Killing Ants With

Republican Leadership

Popeye in Comments section of blog states – John Boehner Republican and next [possible] speaker of the house called the pitifully weak shadow bank fat cat financial reform bill “KILLING AN ANT WITH A NUCLEAR WEAPON.” What plant is he on?

If the Tea Party Patriots and Republicans win the next election John Boehner will be Speaker of the House – This guy thinks, that financial crisis/reform is just an “ant” John McCain made light of the financial crisis before the election and it handed Obama the election. Boehner had the benefit of hindsight.

There is still at least one Republican who has not drunk the Tea Party Kool Aid – Senator Lindsey Grahram -To Tea Partiers in a meeting: “‘What do you want to do? You take back your country — and do what with it?’…Everybody went from being kind of hostile to just dead silent.”…you [TPP's] have no vision…you will die out.”

Bottom Line – As much as you and I disagree with what Obama is doing, the Republican alternative is far worse

Cheney/Bush Won

For years Investors411 has demonstrated US media bias. Latest proof of how Cheney/Bush fear mongering patriotism to a gullible supposedly liberal media (New Your Times & LA Times)working . This Harvard study on terminology proves it – Is water boarding torture?

• NYT -If other countries waterboarded it was called torture 85.5% of the time.
• NYT – If US waterboarded after 2004 it was called torture 1.6% of the time
• NYT – Before 2004 water boarding was called torture 81.5% of the time.

YOU are manipulated daily not only by content, but choice of words and stories the media uses. Even in the NYT

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

Mantra for week - “ 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 make up 80% of trading and right now the huge currency markets are dictating their moves.”

Clash of the Titans

Gravity/Fundamentals.

The Black Boxes got overwhelmed by gravity or market fundamentals. So has the month long inverse relationship between the dollar and US stocks. We’ve seen a lot of non black box investors panic and take their $ out of stocks this week. Bad fundamental economic news finally is trumping everything else (see yesterday’s Investors 411 for reasons)

The BDI going over a cliff (-44% see below) is further indications of economic meltdown.

Technicals – Two times in the last two days the Dow has dipped 100+ points (-152 yesterday) only to recover most of those losses. S&P down 8 of last 9 days is certainly another indication that stocks are oversold. Another is obviously the MO. It went below -60 interday (oversold territory) in the 100+ point declines – then recovered.

This is the kind of day investors hate, but short term traders love = VOLATILITY

The bulls titan has a meltdown in the dollar, an oversold market, and knowledge that large dips are getting bought.

The bears titan has a week of horrible fundamentals worldwide & the BDI. Also, Bond traders are running wild. (sorry for lack of explanation here – takes too long – but its bad for stocks)

Icing on the Cake – The Monthly Jobs Report.

The jobs report comes out this AM and anything unexpected could create wild fluctuations. Remember the jobs report is very significant to the long term economic well being of the USA, but it matters far less to the US stock market.

The JUNE Jobs Report Headlines - -9.5% Unemployed vs -9.7 in May = +0.2%, Private sector jobs up +83,000 vs +33,000 in May.

Basicaly in line or a slight positive surprise. This data does not say armegeddon, but you need +200,000 a month to ofset population growth and lower unemployment long term. Stock futures initially moved higher, but are now flat.

Significant Indexes

• McClellan Oscillator (MO) fell a we bit to -52.19 [+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. In May the MO reached two lows – one at -120 and the other close to -130. Therefore, potential for more downside risk. = Still NEUTRAL, but almost oversold
• US Dollar –  The dollar fell an unheard of -1.75% yesterday [Anything over +/- @0.50 is significant.] This is the single largest move in the dollar in the last 6 months probably a lot longer. The support level was more than broken it was devastated Mantra - right now is very important Dollar up = stocks down and visa versa. Yesterday stocks and dollar going down together. – A Total Disconnect - Stocks indexes should have soared – up 2 to 4% on this news.  = Bullish
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also good proxy of China) BDI is in free fall from a high of @4200 to  2351 yesterday.( This is a huge -44% drop in 6 weeks.  Often a leading indicator for stocks. Here’s a week+ old chart of BDI showing broken support levels. The BDI fell -2.29% Rate of decline increasing as it nears support level =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 2 weekend but there are NO positions held at this time.

Short term Traders - Would buy into any big move to downside, especially if dollar is falling. Use ETF’s that go long 2 & 3 times indexes.

Investors willing to take big risks – Remember The long term outlook is still Cautiously BEARISH.

A significant fall near the end of the session could be a chance for a small nibble. Technically what’s setting up is probably a bear market rally. Realize this may only be a short term trade that you sell 1/2 on only a 5% gains and you should set a stop/loss on trade.

Long Term Outlook =CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Disaster Capitalism

The major news this AM is that the BP spill is twice as large as originally thought.

Giant financial/economic and in this case also environmental catastrophes are opportunities for great change. The bottom line in the BP disaster is just like the bottom line in the 2008 financial debacle. In great disaster comes great opportunity.

• For the 2008 over leveraged casino capitalism disaster – We can change to a system where taxpayers no longer subsidize the risk and the giant shadow banks no longer have privatized gains
• For the 2010 (another free market/casino capitalism) BP catastrophe we can make a significant change toward alternative fuels.

Disaster Capitalism is referenced in Naomi Klein’s The Shock Doctrine One example she uses is how Cheney/Bush used the 911 disaster to invade oil rich Iraq. This war had nothing to do with 911, but shows how far you can move American opinion when a disaster happens.

Quite simply Wall Street is taking over our democracy. We have members of congress who are willing to challenge this. (example the 3 Republicans & 30 Democrats who voted in Senate to break up the shadow banks), but we lack a Teddy Roosevelt in the White House who is willing to lead the charge.

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

Yesterday stocks stopped dancing on the edge of the cliff. We had one of those, now typical, decreased volume mega rallies. = Bullish

Volume has lost its significance, and The Dollar has taken over as the single most important factor moving stocks. (see below) The dollar moved significantly lower and crossed a major resistance level. The trend higher has not changed, but a technical analyst will tell you its 5 day breakout to a new high has failed. (see chart) and the dollar has moved back into its consolidation pattern.

Fundamentally – Some auctions of treasury bonds in the European (PIIGS) countries turned out OK. Translation, like the USA the interest rates were not too high = there were buyers. A couple reasonable  auctions in the PIIGS’s  bond market [bond market is bigger than stocks, but not as big as currency] does not end the crisis, but it is a positive sign. = Bullish

Yep, as a couple of you mentioned in comments section there was short covering and some other decent fundamentals, but none significant enough to cause a huge rally

BP did recover @ 2/3 of yesterday’s loss. This indicates that traders have changed their mind about the solvency of BP. The roller coaster here is still in play. Good news reported is that BP is considering not giving part of its $10 billion dollar dividend. = Bullish

Futures are Flat = Moderately Bullish

Holding stocks over weekend = Moderately Bearish

Significant Indexes

• McClellan Oscillator soared to +20.49 [+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 are a smidge oversold, but basically = NEUTRAL
• US Dollar –  The dollar fell a Significant -0.91% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Dollar falling significantly = Stocks rise significantly= Bullish

Reading the Tea Leaves -  The more time an Index, Sector, or Stock keeps testing a support/resistance level the stronger it gets.  Each test pulls back a slingshot. We had 4 tests of the 1040 level on the benchmark SPX , so we pulled back that slingshot 4 times. What happens to arm the slingshot is traders buy more puts and calls each time we test a support/resistance. This is why we saw such a HUGE gain aided by the afterburners of the dollar’s fall.

Obviously, if you’ve been reading Investors411, today is the confirmation day of yesterday’s rally - Therefore important.

Longer term – right now we have a short term counter rally in a bearish mid term trend. The dollar is key to market direction and those moderately successful treasury bond auctions in Europe have stopped panic (for now). There are other debt shoes to drop, but its impossible to call where and when.

The chart to follow is the UUP [ETF for the dollar]

Positions

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

Still holding very minor positions in VCI, ESRX & now UUP.  Was stopped out of SDS at 34.53 for 0% gain. 1/2 this position made +8% & 1/2 made +0%

Traders - High frequency traders and hedge funds dominate this market. Be careful.

China (its GDP, import, & export numbers) is the country to watch. BIDU is their AAPL [Both on YOUR Stock List] BIDU exploded +7.76% higher yesterday while AAPL was in line with major indexes – up +3.01%. BIDU, on a dip, seems like a decent but risky play.

The Beta play is back for now. If you do not understand “beta play” look it up in Investopedia & you should NOT be trading short term till you understand more. At the point you realize how much more everyone else knows than you/me, then think about short term trades.

Investors – We’ve had the first signs of the EURO stabilizing – Good treasury bond auctions abroad. The FXI EWZ(China & Brazil ETF’s) are still the best plays.  You could nibble a little on dip. However MO is +20 and it would be better to nibble at -20 and much better at -60 and best below -60.

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING