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“A Very Angry President”

One thing American’s seemed to have made clear – they want an angry man in the White House. Standing up to BP and General McCrystal is the mojo American’s want.

Josh Green from the Atlantic and the Boston Globe, goes into depth on the Obama Presidency. It’s substantive, different and an interesting editorial.

Financial Regulations Finished

Breaking News this AM is congress has finished its work on the FinReg Bill. Here’s the WSJ on the major provisions within the bill. There are lots of knowledgeable people skeptical of this statement but FDIC chair Sheila Bair says, “This will end Too Big to Fail.”

Perhaps the best judgment of how effective this is what happens to the shadow banks stocks – GS, BAC, C, JPM etc. How to judge if Wall Street or Main Street won Will you continue to socialize risk while the shadows privatize the gains? -A major decline in these shadow bank stocks means too big to fail worked.

Afghanistan and Beyond

Both Mama Jama and Jim J came up with some very interesting points on Afghanistan/Iraq//Middle East yesterday.

• The Israeli’s have tried all sorts of different means over the last 5 decades to change the Mid East. They failed – why should the US succeed?
• If some sort of democracy establishes itself in Iraq, to will be confrontational to the USA like Turkey’s democracy now is to Israel
• If Egypt were to change to a democracy tomorrow, that democracy would be far more hostile to both Israel & the USA.
• Would add that the only “seemingly” pro western Muslim governments like Dubai & Kuwait are dictatorships.

Why keep pouring $ down a sink hole that grows our deficit and divides our nation.

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

Repeat - ” Any analysis of stocks has become an analysis of what the “Black Boxes” of  huge institutions with their high frequency trades & computer algorithms are doing.” They comprise 80% of trading and right now the huge currency markets are dictating their moves.

The upcoming battle - Check out the chart of the dollar below. The dollar has stated to move sideways after a three week fall. The major support level/50 day moving average is rising @$0.15 each day and now within $0.80 of the dollar.  The fact that the dollar has stopped falling in front of strong (rising) support level has spooked currency traders. The 6 day consolidation of the $USD means its lost some downward momentum that was lifting stocks.

The falling dollar rising stock army (green) has charged the enemy (the 3 week drop which rallied stocks) Technically, the rising dollar falling stock army (red) has built its technical defense on the 50 Day Moving Average. The green army, having seen the strength of red army forces is now moving sideways hoping to find some hole in the red army lines.

Perhaps some kind of fundamental news (like the European economy is better than thought)to shift the balance and the green army will then find a hole and break through the red army’s barricade/50DMA support level. However right now the sideways movement (consolidation) shows a weakness in the green army

The red army’s 50 DMA is steadily advancing. Yesterday whole bunch of the green army cut and ran and stocks declined in moderate volume. The bottom line for stocks – BEARISH

One hope for the green army is that the conditions become so oversold in stocks that they can mount another charge. We’ve gone from +80 on the MO to @-30. (see below)

Significant Indexes

• McClellan Oscillator (MO) fell significantly to -28.91 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. NEUTRAL
• US Dollar –  The dollar fell slightly yesterday -0.04% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Dollar up = stocks down and visa versa. The dollar has fallen for the last 3 weeks, but has consolidated (traded sideways) over the last 6 days as the 50 day moving average/support level moves higher. This is where the Black Boxes have focused their attention. Bearish
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped. BDI is in free fall from @4200 to  2502 yesterday. This is a huge -40% drop in 5+ weeks.  Often a leading indicator for stocks. Now at/just above a major support level. Rate of fall declined again yesterday. This index often makes slow changes, so diminished decline  could be the start of a reversal. However, clearly long term  = Bearish

Positions

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

Have not yet had a chance to Update over last weekend but there are NO positions held at this time.

Dust off  YOUR stock List and ETF’s. Check out Paul R and others worthy suggestions in the comments section throughout the day. Which stocks/sectors have been holding up the best?

The MO has gone from @+80 to -30 and sure looks like momentum will carry us to to -60 and beyond. When US equities get oversold (-60 on the MO) the odds of at least a short term rally, especially in sectors or stocks that are outperforming, are in your favor.

Still watching DGP (ETF that’s double long gold) for a dip close to its 50 DMA) – Will buy.

We are on the cusp of change again for stock’s long term outlook. Technical aspects for stocks are bearish and it looks like the currency market is turning bearish for stocks. (see above) The fundamentals or the outlook of companies in earnings season (two weeks away) will ultimately determine the direction. Even the Black Boxes will notice. But, for now downgrading to CAUTIOUSLY BEARISH.

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING