Our President…

… mindful of soaring deficits, was pushing bold action to shore up the nation’s balance sheet. Cloaking himself in the language of class warfare, he calls on a hostile Congress to end wasteful tax breaks for the rich.

“We’re going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share,“ he thunders to a crowd in Georgia.

Such tax loopholes, he adds, “sometimes made it possible for millionaires to pay nothing, while a bus driver was paying 10 percent of his salary – and that’s crazy.”

Preacherlike, the president draws the crowd into a call-and-response. “Do you think the millionaire ought to pay more in taxes than the bus driver,” he demands, “or less?”

The crowd, sounding every bit like the protesters from Occupy Wall Street, roars back: “MORE!”

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The President who spoke these words was not Barack Obama

The year the above speech occurred – 1985

The President was

Ronald Wilson Reagan

• When did today’s Republican Party abandon their hero Ronald Reagan who raised taxes 11 times when faced with a deficit?

• When did the Republicans abandon Reagan’s “bus drivers” and the middle class?

• When did Republicans become the party of the richest 1% of Americans?

“The GOP has undergone a radical transformation, reorganizing itself around a grotesque proposition: that the wealthy should grow wealthier still, whatever the consequences for the rest of us.”

How, Why When?

The LINK

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Ohio and Debates

Republicans debated last night, but on Tuesday Ohio voters went to the polls.

They defended the freedom of working Americans to collectively bargain.  By a 61% to 39% vote they granted middle class working Americans the freedom to fight collectively for their rights

All Republican Presidential candidates were against this and latest poll show Obama’s popularity (a supporter of collective bargaining) at least 9% above Republican candidates in Ohio.

Its just one vote/poll/major issue, but when you compare it to the rights we give the elite oligarchy in America its very significant.

Thanks to Jim and Popeye for a heads up on this.

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STOCKS

That cut Bear Cub didn’t hang on but his mother is back and she’s angry.

The tipping point was when the Italian 10 year bond rate hit 7.00%.  The rate that others (Ireland, Portugal, and Greece) began their meltdowns. = Meltdown in US Equities.

WSJ on Euro Crisis. -

“the risks to the global economy are broad. The European and U.S. financial systems are deeply intertwined”

Every investors411 reader should realize by now the major link between European Bank debt, European Banks, and American Banks is the opaque Derivatives Market (CDS’a) that exchanges trillions of dollars of privatized over leveraged risk on European Debt.

Media virtually ignores the same derivatives that multiplied the over leveraging in the 2008 financial meltdown, because to many too big to fail shadow banks profit from it.

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Our #1 technical forecasting tool, the McCellan Oscillator fell to -10.66. 50DMA at +22.80. = NEUTRAL

Since derivative markets hides whose on the other side of a transaction, and too big to fail shadow banks and central banks have hidden or irregular accounting, its impossible to accurately predict stock trends.

Therefore Hedge plays like the GMCR listed below is far less risky than picking a market direction.

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Paul’s Corner

The Big Blue Line

Dave Landry is one of the many excellent market technicians kicking around Wall Street and is known for his Big Blue Line approach to the market and stock selection. It’s a very simple method; take a look at Dave’s excellent Big Blue Line YouTube video:

LINK

Pay attention to the three ways the Big Blue Line points and his discussion about buying in very oversold markets. Which way is the line pointing with respect to our current market?

Kindly post your thoughts about The Big Blue Line.

A short Paul’s Corner today,  that’s all folks!

[Editor's Note - Landry  presentation is enlightening]

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A Tide Turns

Last night as the crowd chanted MEDICARE,MEDICARE, MEDICARE Democrat Kathy Hochul proclaimed victory in a heavily Republican district in her race for congress. THE issue was Republican Paul Ryan’s plan on Medicare. Investors411 has already reviewed Ryan’s unpopular voucher plan that the non partisan CBO says will cost you more and cover less.

Her 5+% decisive win in a district that has a 6+% majority of Republicans is covered by Politico and Huffington Post There was a third Tea Party (former Democrat) candidate in the race who got 9% of the vote, but polls showed as his support tumbled Hochul’s rose.

So Democrats have an issue for the 2012 election. Headline from NYT Democrat Wins G.O.P. Seat; Rebuke Seen to Medicare Plan

None of this is going to matter unless we first educate and find decent jobs for working Americans.

None of this will matter if politicians from both parties keep bowing before a corporate oligarchy that feeds off the public trough to the tune of trillions of dollars. Example – Fed has quietly purchased about $2.5 trillion in toxic assets using Maiden Lane program.

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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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Index	Percentage	Volume
Dow	-0.20%	Down
NASDQ	-0.46%	Up
S&P 500	-0.08%	Up
Russell 2000	-0.46%	-

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Technicals, Fundamentals & Analysis

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Shorter Term Forecasting Indexes

There are hundreds of forecasting tools, – These two tools have worked

When they stop working Investors411 will use other Indexes

• The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar fell yesterday -0.34% after two straight days of significant gains. The moderate loss doesn’t make up for the two significant rally days or the week+ long major rally before that.  The dollar is fundamentally moving higher  because the Euro is weakening. The Dollar bulls  are back, and momentum could carry the dollar higher and stocks lower = Bearish
• McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] MO was basically flat. Closing price  -48.57 This is almost exactly April’s low although March’s low reached -90 US stocks moderately oversold = Bullish/Neutral (trying to show a lot more bullish and just a tad neutral.

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Positions

The silver/gold trade is back – If you like high risk,  and can stand a quick 7 to 10% hit, this may be a good trade. Buy The Dip. The CME Group can kill any rally by raising margin rates, so there is added risk. Therefore short term trade.

• I bought SLV from yesterday as part of Investors411 at 35.09 hypothetical portfolio. REMX other holding in portfolio.
• Will start to consider ETF’s that short stocks, but waiting for rally/bounce off oversold (see MO) levels.
• Again a warning for holders of YSL #4. These stocks have a higher beta and tend to do better in bull, but worse in bear markets. Exit positions in any rally.

Disclosure - I have a long term position in GLD for a senior center and member of my family. I also own some SLV from a covered call position bought over two months ago.

Caution - AGQ (2X leveraged silver ETF) does not exactly tracks silver. There are opening and closing distortions. Contact me if you want to know more. Same for ZSL (double short silver) DGP is double long gold.

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Check out the advice, recommendations, analysis by bloggers on stocks,politics and trends in the comments section of the blog Many of the best concepts regarding YOUR Financial Future are discussed their. Watch for Paul’s Corner every Tuesday and Thursday

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Longer Term Outlook

NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Violence In America -Rape

Susan Brownmiller. Against Our Will is her 1975 groundbreaking book which states rape “is nothing more or less than a conscious process of intimidation by which all men keep all women in a state of fear.”

You may think that this statement goes too far, but it brought the crime of rape out of the closet. You can find out more about this late American hero and her fight for women and against rape at http://www.susanbrownmiller.com

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Some statistics from Ohio Univ.

• In the United States, 1.3 women are raped every minute. That results in 78 rapes each hour, 1872 rapes each day, 56160 rapes each month and 683,280 rapes each year.
• 1 out of every 3 American women will be sexually assaulted in her lifetime.
• The United States has the world’s highest rape rate of the countries that publish such statistics. It’s 4 times higher than Germany, 13 times higher than England, and 20 times higher than Japan.
• 1 in 7 women will be raped by her husband.
• 83% of rape cases are ages 24 or under.
• 1 in 4 college women have either been raped or suffered attempted rape.
• 1 in 12 males students surveyed had committed acts that met the legal definition of rape. Furthermore, 84% of the men who had committed such acts said what they had done was definitely not rape.
• 75% of male students and 55% of female students involved in acquaintance rape had been drinking or using drugs.

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Happy to see that those in the, always vibrant, comments section seemed to have come to the conclusions that there is a Violence Problem in America.

I have no idea what motivated the insanity behind the assassination attempt of the Democratic Arizona Congresswoman and resulting deaths, but its long past time we deal with the “conscious problem of intimidation” that keeps us all in fear and other aspects of American violence.

President Obama is asking for a moment of Silence at 11:00AM EST for victims in Arizona.

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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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Index	Percentage	Volume
Dow	-0.19%	up
NASDQ	-0.25%	down
S&P 500	-0.18%	up
Russell 2000	-0.45%	-

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Technicals, Fundamentals & Analysis

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

• Markets fell in the AM on a MA Supreme Court ruling preventing foreclosures – who the hell knows who owns the property –  derivatives on mortgages
• Employment report 9.4% headline was good, but the 103,000 jobs created was below expectations.
• So many analysts have said this for so long its got to happen sooner rather than later – markets overdue for correction
• I remain convinced that good economic news for the USA is OK for stocks, but bad news is better because it means more quantitative easing by the Fed.
• Here Comes Earnings Season by John Nayardi. – Flat to down week

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Reading The Tea Leaves

The ”schizophrenic.” pattern changed back to the bears Friday

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Markets that are erratic often indicate a change. After so many weeks of listening to analysts say we are too high, I’m finally starting to believe it.

Monday’s are usually very good, but think some investors are going to be worried about earnings season.

What to watch

AAPL – Broke out again, or rather inched out again+0.72% to a new high. This is your market leader if it breaks down so will stocks.

UUP – Tracking ETF for dollar. At 23.36 now and breakout level at just above 23.5.  Any significant move above this level is trouble for stocks.

Working on 2011 Investment guide - Short term more bearish, but bullish in long term for the year.

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Positions

• UWM
• REMX -(ETF for Rare Earth Metals) Wednesday – Sold 1/2 at 26.12 for +6% gain Got stopped out at 23.76 for a -4% loss. Total +1% gain

NB -

• No matter how much I like a stock I usually keep a 5 to 7% trailing stop on volatile ETF’s.
• Cut back to one position so obviously not very bullish in short term.
• Tightening trailing stop to 4% on 1/2 of UWM

Under consideration

UCO -(2x oil prices) Very erratic, waiting till correction settles.

REMX (Rare Earth ETF) -   Will buy back hopefully on slight dip. Only ETF under consideration at this time.

EWZ (Brazil) & LBJ ( 3x Latin America – majority Brazil) Obviously the later is more risky because its leveraged 3X. Waiting for larger pull back on both.

UYG (ETF that does 2x Dow financials) XLF is the financial ETF. -  Both overbought at this time

DGP – Will buy back into this 2x gold ETF on dip.

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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#3)

Bada Bing

YOUR New Stock list gains almost +3% on the first day vs. a -0.16% loss for the S&P 500

Sorry abbreviated Investors411 today

Investors411 is gong on a Turkey time break to visit grandchildren and should be back next Tuesday. Meanwhile check out the POSITIONS section of the blog (scroll down) that has 3 recommended portfolios.

The YOUR Stock List is the most aggressive portfolio in the POSITIONS section and today’s results are NOT typical.

However the results of the last two YOUR Stock Lists are somewhat more realistic. Remember we could end up loosing especially if the S&P 500 turns to toast.

• Our first stock list went up @ +24% from 2/11 to 4/20 vs @ 11% for the S&P.
• Below is our second list that has gone up @ +26% from 8/4 to 11/5  vs.  @9% for S&P

US Stocks/Positions

Sorry limited time this AM – There’s a lot of “Lions Tigers & Bears Oh MY” (Wizard of Oz) In this case its bad news and scandals. Shadow banks like BAC & GS lost 3+% yesterday. North & South Korea exchanged fire, Ireland who adopted US style casino or “free market” capitalism are all for sale & START treaty in trouble.

Tightening stops on ETF’s. - The same advise given over the last week still holds true for the rest of this week.

Look for Paul R’s always enlightening comments on the market in the comment section of the blog.

Barr

PS – Yes Popeye I chuckled – See comments section of blog

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Iran Day 11

Iranian protestors – Photo from Andrw Sullivan blog

Neda Agha-Soltan has become the hero of the Iranian revolution from American media (LA Times here ) to Arab media here In fact al Jazeera has a whole section devoted to "Iran in Crisis" here Al Jazeera is an outlet for mostly Arab Sunni’s and Iran is Persian Shia’s. No love lost between these two groups. You heard and saw Neda’s story at Investors 411 3 days ago.

More of the same in Iran. Less on street demonstrators and more violence. Previously listed best  sources are still telling the story to the world. Some predictions from BBC – What’s next for Iran here

One issue that many on the far left are not going to like to hear. Israe l has certainly made mistakes in its two recent wars with Iran and her proxies (Hamas & Hezbollah). But seeing how the Iran’s "Supreme Leader" treats his own people you can see how hard it is to make some peace with him or his clients. Of course, the first the recognize and lavishly praise Ahmadinejad’s & "Supreme Leader’s" victory was Hamas (here) and Hezbollah (here )

Barack "Hoover" Obama?

Yesterday Abby posted an article by Kevin Baker on Obama from Harper’s magazine. Unfortunately you have to be a subscriber to reference the article. You can view some excerpts here The focus is that Obama has not and may not be able to change the strong intrenched interest that created the economic mess we are now in. President Hoover (his picture above) did nothing and the Great Depression grew.

Context We tore down the regulations on "free" markets and developed a massive credit debt over the last decade that has exploded. Yes, Paulson, Bernanke (more the previous Fed chair Greenspan) and Bush were leaders in creating this mess, but late last year when we stood on the edge of economic catastrophe they (PB & B) instituted a plan and prevented world economies from falling off a cliff. Bernanke, Geithner & Obama have followed through and added to that plan

Remember Lehman Brothers cause over $400+ billion dollars of debt to spread throughout the world when it went bankrupt. People were lined up in panic at insurance companies and banks. What if AIG, CitiBank, Merrill Lynch Fannie, Freddie. AIG and so many others had followed Lehman. The end result would have rippled through out the system and economic catastrophe would have been the result.

How Obama handles the economy is priority #1. Because it is the world’s economy and he is easily the most important/influencial figure. Unlike Hoover whose inaction significantly added to the Great Depression Obama has acted. But its those entrench interests that have dug in. Time will tell.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index	Percentage %	Volume
Dow	-2.35%	down
NASDQ	-3.35 %	down
S&P500	-3.06%	down
Russell2000	-3.88 %	-

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Technicals & Fundamentals

US markets took a major hit on a bad economic forecast from the World Bank.

The volume was again below average. It hard to be sure about making a forecast when our #1 forecasting tool – volume – gives no indication of which way prices will flow.

Major event – Fed Meets today and issues statement on Wednesday

Yesterday’s major event was The World’s Bank lowered its outlook for the world’s economy this year from -1.7% to -2.9% .  This is some truly bad new s for long term investors.

Since volume is out as a forecasting tool right now, today’s price move will act as a confirmation of yesterday’s move. Do we fall further (bearish) or rebound (bullish)?

Significant forecasting tools/Indexes for stock markets

Note - Repeated statements in brown

Right now, there are two indexes that are significantly influencing stocks in the USA & world. The US dollar in the short term and the BDI in the longer term

$USD -  The dollar is the index to watch. Dollar went up +0.57% yesterday. Any move over 0.50 is significant.  It looks like the dollar may be establishing a short term bullish pattern (see chart)  of higher highs and higher lows. Still to early to tell.

All together now -  our mantra – when the dollar goes up stocks go down . This strong inverse correlation has existed for many moons.

BDI - The Baltic Dry Index measures the flow of goods (world trade). 24 up days in a row, 6 down day in a row,  a 6 day rally and the BDI fell minimally on Friday and significantly yesterday. This is a very important chart that has just rolled over. It usually moves in one direction for an extended period of time.  If it moves past and creates a lower low than it had eight days ago it would be a serious sign of trouble Right now, the momentum is with the bears.

If trade is diminishing through out the world then a worldwide recovery is in big trouble.

You can play with the chart and create different settings to get a better idea of what’s happening, (the same with all other links to different charts)

Reading the Tea Leaves

Still think this market has moved too high to fast and is a technical rebound. As stated two weeks ago we may see a 5 to 10% technical fall or consolidation. This week fearless forecast – Another down to flat week. The benchmark S%P 500 has already broken through support and fallen 6 to 7% from its high to  893. Next significant support level is 875 to 880. As stated above volume is NOT confirming (or has yet to confirm) the downside move. So far this still is a technical correction of a market that went too high too fast.

Both the dollar and the BDI have started to trend in the wrong direction (If you’re a bull on stocks) Add the World’s Bank prediction and you have lots of reason to hear the bear’s growl.

Got burned with this the last time I did this, but buying a little protection on any minor rally. Adding small position in SDS (ETF that does 2X the opposite of the S&P 500)

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING