Investors 411 Blog

Class Warfare – Editorial

The most important stat this week (see yesterday) was from Bill Mahr reminding us 1% of the USA had 8% of the wealth in 1980 when Reagan took office. Now that 1% has 23% of the wealth

There is class war fare raging out there as the rich and the uber rich have through excess GREED dramatically altered America’s financial & economic structure. They are toasting the middle and lower classes.  In other countries like China and Brazil wealth is growing among the middle and lower classes. Unless we can fight back and change this dynamic America will continue to fall.

One of the major trends in history is when the majority realize just how badly they’re getting screwed by an oligarchy and they fight back. Sometimes like in the heath care debate after all the shouting tea baggers people start to realize just how expensive health care has become and the wonder why other people abroad are living longer from infants to seniors. Why does  it cost so much less for a better quality of life/health in similar countries abroad?

Bottom Line – Capitalism is the best economic system we have on the planet right now, but it need regulation and if left to itself = people are people and GREED runs wild if we don’t enforce regulations.

Your Comments

Popeye joined D .& Sherwehe on trillions going to fight wars instead to other causes? Check out the comments and join the debate.

Several of you have privately mentioned that I’m too tough on Obama. Sorry I think he deserves it. Others want me to focus more on health care – will do.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0.15%	up
NASDQ	+0.04%	up
S&P500	-0.28%	up
Russell2000	-0.34%	-

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

Fearless forecast on earning season  from yesterday -“Expect other indexes to follow gold & Brazil. ” (Both gold and Brazil have broken out to new highs.)

Intel again hit a top and bottom line home run in their earnings report and forecast. Shadow financial - JP Morgan this AM seems to have also done better than expected. INTC up 5%+ in post market trading and JPM up 3%+ in pre market trading. Revenue for these companies is coming in better than expected. Its a regulatory and interest rate utopia for shadow banks/financials right now.

Perhaps even a bigger positive was the fact that tech giant Cisco bought a major telecom nuts and bolt company and actually went up. Almost always companies go down when they make multi billion dollar purchases. See Cisco buys Starent LINK A huge chunk of what happening is all those phones being sold in growing China market (and elsewhere) that seem to do everything including cleaning the kitchen sink.

CSCO fundamentally seems like a decent buy for those interested in stocks

Sure looks like he rally will get extended. Watch volume. Resistance levels Dow 10,000 could fall today and other major will probably see new yearly highs.

Put on your Rally caps and watch volume – Today should be the day that we know if the money on the sidelines is willing to start to get back into stocks.

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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) .

The BDI is @ 40% (I haven’t done the math) 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 )

The BDI nine day rally flattened out yesterday. It fell a -50 points yesterday and closed at 2646 . Even though a reversal seems eminent, we have technically achieved a higher high =  Bullish for stocks & world trade

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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.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

The dollar reached a new yearly low (barely) last week and fell -0.45 % The dollar closed at 75.82. We have developed a support level just below $76 . The dollar closed below its support level. = Bullish for stocks

NB – Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.

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

Our positions in gold GLD and Brazil EWZ are clearly out preforming US markets and our China/smaller S. Korea position. The later two are approaching new highs. Would buy more of GLD & EWZ on dips. On a purely fundamental basis financials should lead any rally and are therefore a decent short term trade

Added XLF (financials) yesterday (10%) of portfolio at 15.15. For traders I’ve also been playing FAS (3x financials) Bought the dip yesterday at 84.00 with a tight stop. Bought small position in MVIS (mentioned many times over last few weeks – recommendation sent in by one of you) – I missed the dip when away, so bought in advance of expected good earning reports.

Big banks and techs continue to be recommended areas. QID is an interesting play (2X NASDQ 100)

When/if the SPX or S&P 500 hits/gets close to resistance area of  1200 – would take some off the table. Long term ETF’s for China, Gold, & Brazil continue to be the best bet to buy on dips.

Right now GLD is the best position to buy on slight dips. – The G7 nations bill themselves as the world’s most powerful economies, but in the end the vast majority are turning out to be the biggest debtor nations – especially the USA. This growing debt is driving Gold fundamentally and technically it has broken out from a two year long resistance level.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Bill Mahr

Last week he had Tom Friedman and this week he had Lincoln Chafee (former moderate Republican Senator) on his HBO show real time with Bill Mahr.  He’s sometimes over the top, always funny, and gives a non regurgitated version of current events.

His most important stat this week was 1% of the USA had 8% of the wealth in 1980 when Reagan took office. Now that 1% has 23% of the wealth .

Right now up on his web site is “How Sarah (Silverman) saves the world – Provocative and funny LINK

Obama’s Closet

Sitting on the desk in the Main Room is going to be that big shiny Nobel Peace Prize, but what happens when we open the closet door.

• 13,000 more troops for Afghanistan (Obama’s “Necessary” war) LINK to WaPo story.  Obama’s words are sweet 7 he will have his Peace Prize.. But his action are totally different – now the USA has in Afghanistan and Iran “more troops than the peak during the Iraq “surge” that President George W. Bush ordered.”
• Paulson (Bush’s Sec. of Treas.) instead of using TARP funds to absorb bad debt (CDS’s) gave the money to shadow institutions. Obama continued the practice and even allowed them to change their accounting practices so that they would not have to show bad debt. (eliminated mark to market accounting) You can call this good, bad or ugly. But the reality is, just like Bush he is privatizing profits and socializing risk.
• How the hell are you going to reform anything (health care, medicare etc.) when all the money continues to go to shadow institutions and war.

Your Comments

Both D .& Sherwehe have opened a debate that enlightened anyone who has not fallen hook line and sinker for the fear mongering militarists who run the USA. What if the “$3 trillion ” going to fight wars went instead to other causes? Check out the comments and join the debate.

4 Factors Moving Stocks/Wall Street

Editorial below under Technical and Fundamentals. Unfortunately, these factors may move socks higher, but what’s good for Wall Street will not always help Main Street USA.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	+0.21%	flat
NASDQ	-0.01%	down
S&P500	+0.44%	flat
Russell2000	-0.18%	-

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

Basically the US markets have been up 5 days in and overbought markets hesitated yesterday.  The Dow has eked out a new yearly high, but the other major indexes still have a point or two to break out to new highs. Four major factors stand in the way of a breakout (Actually there are lots of factors or potential factors, but three keys.)

1. The Dollar – Discussed below
2. The BDI – Again below
3. Technicals – You have an overbought market that has risen in decreasing volume in front of major resistance level. = Bearish . However you do have one major US stock index and several foreign stock indexes (Brazil, Australia & some others) that have broken out to new highs. Also commodities like gold have had solid breakouts. = Bullish
4. Earnings Season – Three major tech companies report this week – INTC, GOOG, & IBM . Everyone is looking for top line growth -sales. Last earnings season it was Intel’s  (reports tonight) expectations of a bit better top line that juiced markets. Three major shadow banks JPM (today),GS (tomorrow) report & BAC (Friday) .

Bottom Line – The shadow banks will continue to do well. Bush, Obama, and Bernanke (The Fed & our government) have privatized the profits and socialized the risk. The oligarchy, just like in a communist country soaks up the wealth. As long as they are NOT forced to use mark to market accounting and have the

The big tech companies should benefit from the falling dollar. They have cut jobs in the USA and will first hire people where labor is cheapest and closest to growing markets that do not have huge debt – China & other emerging markets. The question is has top line growth abroad (China’s stimulus package & other emerging markets) been strong enough. China, Brazil, India S, Korea (the 4 majors) combined are growing but their combined GDP’s are total 1/2 of the USA’s.

This will radically change in the next decade as they continue to out preform the USA. The US is burdened with massive debt, phony wealth created by shadow banks and huge war costs.

Best read of tea leaves – Shadow banks will do well. Less sure about Big tech, but there will be no huge earnings miss. Therefore, expect other indexes to follow gold & Brazil.

——–

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) .

The BDI is @ 40% (I haven’t done the math) 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 )

The BDI nine day rally flattened out yesterday. It rose a +1 points yesterday and closed at 2696 . Even thougha reversal seems eminent, we have technically achieved a higher high =  Bullish for stocks & world trade

——-

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

The dollar reached a new yearly low (barely) last week and fell -0.35 % The dollar closed at 76.16. We have developed a support level just below $76.

NB – Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.

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

Our positions in gold GLD and Brazil EWZ are clearly out preforming US markets and our China/smaller S. Korea position. The later two are approaching new highs. Would buy more of GLD & EWZ on dips. On a purely funadamental basis financials should lead any rally and are therefore a decent short term trade

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!