The list of photos above on financial reform was from Dylan Ratigan’s MSNBC show. Obviously you can add to list.

Financial Reform DOA

Simon Johnson and the folks at the Baseline Senerio have thrown in the towel on financial reform. Virtually every Republican caved into the shadow banks lobbyist, but the real disappointment - so did Obama, Geithner and Summers and many Democrats. It’s disheartening to read that the Obama administration helped kill Kaufmann/Brown legislation and other substantive reforms.

There may be a few crumbs that the shadow financials have lost, but opaque casino capitalism where your FDIC dollar in banks insures their trading of highly leveraged derivatives will thrive – Privatizing gains and  socalizing losses continues. Shadow financials, obviously would rather trade derivatives than make less lucrative transparent loans to homeowners and buisnesses.

The shadows of over leveraged, opaque, Casino capitalism will thrive in the coutry that is/was the leader of the free world. For the future, let’s borrow a line from Shakespeare’s Macbeth- Something wicked this way comes

Tea Party Patriots and Deficits

Deficits are bad. No question. Building a future on growing debt if you own 50% of the worlds weapons leads to one of 2 things – You bankrupt the future, or you kill your debtors. I suppose you could find a third way where you hold a gun to the head of a debtor, but after a while somebody’s going to kill somebody. – Again – Something wicked this way comes

However,  Before you worry about your debt you have to worry about the soundness of your financial system and keep it from collapsing.

• Fixing financial problems and giving us a fundamental transparent capitalism would enable real transparent, democratic, economic, growth.(see above)
• Increasing debt to keep our financial system (even though it was/is a shadow system) from collapsing and creating a second great worldwide depression was more critical

This is what TPP’s can’t understand. We’ve prevented a worldwide economic meltdown, but we haven’t fixed the system. These two priorities are the foundation of economic growth and therefore supersede deficits.

You want to cut military spending, put a means test on social security/medicare, raise taxes to what they were under Reagan – great. It will cut deficits.

However cutting the National Endowment for the Arts, cutting funding for some pork project, screaming drill baby drill is NOT going to decrease the $13 trillion deficit in any substantive way.

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

The news that China was devaluing its currency announced over the weekend got sharply tempered. As uncertainty over the China move grew, so did the dollar and the algorithms used by the “black boxes” that control 80% of stock trading kicked in and sold stocks. A triple digit Dow gain faded into a loss = Bearish

This is hardly the first time the Chinese and economists have sharply tempered a government statement about devaluing currency. Let’s take that feather (for now) from Obama’s/Geithners cap and wait to see what happens as the G 20 nations meet.  This also toasts the Fearless Forecast for this weeks trading.

The reversal in the dollar (See below) could mean an overall change in market outlook, especially if the dollar moves higher again today. Today would be confirmation day of the dollars move higher yesterday.. Right now the major institutions  that run the markets have set their stock market algorithms to currency fluctuations.

FXE – The ETF that tracks the Euro sure looks like its starting to turn and head lower.

Bottom Line – The one way to put the odds in YOUR favor that has a reasonable chance at success in stocstoks/ETF’s is to use the MO. The higher it goes the more you sell, the lower it goes the more you buy. Obviously NOT a hard an fast rule, but a good general guide. Currently, as explained above, currency fluctuations are dominating trading.

Significant Indexes

• McClellan Oscillator (MO)fell to +35.08 [+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. Clearly more overbought than oversold, but has pulled back from overbought levels.
• US Dollar –  The dollar rose yesterday +0.43% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Dollar up = stocks down and visa versa. Yesterday – “The dollar seems destine to fall to its 50 day moving average which is $1.06 lower and rising.” The dollar fell to within 0.39 of its 50DMA to $85.01 then rallied a significant +0.94%..  This was the largest gain in the dollar in 11 trading session. For stocks = Bearish
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped is in free fall from @4200 to @ 2600 yesterday. This is a huge -38% drop in  Often a leading indicator for stocks. Now at/ just above a support level. Clearly long term  = Bearish

Positions

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

Have not yet had a chance to Update over last weekend.

ETF to watch today is the China ETF - FXI – up +3.48% yesterday. The stock from Your Sock List is China’s BIDU

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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Regulating the Casino’s

This is the week some sort of financial regulation begins to emerge from congress. Baseline Senerio has the best stuff on this here and here and here

It’s truly unfortunate that Obama is NOT leading the charge to regulate shadow banks or even substantively backing Volker.

Casino Capitalism

It’s critically  important if you are an investor or trader in stocks  to recognize stock prices are being dominated by massive institutions and hedge funds with ultra huge high speed computers.

Mutual funds and your average investors and you day/swing traders etc. make up only @20% of the market. Many average investors have realized that opaque US casino capitalism and stock markets are rigged. They’re staying out of investing.

They trade 24/7 worldwide in currency/bond and stock and are in and out of a company like SNDK often in a matter of minutes.

The best we can do is to follow the footprints (perhaps a better analogy would be is to follow the elephant droppings) of “masters of the stock universe.”

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

Another low volume rally occurred in the last 45 minutes of trading.  The key technical that’s showing the most correlation with the US stock market – The Dollar – dropped a bit less than -0.50% (see below) in this 45 minute period and this sent stocks on late day rally.

Some auction of Spanish bonds went well. Spain is the S in PIIGS + H (Hungary) – those countries we know are NOT doing well across the pond. Spain EWP (US ETF) gapped higher at the open for the second day in a row, fell, then consolidated mid – day and rallied into the close. At the end of the day Spain’s ETF shot back led all world markets higher up +3.45%

Spain, because of its size and seriousness of its debt is key factor in Europe’s debt problem. Good news here = Bullish

A double gap higher off a low is certainly bullish (even in long term), but a triple gap higher often means a stock is over extended and will correct. = Bullish

UUP is the ETF that tracks the dollar. EWP (Spain’s ETF) is now the cutting edge to focus on. It goes up, the dollar goes down and stocks rally. France and Germany are more important than Spain (bigger stronger economies). But if Spain tanks its big enough to take a lot of  Europe then the world down with it.

Right now we’re still in the discovery stage,  of which countries in Europe are in what size trouble. This extends from Russian satellite countries on the East to Spain in the West.= Bearish

The most important thing to recognize are stock prices are being dominated by massive institutions and hedge funds with ultra huge high speed computers. Mutual funds and your average investors and you day/swing traders etc. make up only @20% of the market. Many average investors have realized that opaque US casino capitalism and stock markets are rigged.

Fearless Forecast for Week – Rally Ho on European Sovereign Bonds & Spain at the end of the week. Should continue this week. Another successful sovereign debt auction in Europe could really move the dollar lower and US equities higher.  I haven’t the knowlege to to understand how deep the European debt problem is. Like the USA it’s hidden in the shadows of unregulated derivatives.

#2 reason for arally is regulatory mandates on shadow banks and casino capitalism seems to be loosing.

The low volume gives the Huge institutions and hedge funds even greater advantage in manipulating markets.

The area on the benchmark S&P 500 around 1105 to 1110 is the next resistance level. SPX at 1091.

Here’s the problem – The MO is starting to reach overbought territory (see below) and this could limit stocks up side (see below) The last time the SPX got up above 60 (high of 75) the SPX was at 1220. We could be at 60/75 well before the SPX reaches 1120 (one hundred points lower)

Nevertheless, those algorithms created by the super computers are spitting out buy signals.

Significant Indexes

• McClellan Oscillator rose to +43.30 [+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. We moving close to overbought, but still basically = NEUTRAL
• US Dollar –  The dollar rose Friday +0.33% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. The dollar was @ +0.50% higher and fell into the close.

Reading the Tea Leaves -

Currency markets>Bond Markets>Stock markets. Stock investors are the tail and the tail does not wag the dog. The action is in Europe. If European debt is bought at a reasonable rate, US stocks will improve. Right now EWP (Spain) is the ETF to watch. Of course, there will be more European shoes to drop. But none did over the weekend.

Positions

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

All the stocks on YOUR stock list as well as ETF’s like FXI (China) EWZ (Brazil) and those that mirror the US indexes (long or better) should do well until ovebough conditions exist.

Expect some sort of dip when the MO gets into the 60/75 range. Perhaps tomorrow.

CAUTION – I don’t have the inside knowledge to predict what will happen in Europe. What I can tell you there is a strong bounce off the bottom in Spain that’s leading the charge. Those huge institutions with their super computers have recognized this and are buying dips in US stocks.  The real question is who is buying European debt?

Best guess – Institutions/govenments that can hide their books and would get hurt by a collapsing Euro.

Change in outlook – This is tentative . Upgrading to NEUTRAL. Technically, this looks justified, but framnkly, fundamentally I sure don’t see the light at the end of the tunnel.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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Teddy Roosevelt

Back in the early 1900 Republican President  Teddy Roosevelt busted up the big monopoly shadow banks when they tried to take control of government.  Big Wall Street banks have increased their control over Washington for almost 3 decades. Is Barack Obama a Teddy Roosevelt?

Can financial reform end the too big to fail problem? “Big shadow Banks have become even more powerful since the 2008 meltdown.”  Worthy editorials & videos

• Baseline Senerio’s MIT prof Simon Johnson today on Paul Volker
• Again MIT’s Simon Johnson on Steven Colbert show. As always humorous, but informative video (Interview starts at 15.00 minute mark into show and last 6+ minutes)
• Bob Kuttner former Businessweek & Boston Glob reporter who has his own mag., American Prospect on banking reform and the need for a game change like Teddy Roosevelt

If Democrats want an issue to run on in November. This is it. But perhaps/probably too many  are owned by bank lobbyists.

Bottom Line – If the financial legislation ends the too big to fail problem its good. If not it stinks.

The Public Option Did WIN

The “inclusive, single payer, cost effective, money saving ($61 billion over 10 years – CBO) robust Public Option” was won in education. This overlooked  bill was passed along with Health Care reform and cut out the banks (middle men) and opens opportunities for anyone seeking help at the college level. Jeff Cohen editorial

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 each weekend

Another day of weak volume.  US equities were basically flat. Flat prices in high volume indicates a shift in course. Flat prices in low volume indicates little.

Good news was consumer confidence rose last month. Seeking Alpha (one of the best financial sights out there) presents an interesting long term view that low consumer confidence has historically been a good time to buy stocks. Bad news was concern over sovereign debt (see below)

KING DOLLAR is the major index to watch. (see below)

Significant Indexes

• McClellan Oscillator fell slightly to -4.55 yesterday. [+60 or above = Overbought = sell. -60 or below = oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. -Same pattern continues - We right in the middle so NO clear signal. However we are still in bearish pattern of lower highs and lower lows.
• US Dollar -started back up +0.21% yesterday.

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 US/China stocks, what you pay, and an economic recovery.

This is why the sovereign debt crisis in Europe [PIIGS & former Russian satellite countries] has the potential to plunge us into round two of the recession. The dollar is rising because of the problems in Europe.

Positions

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

DWA (Dreamworks) Ended up selling all of DWA for 4% loss. Was stopped out of 1/2 and sold the rest. Selling the last 1/2 was probably a short term mistake because after three days of big volume selling it should bounce higher this AM. Loss -4% on 2% of portfolio

RGC & CNK – Opened a 1% of portfolio position (hopefully long term position) in each stock. RGC price = 17.68 & CNK = 17.98. Will add to these on dips. Caution if Easter weekend movies bomb, these two stocks will get hit. A safer entry point may  be Monday or Tuesday.

Waited for even a 2 to 3% dip in IMAX to buy a bit more, but it just not happening. IMAX is NOT having a climax buying spree (going elliptical) yet, because there is NO big volume behind the rally. IMAX now up 30 to 40%

Will try to add a 2% position in TEVA today. Hopefully at a slightly lower price.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Senator Ted Kaufman (D DE)

Financial Reform

Sadly, financial reform of greed based capitalism, shadow banks, and greater market transparency continues to deteriorate. At times it seems  as if  the 2008 meltdown never happened

Steve Forbes, this AM on CNBC proudly announced the list of the world’s richest billionaires has significantly grown in size and money, as real unemployment is the USA has fallen to near 20% (The billionaire, obviously, did not offer the last 1/2 of this comparison) Forbes, of course, does not want “big” government to regulate greed based capitalism. Outside of a few voices within the Obama administration (Paul Volker, Elizabeth Warren etc.) both the administration and the lobbyist that dominate congress seem to agree – Let business take all the risks it wants and us taxpayers plus our kids will pay trillions to fix all their mistakes

Senator Ted Kaufman (D-DE) is one of the people who is not afraid to stand up for rules based capitalism. On his website is the speech he plans to deliver today.

One legacy of the Great Depression was we built a rules based capitalist system that endured and dominated the world until a few decade ago. Here’s a summary of his ideas from The Baseline Senerio

• Excessive deregulation allowed big finance to get out of control from the 1980s – but particularly during and after the 1990s.  This led directly to the economic catastrophe in 2007-08.

• We need to modernize and apply the same general principles that were behind the Glass-Steagall, i.e., separating “boring” but essential commercial banking (running payments, offering deposits-with-insurance, etc) from “risky” other forms of financial activity

• We need size caps on the biggest banks in our financial system, preferably as a percent of GDP.

• We should tighten capital requirements substantially.

• And we must regulate derivatives more tightly – on this issue, he likes at least some of the steps being pushed by Gary Gensler at the CFTC.

The stock market will rise because Senator Kaufman’s speech is NOT impending legislation. But unless we do something we will continue to repeat the mistakes of the past and every taxpayer and their child will continue to pay an enormous price - “socializing the risk and privatizing the gain”

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. (No changes this weekend)

Another melt up day in decreased volume. Right now it seems, even though US markets are overbought, they are poised to move higher on any piece of good news.

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

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.

Significant Indexes

• McClellan Oscillator rose a bit to +64.63 yesterday. We are still well above +60 or Overbought territory. StockCharts has a better version of the McClellan chart ($NYMO) LINK.
• 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 = Bulls rule BDI has flattened out in the last tree days

Positions

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

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.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING