The Face of a Terrorist

The Daily Beast/Newsweek is featuring a story on the “rise of right wing extremism could spur violent attacks” warned by Homeland Security in 2009. (story by Aaron Mehta)

Some Facts About the USA

• In 2007 there were 47 active militia groups in USA. In 2009 127 (source Atlantic pg 72 & 73 below)
• In 2007 $288 million in taxes from firearms and ammunition. In 2009 $453 million
• Clay Duke, white male, shoots at Florida School Board members and kills self.
• Michael Enright, white male, kills cabbie who he suspects is a Muslim in NYC.
• Byron Williams white male, shoots at & arrested by police on his way to kill liberal members of liberal foundation
• Joe Stack, white male, drives his private plane into IRS building.

“Now, if the accused [the Arizona assassin/terrorist] had been Muslim, [instead of white males] does anyone doubt whether this mass murder would have been considered an act of terrorism?” asks Bill Quigley

One of the progressives in the comments section of this blog was recently talked out of buying a gun after the Arizona massacre at a Democratic congresswomen’s event Is it only a matter of time before the left stops lighting candles and violently retaliates? What happens after that?

Rage paranoia and division are growing in a country already consumed with violent behavior. Can President Obama and other leaders step up and use this moment to “Overcome Evil with Good?”

“the atmosphere in which this horrible tragedy was born, nurtured, and carried to its wretched fruition is toxic. Of course, there are always going to be unbalanced people, just as there are always going to be viruses in our environment — but what most determines whether those viruses make us sick is the strength of our immune system. When it is stressed and compromised, infections can easily take hold. “

To paraphrase the title of Arianna Huffington’s excellent editorial (her quote above) What will YOU do is the real question.

Will YOUR voice remain quiet?

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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	-0.32%	down
NASDQ	+0.17%	down
S&P 500	-0.14%	down
Russell 2000	+0.48%	-

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Technicals, Fundamentals & Analysis

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

• Markets fell in the AM and then the Fed primed the money supply with a $7.96 billion purchase of bonds.
• Volume figures relative to the past decade at this time are pitifully low.
• Mantra - THIS IS A  STOCK MARKET BEING MANIPULATED HIGHER by the Fed & the US government. Call it bad, good or ugly – just like QE 1, now QE2 (quantitative easing round 2) and low interest rates for shadow financials is perhaps the most significant driving force behind long term rally (more below under Tea Leaves section)
• Therefore, 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.
• Two significant factors weigh in today on markets – Europe All Eyes on PIIGS & Extreme Bullishness a Concern

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Reading The Tea Leaves

The ”schizophrenic.” pattern changed back again yesterday Big dip at open only to see stocks rally higher throughout the day.

Under normal circumstances this market would have crashed and burned, but for 18 months we had the training wheels of stimulus, low interest rates and quantitative easing.

The Baltic Dry Index is in a meltdown – Simply put the cost to ship goods worldwide is breaking down it costs less to ship each day and is starting to approach levels near the beginning of the recession.

Here’s the anomaly – The prices of the goods they ship are all near record highs – copper, grain, coal etc. Here’s a long list of comparative charts showing a strong correlation between the BDI, stocks and commodities breaking down into a 180 degree reversal.

Line from Hamlet – Somethings Rotten in the State of Denmark - Either some mysterious entity is producing dozens of huge ships each day or perhaps our Fed’s quantitative easing money is also being shipped abroad.  Edit 1/11 2:40 EST – it turns out there is a huge glut of new ships and the sites I used did not have this information. Mea Culpa

What to watch

AAPL - This time Apple had a solid gain as it broke out to another new high (up +1.88%).

UUP –  The dollar went right up its resistance level. It held and the tracking ETF for the dollar ended up falling.

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

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Positions

• UWM – UWM still outperforming other US indexes

Under consideration

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

REMX (Rare Earth ETF) -   Will buy back hopefully on slight dip.  Blew chance to buy dip yesterday – was not near computer when it happened. Only ETF under immediate 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. -  Massachusetts Supreme court has ruled against shadow banks foreclosing because of the difficulty in knowing who owns the hidden derivatives on the mortgage. Obviously in the end (We Have the Most Pro Business Supreme Court Ever – Headline this month’s Forbes magazine) the shadows will probably win. But other state supreme courts will probably be unanimously against this too. – We’ve had a dip on this news and might be done. Those with no ethic problems could consider a buy.

DGP – Will buy back into this 2x gold ETF on dip. Consolidating at support level. A possible buy. What probably happens is a bear raid breaking support. Then once the weak holders are whipped out gold will rally. Here’s a hidden gem of news – India has told Iran it would buy oil in gold. Those that can tolerate the risk – now’s the time to buy.

YOUR Stock List – Paul tells me YSL#3 was back outperforming the S&P benchmark. Add to that Yesterday was an outstanding day for YSL#3

If you check out the comments section of the blog you’ll notice Paul made a call on Solar Stocks a while back. This sector is white hot right now. Moral of the story is if you are a trader, keep an eye on the comments section of the blog for ideas.

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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)

No Repeat Depression

Two highly respected Economist have completed  a major study saying, “A Second Great Depression was averted” for the following reasons. Quote -

• the Wall Street bailout,
• the bank stress tests,
• the emergency lending and asset purchases by the Federal Reserve
• the Obama administration’s fiscal stimulus program

Without this GDP would be 6.5% lower this year and there would be 8,500,00o fewer jobs.

Most economists usual use cautious approaches in quantitative models. They forget – the panic of  banks collapsing, fed by an over hyping media would have cause a far more serious problem.

Investors411 and many of you have been beating the drums on this for 2 years, and its good finally to see a major study come out. Especially one that supports our thesis. Now besides Greenspan, Paulson, Bernanke, Geithner , etc., telling us we would have gone over the cliff, we have some academic support.

Alan Binder Princeton Prof. & former Vice Chair of Fed

Mark Zandi – Chief economist Moody’s Analytic

Smoking Hot Debate

If you’ve missed the comments section of Investors411 you’ve missed the some of the best thing this blog offers – Information and debate on stocks & politics. Right now Jsovjani & Popeye are going toe to toe. Hard to tell if they agree or agree to disagree.

Jsovjani has produced a set of statistics that show the concentration of wealth before Ronald Reagan took office of the richest 1% of Americans was @ 20% and when he left office it was @ 36%. Popeye believes that he has finally found some common ground with Jsovjani our resident “deficit hawk.” The rich getting richer coupled with the fact that President Reagan raised the deficit by over 400% makes “Ronald Reagan, economically one of the worst presidents we ever had.”

What will Jsovjani reply?

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!

Index	Percentage	Volume
Dow	+0.12%	up
NASDQ	-0.36%	down
S&P 500	-0.10%	up
Russell 2000	-0.46%	-

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

Mantra for week -The Black Box/High Frequency Traders BB/HFT control the vast majority of trades.

Another typical light volume day which saw rotation (a bullish thing) out of high beta stocks into more mundane stocks. Overall things were flat.

There was one big bearish sign out there - crude oil – took a big hit right at its resistance level.

Earning continue.

Significant Indexes-

• McClellan Oscillator (MO) fell  to +75.69 [+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. Yesterday’s close = 75.69 = BEARISH But, the MO fell 21+ points and major indexes were flat. Plus its 50 DMA is crossing its 200DMA, and the chart shows a series of higher lows and higher highs. Best read of tea leaves is we are now looking like the MO will drop more on flat days and get us out of overbought territory. Then rally as stocks go higher.
• US Dollar –  The dollar  rose slightly  +0.12% yesterday [Anything over +/- @0.50 is significant.] The dollar/stocks relationship is strong – Dollar up = stocks down and visa versa. Dollar just broke a major downside support level two days ago = Bullish
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also, good proxy of China.) BDI was in free fall from a high of @4200 to 1700 . This was a huge -60% drop in 8 weeks is very bearish Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI has staged a 7 day+10% rally and is at 1869 = Bullish

Reading Tea Leaves-

The highly overbought position of US equities eased yesterday. We are just overbought now. See MO above. Another day/two of easing will give the bulls another chance to charge. There is so much bullish momentum behind the move higher, its hard to see it all stop now. At least retail investors should buy the dip. If we continue to fall out of overbought positions with stocks remaining flat – This would be a signal to go long.

However, Black Box/High Frequency Traders rule, and they may think its time to take profits from this rally. If you’re a trader what to look for (probably on the SPX daily chart) is that every time the SPX rises to a certain level it gets sold into by BB/HFT’s

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Updated over weekends Investors411 holds ONE small position in SDS at this time

Sticking with overall strategy on short ETF’s. However, Probably selling 1/2 of SDS today. Reasons stated above under MO.

EWZ (Brazil – chart on side of blog)) an ETF Investors411 owned for years is again outperforming and is a buy the dip opportunity.

GLD – (Gold) has come down off its high. But a big dip in big/above average volume is a signal to wait.

Going to try to put together YOUR Stock List with Paul R (if he has the time) before I leave for trip.

S&P 500 at 1113. Breakout point to turn Long Term Outlook to CAUTIOUSLY BULLISH is 1131

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!