Earth ETF) –  Rare commodity used in everything from some TV’s to hybrid cars. Really believe this a good long term holding.

FAS (3x financials) & UYG (ETF that does 2x financials) XLF is the financial ETF. - .

DGP – (ETF is 2X gold) Falling too fast. Wait till it settles.

DBC – (Commodities ETF) For a more complete list of commodity ETF’s see this link Rice and sugar agin at new highs.

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Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including “YOUR Stock List.” (YSL#4) which is under construction.

Photo from Al Jazeera

It’s become obvious that the USA and other western democracies are looking for ways to stabilize what happening in Egypt. For the time being this means behind the scenes support for the dictator Mubarak. Two major headlines today from Al Jazeera

• According to al Jazeera Israel who had stayed on sidelines is backing the dictator Mubarak.  Somewhat skeptical of this headline, because no  Israeli  government official has commented so far – it would inflame protestors and be counter productive.
• Again according to al Jazeera Protest leaders are calling for a mega demonstration Tuesday and a national strike.
• Caution – al Jazeera has a huge pro democracy and freedom bias for Arab countries. Also a huge anti Israel bias.

America’s dirty hidden secret.

Russia in the cold war ran a string of dictatorships that were loyal to Moscow. They used torture, killings & beatings by a secret police force to keep their dictators or ruling oligarchy in power. The USA oversees  a similar string of dictatorships that streaches from Morocco to the Gulf States. Our control may not be as tight as the Communist’s in Russia, but we certainly exert strong influence.

Some call it looking the other way because we are so dependent on oil production in the Middle East. Therefore, we say one thing about democracy and freedom while doing another.   The Russian domino’s fell one by one and after Tunisia, Egypt is the mega domino.

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Here’s an open letter to President Obama from a couple hundred University professors asking for the USA to United States to stand for democracy and freedom - “to stand with the Egyptian people it must approach Egypt through a framework of shared values and hopes, not the prism of geostrategy.”

Bottom Line – An orderly transition to democracy is preferable to a chaotic one for all parties. However, there comes a time in individual lives  and societies that you stand up for shared values or you look for excuses not to support freedom and liberty that we all cherish.

All of this is happening because we are dependent on dictatorship’s for oil and have no  concrete energy plan to break that dependence.

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KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

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Technicals, Fundamentals & Analysis

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

• Egypt is the major news. More uncertainty = down market. Any major signs of other mostly US backed dictatorships protestors seeking freedom/democracy would be harmful to stocks. The call for a mass rally/national strike on Tuesday is the headline
• Last week the +51,000 new jobless in the weekly jobs number was bad news for US economy. Remember, bad news for the markets means perhaps more quantitative easing from Fed. Therefore in a twisted way bad news is good for US stocks.
• This week we will have the monthly employment number.
• Obviously, still endorsing the concept that the Fed [POMO [schedule] is and will be the key factor in keeping a long term rally going. (see Investors411 for many, many moons).
• Most stock markets are down modestly, outside the middle east. This, at first blush shows the Egyptian news has been accounted for by US equities

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Reading The Tea Leaves

Egypt is obviously the # 1 consideration. This is a potentially very volatile situation that can spread that’s impossible to call. So get ready for whatcould be a roller coaster ride.

Our major warning last week came from a Tom DeMark and another from and Ian Woodward HGSI Paul R’s favorite analyst- see comment section of blog) The Dow is up 9 weeks in a row (you may have to exclude Friday) and many analysts feel that’s overbought in the long term.

It looks like the volatility that was apparent Friday and throughout the weekend on worldwide stock exchanges has settled down. Most major worldwide exchanges are down slightly.

The Super bowl is coming up and America’s short attention span could waver.

What to watch for today

UUP -The dollar tracking ETF. Investors may flood into dollar because of worries in Middle East sending it higher and stocks lower. Definetly what to watch today.

AAPL –  Just a bit further away from upside breakout.

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Positions

Under consideration - Nothing today. But check into comment section of blog for any radical change because of Egypt. May consider a short or long position in leveraged ETF.

DDM - (2x DOW) The trend to big cap stocks is apparent.

UWM (2X small cap stocks) Hope, but doubt this will be long term hold.

UCO -(2x oil prices) All commodities, are under pressure from inflation worries in emerging markets. UCO broke support level in big way. Waiting for it to settle.

REMX (Rare Earth ETF) –  Rare commodity used in everything from some TV’s to hybrid cars. Really believe this a good long term holding.

FAS (3x financials) & UYG (ETF that does 2x financials) XLF is the financial ETF. - Shadow banks have numerous advantages. – Opaque, special help from Fed and your still on the bottom line to bailout too big to fail institutions.  This sector is being manipulated higher by Fed. Those that can overcome ethic problems with shadow banks could consider buying. Yes, this is another bubble building.

DGP – (ETF is 2X gold) Falling too fast. Wait till it settles.

DBC – (Commodities ETF)

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Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including “YOUR Stock List.” (YSL#4) which is under construction.

The Truth & It Hurts

How the rest of World reports a story – WikiLeak’s on Iraq war -

Iraqi Father and Daughter

On Friday at 5:00EST the largest leak of classified military documents ever was realeased on the Iraq war by WikiLeaks. They covered the Iraq war from 2004 to 2009. Here’s WikiLeaks war logs referenced & outline (400,000 classified documents to browse)

This is the major international headline throughout most of the world. Our media (covers only 4% of the world’s 7 billion people) as you might guess is downplaying this document dump with – other data, stories, personal life of Wikileak founder etc..

So, since you get those sources, lets look at what the rest of the world sees and reads

• Al Jazeera –  This is their English/International version.
• Le Monde (in French)
• The Guardian (English)
• Der Spiegel (Germany)

These are 4 of the 5 (The last was the NYT) that were given the documents in advance. You can’t deny what Sec. of State Clinton said in condemnation - “in the most clear terms… the disclosure of any classified information that will put the lives of Americans and others at risk.”

Some rather obvious observations

• The extent of torture, war Crimes, murders, civilian deaths were far greater than originally reported in Iraq.
• Dehumanizing the other side is pretty standard in war, but 96% of the world that’s not American gets to see the Muslim parents and children suffer. Most American’s  don’t.
• The single largest cause of creating  Islamic terrorism since 2003 has been the “unjust” (word of UN secretary General) invasion of Iraq & war on terrorism

American (including me) will go back to our football games, digesting political fabrications, and our lives. But Remember YOU are paying for all this.

The father, brother, son, daughter, relative or friend of those who are murdered, tortured raped and assaulted can and do turn into tomorrow’s terrorist.

How would YOU react if it was your child???

Photos from IrregularTimes.com

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!

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

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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

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$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!

Liming Nuclear Arms

This is significant good news for the world. US and Russia agree to cut nuclear arsenals by @1/3. Today Obama was giving a commencement address at University in Moscow. Detente which was a critical part of winning the cold war is back.  Australian  press on the story here

Violent Protests in China

No, this is NOT Iran . Violent riots in the western Xinjiang Uyger Autonomous  region of China continue. China press puts death toll at 156. Video link here (caution more violent video)

Contrast the coverage in American media (even this blog) with China vs Ira n .

Al Jazeera has a well reasoned round table about internet reporting & bias coverage in Iran here (warning its 24 minutes)

We look at news through huge filters or blinders and unless you understand how the rest of the world see it you have almost no hope of making progress.

The Great American Bubble Machine

Mike Taibbi in The Rolling Stone has another provocative and illuminating editorial on how Goldman Sachs has been up to its eyeballs in profiting from building American economic bubbles – here

Unfortunately,  this crowd is the one that has Obama’s ear on economic policy. Bob Sandisky has, as usual, a passionate response to the Taibbi article in the comments section of blog. – One quote

The Bush administration set in motion a new paradigm that basically changes the essence of America, from "We the people being endowed with inalienable right to pursuit happiness" to substituting People with Corporation. – We the Corporation.

HELP in Health Care

Nobel prize winner Paul Krugman has an excellent article on health care here

The first numbers on the cost and # of people covered in the heath care proposal came out poorly, but last week the budget office offered a much better and under reported  assessment.

The reason that this news is not getting out is the other side is spending $1.4 million dollars a day in PR against public healthcare. All of that money spent fighting this will be added to your health care bills.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Investors411 record – 4 1/2 years of beating benchmark S&P 500 (see results click  6/25 & scroll down)

Technicals and Fundamentals

Markets were basically flat yesterday. Volume up but below average

The lack of volume still troubling factor. – One things for sure-money on the sidelines is staying here. Its hard to make a long term forecast with volume as a confirming factor .

The major upcoming fundamental factor is earnings season which goes into full swing next week.

The S&P resistance level of 875 is the line in the sand. If the index closes below this level, we most likely will be in for another leg(s) down. SPX at 899 .

Significant forecasting tools/Indexes for stock markets

Note - Repeated statements in brown.

These are important forecasting tolls, but secondary to volume .

BDI - The Baltic Dry Index measures the flow of goods (world trade) . BDI fell sharply again on Monday.  What’s worse, is that the index broke down through its major support level at 3452 and closed at 3375 .  WARNING – This chart is more a long term indicator, but the breakdown in trade is very significant to any worldwide recovery. BEARS RULE

$USD - The Dollar rose +0,23 % yesterday This is a relatively minor amount . The strong inverse correlation between the dollar and stocks has existed for many moons. Dollar up = markets down. . Dollar closed at $80.45 and has been trading for  a month between @$81+yesterday= and $79+. So its almost in the middle of its consolidation range. Long term Bearish pattern for Dollar (bullish for stocks ) that is consolidating pattern now (neutral )

WTIC – There was a huge 4.02% drop in oil prices yesterday. 9% over last week. (see chart) Things may stabilize temporarily, because it is sitting on a major support level.  However the 5 day fall has been significant and has NOT been accompanied by a significant rise in the dollar.  What oil markets seem to be saying is demand is weak out there and the world’s economic picture is less bright than traders thought. = Bearish for stocks

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Back to CAUTIOUSLY BEARISH outlook. This is in anticipation of a further breakdown of the BDI and S&P 500 .

NB – Volume has confirmed nothing. So confidence in above predictions is a bit shaky . However, the BDI has broken support and oil prices are plummeting.

Our Positions (For more see Positions section of Investors 411-scroll down)

The Hedge – Buying equal $ amounts of the SDS (a short) & the QLD (long). So far this trade has netted less than +0.50%. – largely because of a real bad day yesterday. The principle behind this is that the top 100 NASDQ stocks are going to outperform the S&P 500.

It does not matter which way the market moves, only that one index outperforms the other. Plan to hold this position until we have a 5 to 10% gain or loss and then sell it.

If you would like to enter this trade  "buy the dip." Wait for a day (or better two) when the S&P 500 outperforms the NASDQ (like yesterday) and then invest.

Again for more information see Postions section of blog.

Yesterday’s Recommendation – Traders  – take some $ (1/3) off the table in China (FXI ).

I plan to buy back all recommended foreign ETF’s – just hopefully at a lower level. Perhaps when  S&P dips to support level @875

More tomorrow

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

“The significant problems we face today cannot be solved at the same level of thinking we were at when we created them.

Albert Einstein

Barack Obama addressed (video & Transcript) the Muslim world yesterday in Cairo Egypt. He earned a standing ovation from the crowd of 2500 many with “tears in their eyes” (al Jazeera report) and no one threw shoes.

If you think in one dimensional fundamentalist terms like Osama Bin Laden and others you hated the speech. True fundamentalists everywhere believe your “either with us or against us.” In fact, Obama did not even once dignify the radical extremists  by  mention the word “terrorist” in his address. Instead he mentioned the word “peace 29 times.

“I have come here,to seek a new beginning between the United States and Muslims around the world; one based upon mutual interest and mutual respect; and one based upon the truth that America and Islam are not exclusive, and need not be in competition. Instead, they overlap, and share common principles — principles of justice and progress; tolerance and the dignity of all human beings.”

Yesterday the USA started building a bridge or, for those old enough to remember, you might call it introducing”detente.”  Extremists need growing hate to swell their numbers. Obama took that away.  al Jazeera, the #1 media outlet in the Arab world, editorialized Obama’s speech “was more than just soaring oratory and soothing words.”   This was just one small speech of a man, but perhaps one giant step for mankind.

For more see David Levy’s 10 Comments, or David Corn’s Obama’s Tough Tour de Force

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

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Technicals & Fundamentals 

The NASDQ was the only index that had confirming (the price move) above average volume. Volume is still not confirming the price move for both the Dow and the S&P 500.

8:30 AM EST Unemployment Numbers for May -345,000 Much less than expected and a 154,000 drop from previous month. Last two months revised down @80,000 and unemployment rate at 9.4% Wow! Blow out numbers for stocks.

$USD - The Dollars fall significantly impacts the rise in oil prices (oil , for the most part is traded in dollars) The fall of the dollar influences a  lot more (stuff for future posts)

XLF - The ETF that tracks financials (mostly shadow banks ) rose +3.58%. 

WTIC - Oil prices rose +4.07% to $68.81 – A new high for the year. As stated before – “Higher oil prices are an indication of economic recovery, but also hurt that recovery because it means energy prices will rise.”

BDI - The Baltic Dry Index measures the flow of goods (world trade).  After what seems like almost a month of consecutive up days in a row the BDI fell yesterday.  A one day drop from 4,291 to 4080 in itself is not significant, but a 5 day trend to the downside would be. 

Reading The Tea Leaves -  

The longer we stay above breakout levels, the better it is for the bulls. Lack of volume is a concern and we have to watch the BDI to see if the reversal grows. Until we fall back into the consolidation pattern the new CAUTIOUSLY BULLISH outlook holds.

The Hedge

This is both a new concept and a new position for Investors 411. It’s really not that complicated and does not involve you buying puts and calls. It’s simple and if it works you could money no matter if the market goes up or down.

Basically your investment is that the NASDQ 100 will outperform the S&P 500.  If markets rise the NASDQ will go up faster (it did today by +0.17% – see above chart) If the markets fall, hopefully the NASDQ will fall less.

Reasoning – A large part of the top 100 NSDQ are well capitalized tech companies and tech usually outperforms the S&P in up markets. The S&P 500 contains a lot of insurance and financials that already have had a massive run. In the future there will be a battle over how to regulate these companies. This should negatively impact these stocks. 

Technically this hedge has been working over the last two months.

Here’s the trade – Buy equal dollar amounts of the following two issues.

QLD -Does @2x long what the NASDQ 100 does (ProShares Ultra ETF of QQQ)

SDS – Does @2x short what the S&P 500 does (ProShares Ultra Short S&P 500)

Because the NASDQ outperformed the S &P by 0.17% this hedge probably made @0.34% yesterday. Caution there is rarely a 100% correlation to the the two major indexes do. Basically it aproximates.

Either QLD or SDS is going to make money over time the other will loose. You probably will not make as much $ as you will in going all long or all short. But my read of the tea leaves is this stands a good chance of being a winner,  I’m personally committing @15+% of portfolio to this hedge.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING !