Fear

Each day two classrooms in the United States are emptied in the USA because these children are diagnosed with cancer.

Yet the brainwashing American media yesterday, from networks to blogs, focused on a “mentally ill, homeless and violent” man with guns and a bomb holding three hostages in Silver Springs MD.

Our culture has simple become conditions to over hype anything with guns, bombs and a potential terrorism because fear of terrorism sells politically and commercially. Your chances of dying from cancer, diabetes, heart attacks, or going brain dead from alzheimer are thousands of of times greater than a terrorist attack. Sure, we should be vigilant but we should also recognize reality.

Wikipedia reports that only 16% of the approximately 200,000 rapes a year in the USA are reported. How many classrooms are emptied because of the million women who get raped each year in the USA? Yet our American media growing trend is to focus on any potential terrorist related violence rather than rape.

Guess which country is #1 in the world in number of reported rapes so far this year?

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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!

Technicals, Fundamentals & Analysis

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

Mantra for the month - The Black Box/High Frequency Traders BB/HFT control the majority of trades. Jim Cramer -”BB/HFT make up 80% of trades.”

Quotes from yesterday - “Churning. “More often than not a big battle like yesterday between bulls & bears means a reversal in direction. In this case that would be a rally….Overall think the BB/HFT’s are setting up for a rally.

We had one big rally in slightly above average, but decreased volume. (sorry for  ”?up” above – couldn’t clearly read the NASDQ volume chart) This is your typical rally in a BB/HFT controlled market.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar, of course, fell  a whopping -0.82%.  Because the BB?/HFT are obsessed with the inverse dollar/stock relationship, you’d naturally expect a huge drop in one gets a huge rise in the other = Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rose +1.03% yesterday. After a 5 week rally the BDI has flattened out. Now starting to rise. = Neutral/Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose to +6.81 Now above Zero, & both 50 & 200DMA’s. Nowhere near +/- 60 so there is lots of wiggle room on each side, but momentum obviously with bulls. Therefore = NEUTRAL

Reading Tea Leaves

Monitor, a trader, in comments section of blog describes the MO forecasting tool best – “An observation – The McCellan Oscillator works!!!!! Plus or minus 60 seems to be a reasonable point where markets turn. If you like to take risks just go long or “buy the dip” when its under minus 40 and wait. Within a few weeks it will be at over 40 and sell”

It actually not all that cut and dry, but the general focus seems to be correct for a Long Term NEUTRAL market.

Mea Culpa - For long term investors there was a point over a week ago when the MO was below -60 & the Dow fell another 100 points which was a buy point.  Personally, as the record shows, I did buy some long positions TYH & SSO, but let the FEAR of loosing $ force me out of those positions with minor gains instead of holding onto those positions. My mistake.

Obviously another typical BB/HFT rally where short positions are forced to buy stocks to cover their positions. This gives added momentum to the rally.

September looks to be one roller coaster ride, now with an upside bias. There will be buying and selling points for both traders and investors. Stay tuned.

The obvious sub trend brought about by globalization is the economic deterioration of the US economically  vs the ecomomic rise of emerging markets and energy rich countries (peak oil mega trend – see Overview section of blog).

Will the emerging markets grow fast enough to pull the USA out of the Great Recession?

Positions

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

Current positions –  EWS (Singapore)

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

www.talkingpointsmemo.com – Photo – For more on story see link and link

Terrorist Plot Attack

Yes, there was a horrific subway attack in Russia, but front pages everywhere in the USA did NOT report on the 9 terrorists caught in our country. They were, according to charges, picked up for “Seditious Conspiracy, Attempted, Use of WMD’s…Plot to Attack Police” and other charges.

If this group was Gay, Muslim, Jewish, Black, Mexican, or some other minority it would have been headline news in American media.  But these were white Christian militia terrorists and the media in the USA looked the other way.

Blatant Biased and Bigoted – The American media fear mongers what it wants and stories about Christian terrorists being arrested are just ignored because they are Christian.

Another example – the BBC last weekend headlined and uncovered a massacre of over 300 people by the LRA (another Christian terrorist group – often called the Lord’s Christian Army) in the Congo. Europe heard all about it. Did you see any American media pick up on the story?

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

Check out comments section of blog – Both Critic & Ewanapat have some very relevant fundamentals about IMAX & 3D stocks.

Throwing up your hands in frustration is not the answer. Technically, its hard to tell what’s holding up US equities. We had another day when volume (the #1 confirmation factor of a price move) fell as stocks rallied.  There has NO conviction/volume behind stocks for many moons. This week is continuing the low volume quarterly pattern

Holiday weeks (Easter) usually bring lighter volume. Its also the end of the quarter and money managers like to buy hot stocks to show their clients in their quarterly reports. The job’s picture is supposedly better. So why does there continue to be no volume behind rallies? What’s holding up stocks technically?

On individual stock technical analysis using volume is still sound, but it is irrational for US equities as a whole.  Same prediction/Fearless Forecast hold for rest of week.

The dollar is the index to watch. It goes up = stocks go down. It goes down = stocks go up. A new high for the dollar would be bad for stocks.

Significant Indexes

• McClellan Oscillator rose to -3.92 yesterday. +60 or above = Overbought -60 or below = oversold. StockCharts has a better version of the McClellan chart ($NYMO)LINK. – We right in the middle so NO clear signal. However we are still in bearish pattern of lower highs and lower lows.
• US Dollar – fell s -0.40% yesterday. The two day drop of -1.09% takes some of the pressure off the dollar’s breakout to higher levels. What the dollar does over the next few weeks is critical to stocks and economics around the world. The dollar has risen 10% since Dec.. This means that US & China (their money is pegged to ours) exports are 10% more expensive to the rest of the world. A higher dollar,therefore, puts real negative pressure on stocks and an economic recovery.

Positions

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

YOUR Stock List

This list has been developed by YOU sending in your stock picks, we discuss them individually (usually by email) and if they are trending positively they get included in YOUR list. Thanks to many of you who have sent in choices. If you payed attention to the List published on each Tuesday, you’ll find a lot of winners. One way to back check this is to use the calender at the top of the blog – click on past Tuesdays.

Caution- This is just technical analysis and lots of other factors enter into a decision to buy or sell

NB -Last Week’s comments in black. This week’s violet. Chart links underlined in Blue

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

• CAAS –  Some increase volume behind dip, but at strong support level - A risky Chinese company, but its now or never time to buy the dip. If you bought you won. Made higher high on chart. Pullback due.
• PCLN –  Still consolidating after breakout - A buy the dip stock If you bought you won Consolidation due.
• F –  Huge sell off last week and strong but less volume rally yesterday -Too risky Looks like its running out of gas – too much downside volume – wait
• IMAX . Made a strong move yesterday and broke out of  short term consolidation pattern - A buy the Dip Stock If you bought you won Overextended now, but you know the story – buy the dip.
• CSCO, Seems too over extended from 50 day moving average, but clearly a market leader - Will move with technology. Another winner, but weak volume suggest top is near – Wait
• SHOO – Consolidating in what looks like cup & handle trading pattern - A buy the dip stock HUGE winner – way too over extended to buy now, but buy a reasonable sized dip.
• ICON,  Failed breakout back in consolidation pattern - Potential, but too risky. Another winner. Retreated yesterday in weak volume = bullish. A buy the dip stock.
• VPRT Consolidated and made a move yesterday - Possible breakout candidate. Breakdown in heavy volume.
• DGIT - A bunch of higher lows over last month in “ascending wedge” pattern & at its resistance level - Potential breakout stock Pullback in weak volume is bullish. Another chance at breakout, but risky.
• VCI Big fall/volume Friday partial recovery yesterday - too risky  Dip in weak volume = bullish. Faces resistance, but potential breakout candidate.
• CREE –  Still consolidating a buy the dip stock. Still consolidating in weak volume near high = bullish. A potential breakout candidate. Still a buy the dip stock.
• SNDK – .   Dipped last week and major rally yesterday A buy the dip stock Another Winner. now consolidating  A buy the dip stock.
• VSH – .   Strong volume on down days -Weakening Too much big volume behind down days.
• CTRP – Dipped in weak volume last week, rallied off support level - a buy the dip stock HUGE winner – Decent volume at new high. Over extended, but buy the dip
• CNAM Fall in weak volume, two day rally in strong volume – Big risk China stock, but potential big reward. If you got guts a buy the dip play. Breakout failed, now consolidating. Again more risky, but buy the dip

New plays that have similar 3d fundamentals as IMAX. Personally I’m more comfortable with this group because I believe in the fundamentals behind 3d technology. Some fundamental analysis included. Problem with these are their sales are not pure 3d plays.

• DWA (Dreamworks) Think their new Dragon 3D movie will be a success and move this stock up. Dragon’s did not live up to expectations. Big volume behind downside move. Only for short term players who want to buy elliptical downside bounce.
• CNK (Cinemark)  Still a bit over extended – Tempting Consolidated over week & broke out of that pattern yesterday. A buy the Dip Stock Winner that has dipped yesterday Think weekend Titan’s movie will bomb and hurt box office. Careful, but still buy the dip.
• RGC (Regal Entertainment) Too overextended wait for dip.- Tempting Just keeps moving higher  Dipped last two days. Same fundamental problem of Titans, but better movies coming up.  Still buy further dips.

32 million new heath care customers (Obama/Pelosi health care bill) means some stocks are going to rally on this increased supply and the growing aging population of baby boomers who need health care. New group

• ESRX (Express Scripts) – (see yesterday’s blog) Investors411 own this stock. - Broke out, now a bit over extended wait for dip. Rally yesterday, but weak volume makes it a risky buy the dip.
• TEVA (Teva Pharmaceuticals) Gone elliptical - wait for dip. Now dipping in reduced volume = bullish. A buy the dip stock.

Analysis – WOW – Look at all those buy the dip stocks that were WINNERS Some of those stocks are a bit over extended, but there are sill some “buy the dip candidates” and (not quite as good) “potential breakouts. “Almost all of these stocks have the potential for a long term run.

The McClellan Oscillator is near Zero so overall market upside and downside risk is equal.

Best read of tea leaves - This week should do well and Monday’s are usually good. TEVA, & others that fall in weak volume that do not have a strong resistance level are best shots at fast gains. However a breakout from a longer consolidation is usually better long term play.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING