From Investors411

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Michael Moore is A Whimp

So is the Left in the USA

Why? They didn’t produce

This Video Ron Paul did.

Ron Paul also recognizes its the shadow financials that are crushing the USA. His solution – return to a gold standard and eliminate the Fed would solve the problem, but create a world wide depression.

Instead we need a Teddy Roosevelt to reestablish our rules, regulators, break up too big to fail banks & a government that does not go to war and cut taxes.

Right now we are playing financial football without most of the rules and far less referees. Pure Free Market Capitalism is playing the same financial  football game without any rules or referees.

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STOCKS

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Heroes

Part 2

Obama’s new CIA Director General

David Petraeus

Petraeus when asked – Who would be your person of the year? – answered Mohammed Brouazizi The Tunisian street vendor whose immolation sparked the Arab Spring. He also gave a nod to Steve Jobs.

What Petraeus has taught is the brute force, so beloved by the right wing and military industrial complex, doesn’t work. In Iraq progress was made when Petraeus endorsed sitting down and talking with former enemies and turning them against those who opposed US forces.

Winning the hearts and minds of an opposing side works far better than  brute force which created more terrorists.

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Jon HuntsmanJo

Jon Huntsman

John Huntsman, a true conservative, has taken some outstanding positions is his fight for the Republican nomination for President.

He believes in science – global warming (see below).

As former ambassador to China he understands foreign policy. Huntsman opposes Mitt Romney’s use of brute force and taking China in front of the world court on day 1 of your presidency. It’s  a horrible idea.  It would create a trade war that would lead to a massive recession or world wide depression.

But, by far his most outstanding attribute is Huntsman is the only candidate, including Obama, that has a clear and workable

plan to break up the too big to fail banks.

LINK to his plan

Obama’s plan leaves big shadow banks up to regulators under the weak Dodd/Frank legislation. Matt Taibbi and others have often pointed out regulators are corrupted by those they regulate as easily as congress is by lobbyist.

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Systemic Disaster

If a systemic plant wide catastrophe worries you in the slightest

DO NOT

Read this article

Continue to ignore the continuous stream of giant bursting bubbles of methane gas as they erupt into our atmosphere all across vast sections of the globe.

You can see them, smell them, die from inhaling methane gas

But do they really don’t exist?

Ignore  the science and reality that your children will have to face or read the article.

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STOCKS

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Popping Bubbles

Bubble Myths – Economics

Nations with More Deregulation Grow Faster

FALSE

The rhetoric – Campaign mantra of the right wing  is to cut regulations and the economy will grow and jobs will be created.

Let’s Pop This Bubble

Stephen Gandel from this week‘s Time magazine (sorry no link to the charts in Time) has an excellent short editorial on this. Using IMF & OEDC data he shows.

• The USA is one of the most business friendly countries (lack of regulations, taxes, time to start a business…) In fact we are rated #4 of 183 countries.

• USA GDP has grown +15% over the last 5 years (ending in 2010 & compounded)

• China is one of the least business friendly countries  - biggest bureaucracy in the world – it takes 311 days longer to build a warehouse there than the rest of the world and the communist party has its hand in every transaction.

• Companies spend 2600 hours a year complying with Brazil’s tax code. Another least friendly business country.

• China’s compounded growth rate for the last 5 years is 160%, Brazil’s 135%

• The list goes on and on -Least business friendly countries – Russia,Indonesia, India, Brazil, Argentina etc all have significantly higher growth rates than business friendly countries like the – USA, UK, South Korea, Canada, Germany.

Deregulation has, at best, a miniscule positive impact on Jobs and Economic growth. Just compare China and Brazil to the USA.

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PhotoEssay from We are the 99%

LINK

He’s not Alone – From CNBC

50% of all US Mortgages Effectively Underwater.

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STOCKS

The Super Computer from Space Odyssey

or

An HFT Super Computer

“What’s behind That Wild Final Hour of Trading” The answer from CNNMoney’s Maureen Farrell is “rebalancing of leveraged ETF’s” Something Paul has warned us about. Let’s expand on this to understand the full dynamics of what’s happening.

• US markets open in big volume, (first 1/2 hr.) focused on events that happened since the close. Currently the Euro Zone is creating the most significant events.

• Trading, volume, in general, dries up during the day

• A little after 1:00PM EST many stock traders (based in NYC) come back from lunch and an afternoon trend starts to establish itself.

• This is when the algorithms of the High Frequency Traders Stars to kick in.

• All the managers of the leveraged ETF’s see they are out of balance.  So do the super computers of the HFT’s. The race is on and the volume explodes sending stocks on meltups or meltdowns.

The Below chart is from Dave Fry’s ETF’s Digest

Yesterday’s Market

He gives more credit to HFT’s reacting to news (Italy) and I give more credit to imbalances. Whose right? You’d have to know all the different algo’s HFT’s use.  Fry also has an HFT Alert

Our #1 technical forecasting tool, the McCellan Oscillator fell to +38.61. 50DMA at +24.61. = NEUTRAL

Some sort of bad news from Europe this AM.

• Expiration – end of 11/11 or 11/19

• This is an event driven trade based on GMCR’s earnings report today.

• If GMCR moves big time in one direction we (I’m in on this trade too) win. Example PCLN close +8.61% higher after its report yesterday.

• Reasoning – There a huge battle between investors on the direction this stock will take. The earnings report (this evening) will give an indication what will happen. The wrong side will be forced to sell or buy to cover potential losses. So it should have a big move. If not we lose.

“Applauding Death”

The Onion

A quote from The Onion has created a massive controversy.

The words “Jon Huntsman Onion” have 453 references asking about the validity of the quote and article, including the first one from ABC news.

Many thanks to RF who often updates us with the Borowitz Report. The “Huntsman quote” below -

“When I saw the numbers and realized Republicans weren’t embracing my message, I breathed easily for the first time in months…They’re terrifying. We’re talking about people who blame the unemployed for their own predicament and literally applaud the idea of letting those who don’t have health insurance die. What would it say about me if they gravitated toward me personally or approved of my political principles?“

The Reality

In the  America I grew up in you cared about your neighbor, community and country.

Today we sanctify greed.

Instead of shared self sacrifice, that person in the voting both could really “blame the unemployed for their own predicament and literally applaud the idea of letting those who don’t have health insurance die.”

The facts on health care aren’t a parody.

We live in the richest country in the world. A country where the 400 wealthiest people have as much wealth as the poorest 150,000,000 Americans or 80% of households.

The Organization for Co-Operation and Development OEDC is 34 nations banded together to promote just what their title says.

Their 2011 Report based on 2005 data show the USA with  far more expensive health care system and we narrowly edge out one other country for dead last in life expectancy. Just like the previous UN study.

LINK To Charts and editorial

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STOCKS

The Bulls are Back

The Cute white bear cub no longer leads the Stock Section of Investors411.

The short term bearish trend could not hold on

China leads and they are going to be around for a while. While US markets have moved @ +20% off their early Oct. lows China has moved @ +40% [FXI] FXI -ETF for 25 Chinese stocks – is on the verge of a breakout.

Yeah, Europe still matters, but China alone counts for 25% of worldwide growth.

“Wall Street Profits at Record Levels So Why Aren’t Stocks?” CNBC - CNBC sanctifies greed, so another headline might read “Wall Street Profits are Back So Why Isn’t Employment?”

Stocks rallied into the close on some pretty bad Euro/Italy bond data. Rallies in good news put the bulls back in charge – at least for the short term.

Our two forecasting tools remain in NEUTRAL – So there is plenty o room for a move either way.

Springtime For Europe Then Reality?

We have another major solution to the Eurozone Crisis. German stock market up 4.84% at 8:20 EST and climbing.  So favorable reviews from Germany should transfer across other stock markets . Globalization at work. NYT’s #1 story today. Two biggest points.

• Greek’s default grows from 21% to 50% on bonds
• A $1.4 trillion bailout package to protect banks from  bad debt of all the debtor countries in Europe.

Zero Hedge (libertarian view) negatively dissects some of the details. - A Farce, & Springtime For Europe then Reality - Citigroup’s conclusion, does a good job at outlining what happened and next steps.

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The Lobbyists Dream Candidate

The lobbyists in Washington have chosen their Dream candidate - Mitt Romney

• He’s raised more lobbyist money than all the other Republican candidates put together
• 6 times the amount Obama raised from Wall Street

Mitt just had another Washington lobbyist fund raiser in DC and the invite list included the “Dozen” Biggest of K Street  lobbyists who run our government. Link and Link and LINK

Obama was the last presidential candidate that K Street showered  a just bit more $ on than the challenger  and the negative results are evident. This time around its not even close.

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STOCKS

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Reading Tea Leaves

• Our #1 technical forecasting tool, the McCellan Oscillator, is at +67.29 - overbought = Bearish.

• Our secondary indicator, the Put Call Ratio is at 1.01 = Neutral.

• The PCR is telling us that the professionals who use the Puts and Calls are Neutral. However, since the 50DMA of the PCP is not at 1.00, but much higher at 1.17 Sentiment = Moderately Bullish

As stated before the events in Europe trump this like they did after the 2008 meltdown.

Then, the MO fluctuated between +110 to +20 for two months. At that time there was the start of a set of solutions led by our Fed and Treasury that lite a fire under stocks for two years.

The MO should reach OMG overbought levels today (over +80). This may slow down the stampede and create some dips to buy.

• Now, it seems like the perception of investors is that  the proposed solution in Europe will do something similar tot he stimulus of 2009

• Stocks, especially financials should do better, but just like 2008 people/taxpayers will suffer in Western Democracies.

• The 25% of global growth this year that comes from China(Time magazine) is critical to bullish trend developing.

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Paul’s Corner

3 Days of Ian Woodward

This past weekend I had the great pleasure of attending the fall HGSI Workshop in Palos Verdes Ca. The workshop featured lecture by Ian Woodward and Ron Brown from HGSI. Let me give you a few of the details.

Ok ok, I can hear the moaning, “Oh no here comes more Ian Woodward and HGSI talk”. Please folks humor me, read on!

Ian and Ron’s discussion lasted for three days. Interspersed throughout the weekend there were several guest speakers who added to the value of the workshop.

Ian showed us his research behind HGSI investing and Ron gave live market demonstrations how to maximize using HGSI.  This meeting really helped us understand the undercurrent of the market. Ron and Ian showed us how to get insight using HGSI and related tools in a predictive manner.

Fred Richards – an HGSI contributor, Harvard Economics Professor and longtime expert investor gave us a great overview of the world economic stage and what to expect going forward.  Fred is a great CANSLIM type investor with decades of experience and great stories. A friend of his when growing up was William O’Neil of Investor’s Business Daily.   It was wonderful hearing Fred and by good fortune I sat next to Fred at dinner Saturday evening. Ian bought dinner for all at a wonderful Mexican restaurant

LINK

Chris White demonstrated his new software EdgeRater 5.0.   Chris demonstrated how using HGSI, one can do an end of day update across the market of index, ETFs and Stocks in just a few key strokes.  Perhaps the greatest benefit of using EdgeRater with HGSI is EdgeRater takes many of the tools developed by Ian and Ron and automates them in EdgeRater giving us a predictive look into the markets.

LINK

Chris Wilson an HGSI user demonstrated his techniques for Pairs trading.  Using HGSI and a non-proprietary set of tools using HGSI, Chris broke new ground with a technique based upon the changes in RS over time between an equity and a comparative index or ETF.

Dr. Jeffrey Scott, an HGSI user, presented stocks for consideration of our next JIRM index, our early warning indicator of a failing market.  For background, check out Ian’s blog, posted on the HGSI website: Stock Market: Doom and Gloom or Plain Sailing? September 25th, 2011.This exercise gave us early insight we are clearly seeing rotation into unusual leaders such as SBUX, KMB and MCD. This rotation reflects the current fear in the marketplace.  This was an excellent lesson in chart reading and fundamental analysis. We ended up selecting 19 high quality leaders in this exercise. Only attendees have this list and if you wish to see it you have to attend a work shop.

LINK

For me the highlight of the workshop was a brief lecture by Gil Morales (author of Trade Like an O’Neill Disciple) to review his tidea on current market conditions and update us on pocket pivots.  Gil was supposed to give an hour discussion but it soon turned into 2 ½ hour lesson of correctly shorting a stock. Gil also painted a concerned picture on the market and gave us some names to consider shorting.  Gil was an analyst for Investors Business Daily. He uses HGSI to scan for pocket pivots. A pocket pivot signal gives a very early signal that a stock is getting ready to break out. I have studied the signals for months now and they do appear to be a very good early indicator.

LINK

My wife joined me on this trip and we took some time touring Pasadena, Hollywood, Beverly Hills and Bellaire. She really enjoyed buying clothes! I was a great weekend.

We all like to talk about our best stock trade. The investment I made this past weekend with respect to time, air fare, hotel, Seminar cost has to be the best stock investment I have ever made. It was an outstanding weekend.

If any of you are serious about developing your trading skills, Ian’s next workshop is scheduled for March 24-26. I encourage you to join us.

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Positions

SPY – (ETF tracks S&P 500 or SPX) bought at 122.5 (See Monday’s blog for details)

Your Stock List#5 - Mea Culpa – Holding stocks through earnings season is always dangerous. 5 of our 14 stocks took  some big earnings hits (one on an analysts downgrade) So Paul & I have decided to drop TSU, RES, CROX, GMCR, & CPHD. Their positions will be closed at end of day. LINK to entire list (scroll down)

Future considerations – SSO (ETF that is @2X SPX) Buy on dip. Investors411 uses a buy the dip strategy in markets that are trending higher.

Bottom Line - It looks like a trend is starting. This is a significant bailout in Europe. There will probably be more. Little discussed China is the key to global growth and this trend developing.  The greatest risk is at the start of a trend, but also the biggest reward. Obviously the trend is NOT solidly in place.

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Long Term Outlook

3 to 6+ months

CAUTIOUSLY BULLISH

Investors411 has 5 different valuations - BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, and BEARISH.

* Everything written in BROWN is a repeat from a previous day(s)

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMER ERRORS.

Last Post For This Week

Disaster Capitalism

Disaster Capitalism [LINK to video]is a term used by Naomi Kline. JS in the comments section of the blog calls it “creative destruction.”

You create an economic disaster. and use the disaster not fix the causes of the problem, but to create a new economic structure.

• Trillions spent on foreign wars
• Trillions spent to fix disaster created by shadow banking system (bailouts, QE’s, Stimulus.etc)
• Trillions spent on Bush tax cuts that give great benefits to wealthiest Americans

The bait and switch -  The current case is, obviously, to obsess on the debt and ignore the clear and present economic and jobs crisis

The corporate oligarchy uses disasters, their media, their lobbyists who own politicians to enhance globalized corporate wealth and devastate Main Street America.  The debt crisis provides a perfect cover for this to continue.

A Supposed American Icon Apple Computer

Example - Wildly profitable AAPL has been expanding massively in China. Foxconn,  the largest manufacturing company in the world and of AAPL products treats people like machines.

• AAPL, while we have been fixated on wars and economic crisis, has been steadily outsourcing  jobs mainly to Foxconn and other foreign entities.

• Labor is a fraction of the price, there are no pensions, no health care, and no benefits.

• The Chinese peg their currency 50% of the USA’s. We have a 2.5% tax on Chinese goods and they have a 25% tax on our goods. This gives a huge added incentive to manufacture in China. All our polls allow this because they are dominated by the corporate oligarchy the profits from this.

The end result in a post Steve Jobs Apple will be moving even the corporate headquarters to China, because that’s where all the jobs and new consumers will be.

In the short term, globalized companies may take a hit if the US defaults, but this will also give them cover to send more jobs abroad or force the same economic conditions on US workers that the Chinese have.

These actions (from outsourcing to trade/tax policies) are being repeated by all major globalized US companies with the help of the vast majority of US politicians including POTUS.

How you can adapt to creative destruction/disaster capitalism – Learn Mandairin and how to bow to Chinese/corporate masters.

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A better example would have been the bait and switch of US shadow banksters, but Investors411 has covered this topic many times.

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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

Index	Percentage	Volume
Dow	-0.73%	up
NASDQ	-0.10%	up
S&P 500	-0.41%	up
Russell 2000	-0.79%	-

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Technicals, Fundamentals & Analysis

Shorter Term Outlook.

day/days/week

• AAPL, up eight days in a row, is almost singlehandedly kept US stocks solvent. Nothing goes up forever and AAPL is due for a correction.

• Two of our most successful technical forecasting tools listed below – Of course the big dog out there is the debt crisis in DC. It trumps everything. If there is some favorable resolution for Wall Street (It may NOT be favorable for Main St) The lower the MO & dollar go the bigger the rebound higher for stocks.

• The McClellan Oscillator (MO) chart fell to -36.58(-30 somewhat oversold, -60 oversold, -90 OMG oversold). We are somewhat oversold in the short term. The June low for the MO was @-70. Current Level = Neutral/Bullish

• $USD The Dollar fell significantly -0.80% yesterday (+/- 0.50 is a significant move and the dollar is usually a contrarian indicator) Chart shows dollar on its way to challenging the May lows. = Bullish/Neutral

• Reading The Tea Leaves - Instead of focusing on the clear and present danger – the economy & jobs, the corporate oligarchy has created an immediate debt crisis.

Longer Term Outlook

weeks, month, months

• Both Parties have drawn up last minute plans that they think help them get elected.  There may be a lot of political back slapping over some ineffective plan. The danger is this will be repeated over next years budget, and if Republicans have their way, before the election.

• This would create added uncertainty over extended period and hurt the American consumer.

• For Main Street USA the continued uncertainty will be devastating. No ones working on job creation and if you cut current government spending there will be even less jobs. How do you fix any deficit without jobs? For Wall Street the results will be negative. Globalized companies that make their profits outside the USA will profit in the long run.

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

Monday’s Headline Repeated

PROTECT YOUR MONEY

NLY - Annaly Capital Mgt. Ultra high dividend stock – This was the one stock I thought could weather what will be a repeated debt crisis storm, because during the 2008 meltdown it produced double digit returns (one of you mentioned this in the comments section)

In  my personal portfolio I have a Put position to protect NLY -

All the blow concepts  considered because of the potential of a US default.

Check the comments section of blog during day because at least one of these positions will be added to hypothetical Investors411 portfolio.

GLD & SLV – Gold is at a new high.

UDN – An ETF that shorts the dollar.

BZF - ETF that tracks Brazil’s currency. Big breakout to new highs. Major mistake not to buy this currency.

What about cash? – Realize that as the dollar falls your cash becomes less valuable relative to other currencies. Interest rates may explode if the US does not honor its debt (example Greece) This too would make your cash less valuable.

Disclaimer - Personally I own  a group of dividend stocks including NLY. I have placed puts on one ETF of a major index and a couple of dividend stocks. I buy everything in the hypothetical Investors411 portfolio.

JS in the comment section has used the term ”insurance” to describe the way ”Puts” are used protect long term investments. – email me if you want to know more or post a question in the comments section.

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Long Term Outlook (for US Economy)

BEARISH

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Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative Comments Section every day.

Longer Outlook for US stocks downgraded from CAUTIOUSLY BULLISH to NEUTRAL

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Longer Term Outlook (for US stocks)

NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

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Republicans Walk Out

Eric Cantor (Republican House majority leader) has walked out of the deficit negotiations.

Reason – he will NOT compromise on tax cuts for the richest Americans

From the Wall Street Banksters to Hedge Fund Billionaires we have seen a huge transfer of wealth in the last 30/40 years. Peter Whoriskey from WAPO is latest to come out with data. So lets mix his data with Robert Reiche.

• 1975 – The top 1/10 of 1% = 2.5% of US income.
• 2008 – The top 1/0 of 1%= 10.4% of US income. (They earn over 1.7 million a year)
• Today the top 400 richest Americans pay a  only a 17% tax rate.

Wall Street Banksters,(derivative investors/players that caused the 2008 meltdown) Hedge Fund Manager  and uber wealthy  who invest in the High Frequency Trades (They make $ off the imbalances in trades) and others pay only 15% on their capital gains tax.

The uber wealthy are protected by an army of lobbyist in congress and obviously Eric Cantor and Jon Kyle.  It also sure looks like the uber’s have a piece or perhaps all of Obama on their side too. He sure hasn’t stuck his neck out and lead in  this default crisis.

China

SHIBOR The highly volatile short term interest rate levels in China have come down, but the longer term 1 year rate is steadily rising.

The following is Good news for Europe (depending on your point of view) –  China working with IMF on Europe

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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	-0.49	Up
NASDQ	+0.66	Up
S&P 500	-0.28	UP
Russell 2000	+0.35	-

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Technicals, Fundamentals & Analysis

• Major News of morning - Two Italian banks Intesa Sanpaolo and Unicredit have had their trading halted after falling about 8%.  Obviously bad news – how bad is in the details.

• The McClellan Oscillator (MO) chart fell to +5.23 (below -30 = somewhat overbought, above +30 somewhat overbought ) Repeat - The MO has been unable to get above the +30 to +50 range for 6 months.  So we have rally room to till MO gets to +30 to +50 range. = Neutral

• $USD The Dollar rose  significantly +o.79% yesterday. (+/- 0.50 is a significant move and the dollar is usually a contrarian indicator)  The trend since May 1 is bullish for dollar and bearish for stocks. Another rally day like yesterday and the 5/1 rally will have a new high. For stocks short term trend = Bearish

• Reading The Tea Leaves - Shorter term – From yesterday – MO now neutral, and momentum with bears. Wrong about momentum High beta stocks were able to rally in increased volume, despite a significant move higher in the dollar. Most high growth/beta stocks make their $ abroad and a stronger dollar cuts their profits. When beta stocks rallied despite the dollar’s rise it showed strength – For now the bulls are back

• Our MO chart has been very accurate in predicting short term tops and bottoms. So tea leaves say wait for an oversold or overbought levels to be reached before acting.

• Reading The Tea Leaves - Longer Term - No change – See May 20th blog.

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Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

NLY - Annaly Capital Mgt. Ultra high dividend stock. Bought on a dip over a month ago.

TZA yesterday opened up a massive +4% higher and was way too high to buy.

Repeat longer Strategy remains – I’ll wait till the MO gets to at least +30 to short stocks

• Short any rally - Investors411 will use TZA (3X short small cap stocks) and SDS (2x short S&P 500 more conservative).
• Sell long positions into any rally -

Disclosure - I own NLY &  a group of dividend stocks which I have used some short ETF’s to protect. – I buy all stocks mentioned in the hypothetical Investors411 portfolio.

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Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative comments section every day.

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The Fed has moved from an expanding money supply to a neutral – No QE #3. Congress is threatening to contract the money supply. “We [the USA] need to grow at this point more than anything else.” Investors411 outlook will remain negative on the USA unless the Fed and/or congress return to more pro growth policies and/or Euro defaults are solved.

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Longer Term Outlook

Neutral/CAUTIOUSLY BEARISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

Shanghai Traffic at Night

SHIBOR

What the Hell is SHIBOR and why should I care.

Perhaps some of you know what LIBOR is because it directly tied to your mortgage rate or home equity loan. SHIBOR = Shanghai International Offered Rate. This is the standard interest rate Chinese banks offer each other.

Here’s the problem – China is the White Knight – that is supposed to come to the rescue of everything from European debt to the future growth of the world’s economy.  American companies are counting on China for cheap labor and future customers. – Here’s the problem almost no one is talking about –  Interest rates in China have significantly increased in the last week, few days.

The source I referenced above is often over the top and glorifies Ron Paul. But I think they have a point. Their headlining a blip to 9% rates today. That number is accurate according to the SHIBOR main web site.  I can’t find many major financial sources as alarmed as the original source. However I know China’s interest rate hikes this year are a major major concern for every investor. [Google "China Rate Hikes"]

Bottom Line - This is yet another reason to say - its NOT a time to have unprotected long assets. When China’s interest rates become a topic on financial channels markets will melt down quickly

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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	-0.66	Down
NASDQ	-0.67	Down
S&P 500	-0.65	Down
Russell 2000	-0.81	-

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Technicals, Fundamentals & Analysis

• The McClellan Oscillator (MO) chart fell to +15.35 ( below -30 = somewhat overbought, above +30 somewhat overbought ) From yesterday – The MO has been unable to get above the +30 to +50 range for 6 months. So it sure looks like our four day rally will run out of room very soon. There is a series of lower highs on the MO chart that s very bearish in the long term. MO right now = Neutral

• $USD The Dollar rose  +o.34% yesterday. ( +/- 0.50 is a significant move and the dollar is usually a contrarian indicator)  The trend since May 1 is bullish for dollar and bearish for stocks For stocks short term trend = Neural

• Reading The Tea Leaves - Shorter term – From yesterday –  ”MO shows we’re technically entering overbought territory. Advantage bears. Can’t help thinking all those put positions were the reason for the rally. Now that the # of Puts is back to normal, we are close to overbought, and only a week and 1/2 of Fed money remains to juice stocks the bears case should gather momentum.” MO now neutral, and momentum with bears.

• Reading The Tea Leaves - Longer Term - No change – See May 20th blog.

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Paul’s Corner

Your Stock List

Your Stock List 4 certainly took it lumps with the end of the bull run that we enjoyed since last September. Selecting stocks at the end stages of a  bull run is often difficult and your chances of making money is slim.  It’s time to retire this beaten warrior and start researching a new “Your Stock List”

[Editors note - See/LINK to POSITIONS Section of Blog (scroll down to bottom) for May 20th recommendations on YSL and the list of stocks]

Kindly make your suggestions to Barr for review. CPHD and ABC should remain from YSL 4 so we need 12 to 14 new stocks for the list.

HGSI screens have produced an interesting list of quality growth stocks that have ignored this correction. For your review, a few charts with excellent credentials.

SBH – Sally Beauty Holdings, Inc., together with its subsidiaries, engages in the distribution and retail of professional beauty supplies. The company operates in two segments, Sally Beauty Supply and Beauty Systems Group.

UA – Under Armour, Inc. develops, markets, and distributes performance apparel, footwear, and accessories for men, women, and youth primarily in the United States, Canada, and internationally.

HOC – Holly Corporation, together with its subsidiaries, operates as a petroleum refiner in the United States. It produces light products, such as gasoline, diesel fuel, jet fuel, specialty lubricant products, specialty and modified asphalt, liquid petroleum gas (LPG), carbon black oil, and gas oil/intermediates

CRS – Carpenter Technology Corporation engages in the manufacture, fabrication, and distribution of specialty metals primarily in the United States, Europe, the Asia Pacific, Mexico, and Canada.

TUP- Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products.

HS – HealthSpring, Inc., through its subsidiaries, operates as a managed care organization in the United States. It focuses primarily on Medicare, the federal government sponsored health insurance program for the U. S. citizens aged 65 and older,

RBN -  Robbins & Myers, Inc., together with its subsidiaries, supplies engineered equipment and systems for various applications in energy, industrial, chemical, and pharmaceutical markets worldwide.

CROX - Crocs, Inc. and its subsidiaries engage in the design, development, manufacture, marketing, and distribution of footwear, apparel, and accessories for men, women, and children.

FOSL – Fossil, Inc. designs, develops, markets, and distributes fashion accessories worldwide. It offers a line of fashion watches under its proprietary brands, such as FOSSIL, MICHELE, RELIC, and ZODIAC; and through licensed brands, including ADIDAS, BURBERRY, DIESEL, DKNY, EMPORIO ARMANI, MARC BY MARC JACOBS, and MICHAEL KORS.

FTO – Frontier Oil Corporation, together with its subsidiaries, engages in refining crude oil and marketing refined petroleum products. It purchases crude oil to be refined and markets the refined petroleum products,

OME – Omega Protein Corporation processes, markets, and distributes fish meal and fish oil products in the United States. It produces and sells various protein and oil products derived from menhaden, a species of wild herring-like fish found along the Gulf of Mexico and Atlantic coasts. (Just added to the Russell 3000 index)

ZAGG – ZAGG Incorporated designs, manufactures, and distributes protective coverings, audio accessories, and power solutions for consumer electronic and hand-held devices.

Disclaimer, no buy or sell recommendation is made for any stock listed in this post. Understand?

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Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

NLY – Annaly Capital Mgt. Ultra high dividend stock. Bought on a dip over a month ago. This stock  is up almost 5% since purchased and has a dividend of @ 13.5%

TZA – ETF that is 3 times short small cap stocks Sold remaining TZA near open at 38.30 for -5% loss. When you add in the rest of the recent TZA trades +8% & +4% total = @ +2%

Mea Culpa – Selling TZA yesterday was probably a big mistake.

From yesterday -The short term player in me wants to sell this position (futures are down so TZA will rally at open) and buy back in at a better point. The long term investor wants to hold onto this. I’m leaning short term. I’m influenced far too much by short term trading blogs and almost all of you want something to buy and hold. You’ve repeatedly told me you “have a life “ and don’t have time to watch things on daily basis.

Like many of you I believe in DIVERSITY. I have a portion of my portfolio in long term holdings (mostly dividend stocks) and have protected them by owning some ETF’s that short the markets SDS & TMZ. I have discussed this in the blog and with many of you that have my email address. SDS & TZA are insurance for potential price falls. I will continue to protect my long positions until further notice.

Investors has gone over Dividend Stocks over the past couple of months and when I have the time I’ll compile this and put it into one section and post it the POSITIONS Section ASAP.

Repeat Strategy remains

• Short any rally - Investors411 will use TZA (3X short small cap stocks) and SDS (2x short S&P 500 more conservative) Will buy more TZA or SDS near open.
• Sell long positions into any rally -

Disclosure - I own NLY, & TZA as well as a group of dividend stocks – I buy all stocks mentioned in the hypothetical Investors411 portfolio.

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Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative comments section every day.

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The Fed has moved from an expanding money supply to a neutral – No QE #3. Congress is threatening to contract the money supply. “We [the USA] need to grow at this point more than anything else.” Investors411 outlook will remain negative on the USA unless the Fed and/or congress return to more pro growth policies and/or Euro defaults are solved.

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Longer Term Outlook

Neutral/CAUTIOUSLY BEARISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

James Verone

Sorry Server was down most of the morning  - so here’s a quick mix.

• Markets rallied in pathetically low volume.  Our MO indicator says thing are not oversold and back to neutral. Financial stocks took a hit yesterday.

• Greek gov’t has confidence vote tonight. It will pass. This should rally stocks. Key is the size of demonstrations in front of parliament. Greek people feel banksters share responsibility for crisis and should be held accountable not just people of Greece.  This crisis through out Europe is going to be twisting in the wind all through summer and beyond. Besides its debt problems Greece now has to pay almost 30% interest rate on its bonds.

• Banksters are calling the shots in Greece as they have since the 2008 meltdown. “The epicenter of the new crisis is Greece, which epitomizes the folly of banker rule.” - Bob Kuttner

• SHIBOR rockets to 8.6% – Translation =  China has a significant exploding inflation problem that crucial to economic worldwide growth.  Not good news.

• Lots of blogs headlining how you can get health care for $1.00. Story of James Verone who desperately needed medical attention so he held up a bank for $1.00 then say in a chair to wait for police.  He now gets free medical care. – The money quote from Verone - “When you don’t have your health you haven’t got anything.”

• Read of tea leaves – short term rally continues on Greek news. No change in long term outlook or strategy.

Paul’s Corner

1^st Official Day Of Summer! Wow! Market futures are up, time to jump back into the pool?

Yup at 6:30 this morning market futures are up and you know what that means, once the market opens at 9:30 all bets are off. Great place to put your money, eh?

Yesterday was an up day and many of the indexes finished up but it was done on low  volume.

The bulls are trying to make a stand but there appears to only be a few bulls ready for action.

David Garlardi, an HGSI user, posted a link to an interesting article “Economies are slowing around the world…

LINK

The last line is important “The US dollar gained against the Aussie dollar and other major pairs as investors’ risk appetite diminished following the minutes. ” If this indicates a change in the direction of the US dollar, a strong dollar equals a weak market. (Interesting, the world economy is slowing, I GUESS Obama’s policies really don’t work)

Bio-Tech led the way yesterday in the high demand stock search, 2^nd and 3^rd have some of our old favorites:

Apparel Accessories & Luxury Goods (5.00%, 5 securities)

• Fossil  Inc. (FOSL)
• Lululemon Athletica  Inc. (LULU)
• True Religion Apparel  Inc. (TRLG)
• Under Armour  Inc. (UA)
• Warnaco Group  Inc. (WRC)

Specialty Stores (4.00%, 4 securities)

• OfficeMax Inc (OMX)
• Signet Jewelers Ltd. (SIG)
• Tractor Supply (TSCO)
• Zale Corporation (ZLC)

So what’s the market going to do today, futures are up this morning, is this a new morning in America or another fakey before the BIG crash? Let’s load up Quote Tracker………here we go folks another day of fun!

Remember, you are responsible for your investment decisions, and I am not.  Please do your diligence, and please take ownership for your actions because I‘m sure not going to.

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Longer Term Outlook

Neutral/CAUTIOUSLY BEARISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE