WikiLeaks

CBS has published a can extensive compilation/summary of WikiLeaks documents that you can judge for yourself instead of listening to all the spin. Their title -” How WikiLeaks Enlightened US”

Transparency is essential to a vibrant Democracy.  Is the USA shifting toward a more dictatorial state like China and Russia that practice greater censorship of the press and persecution of those who oppose the government?

WikiLeaks has exposed no “Top Secrets” like Daniel Ellsberg did decades ago or the NYT did last decade. They have published “secrets” Here’s a Debate featuring Glenn Greenwald backing Jullian Assange and Fran Townsand in opposition

I do have have a bias because I’d love to see WikiLeaks information on the Shadow Banks and strongly believe  transparency is vital to freedom and democracy.

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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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Technicals, Fundamentals & Analysis

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

• Markets were flat & volume abysmal AGAIN
• There are indications that at least some fresh money may be coming into stocks in early January. (see below)
• The dollar has fallen like a stone for last 3 days and broke its support level For US stocks = Bullish
• Big news at end of week is the unemployment report.
• Here’s Seeking Alpha’s Jeff Miller on this week – “Less Risk, More Reward“
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Reading The Tea Leaves

The first days of the month and Mondays are historically good days for US stock markets.

Friday we went over the possibility of an infusion of new money into the market in early January. All those giant shadow bank  and Wall Street executives have to put their bonus money somewhere and there is some evidence that it has started to trickle back into stocks (See Friday’s Investors411)

The dramatic reversal in Oil prices Friday caught at least me with my pants down.(see UCO below)  Oil prices more than making up the gains of the previous two sessions of losses is bullish for oil, commodities and stocks.

The  dollar significantly through a support level is a very bullish sign.

So when you put this together with the dollar breaking a signifiant support level Friday - At least for the short term -The Bulls are back.

The MO is at +15 and therEfore has lots o “wiggle room” before it reaches +or - 60. Room for a rally

Repeat- AAPL the world’s #1 tech stock is the canary in the coal mine. If the General rolls over watch out.

UUP the tracking ETF for the dollar is what to watch today. If it falls again – Bulls could Roar

Note Well - The dollar’s fall & corresponding rise in oil prices is something I should have noticed at 3:00 EST yesterday. Unfortunately, its called get a life, and I was otherwise occupied. If not I would have bought some long positions Friday PM.

HOPEFULLY, INVESTORS411 EDUCATES YOU SO THAT YOU CAN LEARN/UNDERSTAND WHY MARKETS SHOULD MOVE HIGHER OR LOWER

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Positions

• #1 UWM - (2x small cap stocks ETF) – 1/2 position
• #2 UWM
• SLV – (Silver ETF) Bought Wednesday at (see comments section of blog.)
• DGP -(2x gold ETF) Bought yesterday at 41.86

Under consideration

UCO -(2x oil prices) From Friday – “Oil prices got over extended and a short term reversal is to be expected”. Mea Culpa – Waited too long for dip as UCO rose 4+% yesterday and got stuck with a 1% loss by selling early Friday. (see Friday’s blog) Too high to by right now.

REMX (Rare Earth ETF) – Friday – Way too hot to buy now. Like a zillion investors who missed this initial jump we are waiting for a pullback. Lost -2.04% Friday. Would buy any similar drop today, but afraid its not going to happen.

EWZ (Brazil) & LBJ ( 3x Latin America – majority Brazil) Obviously the later is more risky because its leveraged 3X. On a role with three big up days in a row. Short term traders may risk buying a dip, but again afraid there will be no dip.

Note - The time has come to start rotating out of small cap stocks. They have had a great run. They will go up if the other major US indexes rally. However they probably won’t outperform as well as they did last year.  Investors will be looking at other leveraged ETF’s that have larger caps. So will sell some UWM today – hopefully into a rally.

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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)

Now, because of the Supreme Court we have unlimited corporate spending This vastly increases the power of the wealthy, big corporations and Wahington lobbyists

If you think this has no impact on YOU.

• Look at what the lobbyists did to deregulate the financial industry. The result was the 2008 financial meltdown – Even with Bernanke, Bush & Obama massive influx of YOUR tax dollars and printed money keeping us from a total worldwide economic collapse – Look what happened to employment, your houses value and your stock portfolio. You pay and pay and pay. Like you are saying in the comments section of the blog – Wake Up and Smell the Coffee.
• The Big Financial Services bill to regulate the shadow banks - 40% more money went to those who opposed Wall Street reform. Even those who voted against it received mountains of cash.

You’re simply the sheep being led to the slaughter in what you think is a transparent democracy. There is an growing oligarch that owns/buys more of your democracy each day.

Sources -

• Dylan Ratigan Show especially this clip which is far more powerful than the above editorial.
• MapLight.org gives you legislators, their donors and ties it to specific bills. You can see how much an industry and/or individuals paid to get a specific bill passed.

More on elections tomorrow – facts and solutions.

Again from previous days – “Not making any specific move until dollar breaks out of its range. I would look at a breakout higher for the dollar, and a corresponding fall in stocks and the MO to oversold as a buying opportunity for long term investors.”

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.”

We the People? or We the Wealthy People & The Giant Corporations.

Iraq

Still in chaos following elections almost 8 months ago. Pro Iranian Mullah Sadr has joined one side giving the side of former president and Sadr a clear advantage. Longest time any country has taken after election to form government.

We The Corporation

On Feb. 22 in a 5 to 4 vote the Supreme court  struck down federal regulations that restrict the amount of money corporations can put toward political advertising during elections.

• Now, any corporation can legally give millions to a candidate while YOU are restricted financially.
• What’s worse - Any millionaire can for a nominal fee form a dummy corporation by incorporating and directly give hidden money to a candidate or attack add group.

Money is the mother’s milk of politics and obviously this ruling puts both corporate power and individual wealth above the voice of we the people. Yes democracy has changed as both major parties have been lavished by corporate buying power. This holds especially true for what Tom Friedman termed the Tea Kettle Party.

History is full of wealthy oligarchies falling to people power. The 20th century is a great example of the rise of democracies. It is disheartening to see the world oldest running democracy move in the opposite direction.

Yet, at some point  in time people stop thinking  “about what happens one or two steps ahead” (from mathematician John Paulos – see blow) and wake up. Example – Tea Kettle platform (Tea Party) A tax cut for the wealthy, more foreign wars, and cutting taxes on huge corporations is going to decrease the deficit for our kids.

Warren Buffett says it best – “It’s class warfare, my class is winning, but they shouldn’t be.” Source for this & other Buffett quotes.

Firefighters and Homeowners

The comments section always has some of the best editorials and news. Paul R on the privatization of fire departments.

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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

Technicals, Fundamentals & Analysis

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

US Stock Markets -

Stocks fell primarily because of the rise in the dollar. (see below)

John P Hussman PhD is a mathematician who predicted the recession. He often comes up with some interesting mathematical models for what’s happening. His Oct. 3rd newsletter

His view -”To some extent, I view current market conditions as something of a “Ponzi game” in that valuations appear neither sustainable nor likely to produce acceptably high long-term returns, and speculators increasingly rely on finding a greater fool.”

Hussman Quotes mathematician John Paulos on human nature and stock markets - “people generally worry only about what happens one or two steps ahead and anticipate being able to get out before a collapse… In countless situations people prepare exclusively for near-term outcomes and don’t look very far ahead. They myopically discount the future at an absurdly steep rate.” Undoubtedly, we have periodically missed returns due to our aversion to risks that rely on the ability to find a “greater fool” in order to get out safely. But it is important to recognize that speculative risks are not a source of durable long-term returns.”

With the extremely light volume and the dominance of market manipulators (BB/HFT’s etc) Investors411  is taking the position that these guys have a pretty good call on what’s happening. Therefore, a cautious approach based on the MO, the dollar, the BDI and major support resistance levels seems prudent. (see below).

The one differing point of view with Hussman is that emerging market are increasing becoming stronger and are more able to fend for themselves. Therefore the US can catch a cold economically and stocks can still rise. Just hope we don’t get the flu or worse.

Earnings season starts Thursday with Alcoa reporting and bloom next week.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar rose  +0.45% Monday.  We had the biggest rally in the dollar in over a month. Today will act a confirmation of the rally. We could see a reversal of the trend.  For stocks falling dollar trend is = Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rose +1.06% Monday.  An 8 week bull run, then a two week fall. Now consolidating for last few sessions = Neutral
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.]   Fell to -7.92. Still lots of room to move higher or lower. Location= NEUTRAL

Reading Tea Leaves

From yesterday – “Hard to see any serious stock reversal with the dollar continuing to fall. The BB/HFT’s algorithms seem to be set to buy the dip.” - The dollar have its biggest single day rally in a month and this reversed stock market mo jo. A one day reversal is obviously NOT a trend.

Traders – The market manipulators have been “buying the dips”- like yesterday’s fall of the MO into negative territory. Those who are looking for a safer entry may wait till -20 on the MO or more.

Positions

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

(I do manage 6 accounts that have other positions)

• EWS (Singapore)  One of several foreign ETF’s that have broken out and starting to get over extended.
• USO (price of oil/commodity). Exploded through resistance level and nearing 5 month high. Part of this is tied to dollar falling.
• SSO (2x what S&P does)  Still held onto last 1/2 of SSO. But will place another 2% trailing stop loss today.

Traders – Will continue to use/ buy SSO & TYH on dips if MO falls to @-20. For concepts on individual stocks see Paul R.’s always enlightening comments on right side of blog.

Investors – EWS and USO are getting over extended from their base. I like to sell 1/2 the position and let the rest ride as long as I have @ a 10% profit.  Will buy back in at next dip. I am looking forward to building a larger position in both. Will add other foreign ETF’s along with UCO (@2x USO on bigger dips) See Positions section.

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Not Fit for Democracy

It seems that our brains are hardwired against democracy. “It’s one of the great assumptions underlying modern democracy that an informed citizenry is preferable to an uninformed one” A truly fascinating article in the Boston Globe about how the mind works by Joe Keohane concludes-

When misinformed people, particularly political partisans, were exposed to corrected facts in news stories, they rarely changed their minds. In fact, they often became even more strongly set in their beliefs

This is why appeals to emotionalism, hatred and fear  in politics and with media sources that the moneyed class own works so well. Rush Limbaugh, Glenn Beck, Fox news, the Tea Party Patriots, Sarah Palin etc. all embrace this emotional bias and hatred. They keep pounding on it day after day. 20 years ago news casts used to report and analyze facts. Times have certainly changed. (See Popeye in comment section of blog)

Now It Gets Interesting

It seems that shadow bank lobbyist were able to to gut or seriously water down the Volker Rule, The Lincoln Derivative amendment and almost all of meaningful bank reform, but they forgot or overlooked the Kanjorski Amendment. I never heard of this amendment before either, but Simon Johnson has – “In essence, Kanjorski proposed that a group of 10 federal regulators be given the explicit power to break up big financial firms when they pose systemic risk.”

Now the fun begins –  two Republicans have said they would vote for the bill two democrats against – Senator Feingold (D) does not think it does enough.  The bill does contain a consumer protection agency. Imagine that – something to protect you and me the consumer. More

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 Earnings Season begins this week. – How markets react to news Will be key. If a stock shrugs and goes nowhere on good earnings news you know theirs trouble ahead. Remember Black Box algorithms  dominate even more as volume declines.

Pathetic volume  & flat market. = Neutral

Alcoa (AA) reported last night and slightly beat expectations – How the market reacts to this news is VERY important. Are slightly better than expected earnings built into stock prices? Will find out today with AA. Futures trding up = Bullish

A downgrade of Portugal’s debt did not hurt stocks yesterday – Bad news not hurting stocks shows that it is already built into market prices or expected by investors. = Bullish

The MO (see below) fell 20+ points yesterday. This gives bulls between 30 and 50 points to move higher on the MO before encountering resistance at +60 to +80. Translation another 2 to 4% move higher in the benchmark S&P 500 s possible before resistance is encountered.

Significant Indexes-

• McClellan Oscillator (MO) fell to +32.57[+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. This index is just a wee bit overbought  = Neutral
• US Dollar –  The dollar rose +0.31% Friday [Anything over +/- @0.50 is significant.] The dollar is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, that make up to 80% of all trades, have used the inverse relationship of the dollar as a key part of their trading system. The big move was breaking the support level two Friday’s ago which set up the rally for stocks. The swings in prices are smaller, but growing and therefore right now = Less Relevant
• 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  1840 Monday. This is a huge -56% drop in 7 weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI fell a decreased -3.26% yesterday. Rate of decline increased yesterday. = BEARISH

The dip in the MO & the good reaction to bad news (Portugal) means that the bulls are back for another run higher.

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own - Updated over weekends – Investors411 holds NO position at this time. (see below)

Unfortunately, for us, the MO fell 20+ points. Bringing it down from almost overbought territory. The more overbought the better time to invest in one of the short ETF’s. Right now our best opportunity is to go short in an overbought market – However conditions are not yet appropriate

We missed a chance to go long when the MO went below -50 and  I hope we did NOT miss a chance to go short when the MO was above +50.  The area around +/- 60 has been our go long/go short point. Obviously this line is NOT written in stone. – Only time will tell – But be patient - There will be lots of opportunities to go long and short this year

Here’s a list of some Proshare and Direxion ETF’s that short sectors/indexes. You can find a much more complete list clicking here and scrolling down until you find each funds name and LINKS.

• SDS - @200% short the S&P 500
• QID – @ 200% short the NASDQ (basically tech stocks)
• SH – Short S &P 500
• FAZ – @300% short financials
• TYP – @300% short  technology
• EPV – @200% short Europe

Long Term Outlook =CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Chucky shredding wire from the movie or one of the remakes

Shredding Democracy

• Before Paulson/Bush asked for the  $700 billion 2008 bailout
• Before the worldwide 2008 stock meltdown
• Before Lehman Brothers went belly up

the FED Bank under Bernanke acting on its owned spent tens of billions of of unauthorized dollars bailing out AIG and Bear Stern. Without any constitutionally mandated congressional approval or oversight Bernanke/Geithner (who was NY fed board member) flooded these failing shadow financials with money. Did Paulson/Bush know this was happening?

“Its {the FED}secret deals, announced almost two years after they were done, violate the democratic process, if not the Constitution itself.” Robert Reich (Economist and former Sec. of Labor) The Fed came clean about this (masterfully) directly before the Easter break and American media has blown the story. Reich accurately explains the fall out here

What other secrets is the Fed hiding?

Shredding the Yankees

Yesterday was opening day for baseball, and hope springs eternal for every team. Most fans walk through a dark ballpark tunnel into a brightly lit transcendent green field full of hope on opening day.  The beloved Red Sox did twice come from behind to beat the evil empire, sometimes known as the New York Yankees, last night. Unfortunately there is over 170 games left if you make the playoffs and the Yankees will certainly shred far more teams than almost every other in baseball. Go SOX’s.

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

See Positions , Strategy , and Overview for changes made each weekend

Friday’s March jobs report was better than expected, especially for the critical private sector +123,000 jobs created.

It clearly looks like jobs creation started in November and is slowly growing.  Here’s the ultra right wind Washington Times on the jobs report Clearly good news for the economy. The old Jolly Green Giant (not so jolly anymore – Alan Greenspan) and Obama Administration predicting potential acceleration in numbers.

This report, even though the headline -9.7% job loss stayed the same, was too good for Wall Street. The longer interest rates stay low, the better it is for stocks. A better than expected number in the private sector translate to the Fed rising interest rates sooner than expected.

The big stat out of last week was China’s Manufacturing Index coming in better than expected. This shows global growth in emerging markets is still pulling the world’s economy.

Last Week’s Fearless Forecast – “Up week” –  All US markets near highs as rally chugs along. Like the RED SOX against the YANKEES last night. We won.

This Weeks Fearless Forecast – “Up week” – But really difficult call – The Dollar is King right now. Europe is weak (see past Investors411) and the US (jobs report) is strong. The start of the week should see a rally, but the Dollar is coming up against major support level. (see below) Best read of the tea leaves. Our bullish momentum should carry us higher at the start of the week, but I expect the dollar to hold its support. Earnings season is around the corner and the expectations of better earnings will be the deciding factor making it an up week.

Bottom Line – With the McCellan stuck near zero – no wisdom in buying or selling any large position at this time. Will continue to nibble on dips.

Significant Indexes

• McClellan Oscillator rose significantly to -1.46 yesterday.  [+60 or above = Overbought = sell. -60 or below = oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. – This (at least for a day) broke the downward trading pattern. Downside and Upside risk are about the same. We are neither overbought or oversold.
• US Dollar -fell  -0.44% yesterday. [Anything over +/- @0.50 is significant.] Dollar broke through a more minor support level Friday and ended the day at $80.71. The major support at it climbing 50 day moving average is $80.19. Would be very surprised to see this fall. Falling dollar = rising stocks

As stated before -What the dollar does over the next few weeks is critical to stocks and economics around the world. Falling dollar good for stocks & rising dollar bad in the short term

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) - These are positions I actually own

3D and related theater stocks weekend results good. Simply not enough 3D screens to fill the demand.

The big news is the manufacturing growth in China (see above) – Mistake to take profits in FXI (China), but adding EWZ (Brazil) looks to be a good counter balancing longer term move.

Strongly considering adding health care/Biotech ETFs on dips. Their fundamental story is compelling (baby boomers getting older & obamacare covering 30+ million more) Their charts are outperforming. Recently added stocks TEVA & ESRX are in this general area.

Its frustrating, but I’d rather wait till US equities are more oversold to buy larger long term positions.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

WHAT’S UP? - A Standing O at Notre Dame; India/Democracy’s big win; Jim Cramer on who brought our nation to its knees. Soaring stock market – after9 weeks in a row takes a breather; Of course more on Shadow banks; Reading the Tea Leaves.

Photo – Charles Rex Arbogast/AP

Obama’s Sanding Ovation at Notre Dame

The contrast between Obama and the previous administration is like night and day.  Where Cheney Bush projected fear and confrontation, Obama, who inherited two wars and and the greatest economic meltdown since the great depression, worked on ways finding common ground. You can listen to his compelling 30 minute address at this link

Those who tuned in to see Barack the pro choice “baby killer” were soarley  disappointed.

photo BBC

Big Victory in the World’s Largest Democracy

The Congress Party in India surprised the pundents and came close to winning a majority in parliament. The party that saw the biggest drop was (Hindu Nationalist Party) who, as the name implies, fosters nationalism and fear of those who are different.  Also shrinking in size were the many independent parties including the Communist. (Congress will be less dependent on the Communists who were their allies in last government)

Its hard to say how big or small a role Obama’s election in the USA played in the victory of the more moderate Congress party. But the bottom line – a more moderate, less confrontational, and pro business victory in India benefits the world. Congress did reach out and gained more votes from the lower classes in India. Stocks in India have surge 17% – BBC

photo – Time mag.

Cramer’s Interview 

Money quote from CNBC’s most popular stock analyst Jim Cramer, in Time magazine  on the financial innovations of last several decades -

They almost brought our country down. The only guy who really called this right was Carl Marx. Marx understood what would happen if you let the markets run amok. Of course, it was done by right-wing Republicans. They brought our nation to its knees, and we’re not going to end up being a great power because of what happened.

Cramer did take it on the chin in a Jon Stewart interview. Stewart’s  attack was directed rightly at the financial channels concept of cheerleading unregulated markets. Cramer obviously took the attack personally.(See past Investors411 for more)