The long awaited YOUR Stock List #7 is published today

5 of the last 6 YSL’s toasted the S&P 500.

See Paul’s Corner Below

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Effective Government

People as Sheep

Almost 1/2 of the sheeple in the USA have been hit over the head so many time with this concept they believe this -

“Just get government out of the way and everything will be fine.”

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How to Administer Economic

Shock Therapy

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Start with –  So you want to eliminate the US military – because its part of government. This will usually get loud NO repose – except from libertarians. Nevertheless you’ve opened the door to part of government can be effective.

Tell them – Having a well disciplined effective government works – Just like a well disdiplined military.  We took that discipline away  when we deregulated our financial industry .

The story

• In 1998 we deregulated our financial institutions – everybody was for it -Democrats Republicans even Alan Greenspan.

• Bankers are wicked smart and had recently found a new way to make money called Derivatives or Credit Default Swaps. This involved making a bets on the solvency of different bundles of debt.

• Since they had an unregulated opaque derivatives that they thought would protect them they went right ahead and offered fabulous cheap mortgages to Americans.

• These wicked smart bankers also bought bonds off some troubled European countries because they they had unregulated derivatives to back them up.

The rest is history – the 2008 meltdown and the EURO meltdown we are now in. This has caused the greatest recession of our lifetimes and it will get worse unless we again have effective government.

I’ll outline some details and cost figures when there is more time. You can do so by looking at past Investor411′s. But the obvious bottom line is -

Effective Government regulations work.

Good discipline is important just like it is in the army

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STOCKS

The Puppet Master

Goes Global

Yesterday the Puppet Master and his assistants proved he’s still in charge as global equities soared. Volume was light and, of course the algorithms of the HFT’s made up most of the the trades.

World equity markets soared

How does the puppet master make the puppet dance? My best read of the tea leaves is that he and is assistants intervene in the bond and/or derivatives market. They  drive down the bond yields of certain at risk countries (probably Spain and Italy, perhaps even the USA) or their derivative spreads by making purchases.

Traders/Investors, who have robotically based their stock purchases on the implosion of Euro bonds saw the yeilds fall and found some other place to park their money – stocks.

The puppet master had already pulled the strings and worked his magic in the USA bringing stock prices up from the infamous low of 666 in 2009 to yesterday’s close 1192 (S&P price)

What’s happened is that the puppet master has gone global.

Actually he had gone global long before this (see list of secret loans to foreign and US banks in yesterday’s Investors411  financial chart) Now with new allies like foreign governments, central banks, even other major financial institutions he is making his presence felt.

Who is the Puppet Master?

Fed Chair Ben Bernanke

Some hate Bernanke with a passion, others are his ardent allies. Investors411 simply recognizes him as the puppet master who is holding the world’s fragile economy in balance.

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Paul’s Corner

YSL 7 Watch List

Here you go folks, YSL 7! A mix of some well known stocks and a few new to most of us. Stocks were selected from reader suggestions and Barr and I tossed in a few.

AKRX Akorn, Inc. engages in the manufacture and marketing of diagnostic and therapeutic pharmaceutical products, hospital drugs, and injectable pharmaceuticals in the United States and internationally. It offers products in various specialty areas, including ophthalmology, antidotes, anti-infectives, pain management, anesthesia, and vaccines.

CATM Cardtronics, Inc., together with its subsidiaries, provides automated consumer financial services through its network of automated teller machines (ATMs) and multi-function financial services kiosks. As of June 30, 2011, it offered services to approximately 37,800 devices across its portfolio, which included approximately 31,600 devices located in 50 states of the United States,

CMG Chipotle Mexican Grill, Inc. develops and operates fast-casual, fresh Mexican food restaurants in the United States. It also operates restaurants in Toronto, Canada and in London, the United Kingdom. As of October 20, 2011, it operated 1,100 restaurants. Chipotle Mexican Grill, Inc. was founded in 1993 and is based in Denver, Colorado.

DECK Deckers Outdoor Corporation engages in the design, manufacture, and marketing of footwear and accessories for outdoor activities and casual lifestyle use to men, women, and children.

DLTR Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. (Now serving the former middle class!)

FTK Flotek Industries, Inc., together with its subsidiaries, develops and supplies drilling and production related products and services to the energy and mining industries in the United States and internationally. The company operates in three segments: Chemicals, Drilling, and Artificial Lift. The Chemicals segment designs, develops, manufactures, packages, and markets specialty chemicals used by oilfield service companies in oil and natural gas well drilling, cementing, stimulation, and production activities

HANS Hansen Natural Corporation, through its subsidiaries, develops, markets, sells, and distributes beverages in the United States and internationally. It offers non-carbonated ready-to-drink iced teas, lemonades, juice cocktails, single-serve juices and fruit beverages, ready-to-drink dairy and coffee drinks, energy drinks, sports drinks, single-serve still water, sparkling juices, and flavored sparkling beverages.

HLF Herbalife Ltd., a network marketing company, sells weight management, nutritional supplement, energy, sports and fitness, and personal care products worldwide

IMAX IMAX Corporation, together with its subsidiaries, operates as an entertainment technology company worldwide. It specializes in digital and film-based motion picture technologies

IBM International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. Its Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology-based support services.

MA MasterCard Incorporated, together with its subsidiaries, provides transaction processing and related services to customers principally in support of their credit, deposit access, electronic cash and automated teller machine payment card programs, and travelers’ cheque programs. Its payment solutions include payment programs, marketing, product development, technology, processing, and consulting and information services.

RL Ralph Lauren Corporation, together with its subsidiaries, engages in the design, marketing, and distribution of lifestyle products. The company offers men’s, women’s, and children’s clothing; and accessories comprising footwear, eyewear, watches, jewelry, hats, and belts, as well as leather goods, including handbags and luggage

SIMO Silicon Motion Technology Corporation, a fabless semiconductor company, designs, develops, and supplies a portfolio of multimedia data processing, storage, and transfer solutions primarily for consumer electronics applications. The company offers a range of microcontrollers for use in NAND flash memory storage products, including flash memory cards, USB flash drives, and embedded flash and solid state drives.

SWI SolarWinds, Inc. (It’s NOT a solar company) designs, develops, markets, sells, and supports enterprise information technology (IT) infrastructure management software to IT professionals. The company offers free tools, including desktop, laptop, or server-based applications designed for use by individual IT professionals focused on a single network or infrastructure management task;

TSCO Tractor Supply Company operates retail farm and ranch stores in the United States. Its stores offer a selection of merchandise, including equine, pet, and animal products, such as items required for their health, care, growth, and containment; hardware, truck, towing, and tool products; seasonal products, including lawn and garden items, power equipment, gifts, and toys; maintenance products for agricultural and rural use; and work/recreational clothing and footwear.

As you all know, it has been a trying range bound market for months now. YSL 5 suffered from the general market and some nasty stocks downgrades. While we hope the market will turn positive and this list will be our best ever, until the Euro War settles, this is a day to day market and it’s foolish to think otherwise.

Next HGSI Webinar Tuesday Dec 6:

Dr Jeffrey Scott and HGSI user is back to present his refresher in HGSI software and, as importantly, share what he is up to in these challenging markets. Jeffrey always puts a new spin on each Webinar presentation so we encourage new and veteran users to come back for more. And he will provide his usual audience pleasing demonstration of how he is currently managing his own stock portfolio by building nightly watch lists.

You can register for this Free Live Webinar at: www2.gotomeeting.com/register/709221386

Disclaimer: No buy sell recommendations are made for any of the listed stocks. At the time of publishing I personally do not own any of these stocks. You buy any of these woofers and lose your house, your truck, or your show set up don’t come whining to me!

OWS Chant

“Banks Got Bailed Out

We Got Sold Out”

Cartoonist – Horsey (Thanks to Paul for heads up on this cartoon)

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“Wall Street Aristocracy Got

$1.2 Trillion in Secret Loans”

To keep us from plunging into depression  in 2008 – the too big to fail “aristocracy” got a whole lot more $$$$ than we thought. –  Bloomberg News – 8/11

Here’s the list of the Fed’s Secret lifelines (near 0% loans) to the Shadow Banks. Bloomberg LINK bigger chart and lots more data

How Much Profit did the Shadows make from

a $1,200,000,000,000 ($1.2 Trillion) Loan???

Who knows?

The too big to fail shadows don’ t even have to have mark to market accounting.

We do know they went out and bought more financial WMD’s or derivatives. The size of this market has reached - $707,568,901,000,000 (this includes $107 trillion in the last 6 months – will bet a lot of these derivities had something to do with Europe)

Growth/profits in the bubble building derivatives market increased almost 18% in the last 6 months Source & Source & Source

“We Got Sold Out”

An Alternative Solution

From Ed Yardeni – Money Magazine.

We have an inventory of @ 3.5 million unsold homes – This negatively impacts the housing price of all of our houses.

“The government could fill 2 million homes by matching the down payment, up to $20,000,  for people who aren’t already home owners. A million more buyers could collect rental income tax free for 10 years… cost at most 40 billion”

Sure there are problems, but it does take massive pressure on housing. What’s $40 billion compared to whatever the opaque nominal value of $707,568,901,000,000 is?

• Norquist & Company are not going to let the aristocracy finace this

• Jealousy over exactly who exactly gets the means based homeowner loan

• It does nothing to fix the opaque WMD financial derivatives market.

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Yankee Bob’s

Part 2

Continued from Sunday night

There are several ways the system aids financial white collar crime.

• Congress may pass laws to win their reelections but they can be toothless.

• A commission to regulate say, speculative futures trading to prevent price manipulation in basic commodities may be in place but if the commission refuses to act or parses the meaning of speculation in a way that is friendly to the speculators,…then the speculators are free to game the prices. Not really hypothetical is it?

• Another way to defang regulations is to simply not fund the enforcement by the various organs. Hence the call of all the GOP candidates to defund or cut back the EPA because who needs clean air or clean water ? Regulations cost corporations money, that’s true. But who honestly believes that the corporations can or will self regulate in the public’s interest?

Well, the GOP does. Pawlenty was outraged when that bridge in Minneapolis collapsed. Oh, months before he had cut funding to the bridge inspectors so the inspection that could have prevented it was delayed..and the bridge fell down before it was inspected.

Even when the government has regulatory powers,corporations thru lobbyists, fight to cut funding for enforcement or to put corporate friendly regulators in place. They barrage the media with advertising money.

How many stories get killed or shoved to minor space because of fear of alienating the sponsor?

We probably graduate more communications majors then social science majors. Who is there to employ them but the corporate interests? There are armies of communication majors out there working overtime to make sure that the interests of the corporations  has a stronger voice then the truth.

They shape the future by distorting the truth.

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“Hopeless,

But Not Serious”

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The whole financial world is again skating on thin ice

• A rising MO 50DMA , what we have now, usually correlates with a bull run. The relatively rapid rise in the MO’s 50DMA (below 0 to +25) is almost always associated with a longer rally

Bankstas At War

European Theatre

Just like the 2008 mortgage debt crisis we have a sovereign debt crisis in Europe. The major question is who is going to end up paying the bill? Will risk be again privatized by banksta’s with their politicians and socialized by the people?

The Big Picture – One reason why the NYT is the world’s most respected newspaper is they come up with outstanding charts and information “A Spectators Guide to the Euro Crisis”

800 LBS Gorilla – Hidden Derivatives Market

The NYT chart shows what happening on the surface. The real picture is full of smoke and mirrors because, just like the 2008 meltdown, the 800 pound gorilla in the room is the opaque, unregulated, derivatives market. Remember – Warren Buffets calls CDS’s (derivatives) “Financial WMD’s.”

Quite simply, once again, who knows what the exposure any major financial company is?  Remember – how interconnected  AIG was? MIT Economist Simon Johnson does.

Do they make a calculator big enough to measure the profits that banksta’s made off the European countries with debt problems in the opaque $500 trillion derivatives market?

Whose going to pay? The too big to fail interconnected (both globally and politically) banksta’s, the bond holders, or the people. The prevailing powers in Europe are now suggesting a 50% haircut for bond holders of Greek debt. (the most pressing problem country)

The austerity measures (raise taxes, fire workers, sell national treasures) imposed on Greece, already with 18% unemployment, would put the country into a long depression and benefit the financial elite who will pickoff Greek assets at fire sale prices. Bankstas war against people by Economist Mark Hudson quantifies this.

We have a broken globalized financial system that benefits a few at the expense of many. Banking used to promote growth, not make hidden bets (CDS’s) on repackaged debt. Profits gets privatized and risk gets socialized.

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Two groups with very different solutions passionately recognize privatizing the gains and socializing the risk is tearing down the financial stability of western democracies.

Poverty creating casino capitalism is being fought by both Libertarians (Ron Paul) and the Occupy Wall Street believers. (the 99%)

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STOCKS

Why the Rally – The perception by major market movers that in Europe the gains is being privatized and the risk socialize. Best measurement of this would be German financial companies- Thought to have largest exposure to European debt. Second best German stock market – Up 1.5% at 8:15 this AM.

• Our #1 forecasting tool MO rose to 91.33. OMG overbought levels. The highest in 3 years. = BEARISH
• Our #2 the PCR rose to 0.96. Shows pro’s who trade Puts and Calls are not very worried = Bullish
• See Strategy section of blog for more on MO & PCR

Reading Tea Leaves

Same as yesterday – Right now the news out of Germany trumps everything – Their financials move higher and so does everything else. Pro’s are bullish (PCR) takes some of the sting off how overbought we are (MO).

Traders - rallies in the AM, should be met by selling in the PM.  Because  like the MO and virtually every oversold/overbought indicator like it is so high.

Investors – Technically we have broken out of this summers trading range – That’s bullish and the long Term Outlook is now CAUTIOUSLY BULLISH. More often than not we retest breakout levels. However, Investors411 is nibbling on the SPX. (Any ETF that tracks this will do) It was chosen because it tracks the S&P 500 and is relatively safe.

JS suggests the SSO and The Critic suggests FAS (although she has a Put/Call play on this.)  Both are good but involve more risk.

Paul tells us there is great risk out there – he’s right. Paul is at a HGSI stock seminar in CA this week.

Bottom Line - The only other time the MO was so high and did NOT see at least a 5% fall in stock prices within a week or two was back in 2009.  Right now the insiders seem to be seeing the same dynamic happening. -

Privatizing Gains and socializing risk works for short term gains – but in the end if you keep putting more and more people in poverty at the expense of a wealthy few the end result is revolution

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Long Term Outlook

3 to 6+ months

CAUTIOUSLY BULLISH*

*Investors411 has 5 different long term 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.

John Boehner

Take No Prisoners

Our political structure has devolved into a take no prisoners style of government.  Compromise has become a dirty word and threats of financial armageddon will soon becoming reality.

Ezra Klein (Bloomberg & Washington Post) has a comprehensive look at John Boehner’s (Republican House leader) demands over the debt ceiling.  This is obviously influenced by the Tea Party’s growing domination of the Republican Party. The Democrat’s too seem only be out to score political points.

Klein’s name is linked to the article and I stronly urge you look at it.

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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	+0.60%	up
NASDQ	+1.01%	up
S&P 500	+0.81%	up
Russell 2000	+1.56%	-

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Technicals, Fundamentals & Analysis

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

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Shorter Term Forecasting Indexes

There are hundreds of forecasting tools, – These two tools have worked

When they stop working Investors411 will use other Indexes

• The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar fell again yesterday -0.17% The dollar has challenged its falling 50 day day moving average/strong resistance level and failed to overcome this barrier for the last three days.  A short term rebound earlier was bullish, but now the bears are regaining some momentum. Long term trend still bearish, but no clear direction exists until the 50 DMA or the old low is broken. (see link to chart) = Neutral
• McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] Mo on   rose to +32.00. We are approaching oversold. Last two highs of between 50 and 45 gives us a day or two(depending on gains) left to the rally. = Neutral

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Dividends

Part 2

The following are the sexy, high octane , high risk dividend plays. The criteria for the selection of all dividend stocks was announced Monday.

Most of the group below are in some was involved in trading derivatives. They may use black box trading techniques and/or be high frequency traders.

Disclaimer - I own the two stocks mentioned below. You might want to own one of their competitors. Do your own research

NLY – Annaly Capital Management. Dividend 13.82% per year last quarter.

What they do – “We are primarily engaged in the business of investing, on a leveraged basis, in mortgage pass-through certificates, CMOs and other mortgage-backed securities representing interests in or obligations backed by pools of mortgage loans issued or guaranteed by Freddie Mac, Fannie Mae and Ginnie Mae.”

NLY, I believe, is the biggest firm of this group. Market cap = 14.4 billion. Others competitors and similar high yield dividend plays are smaller.  JS points out in the comments section that NLY is a favorite stock of Jim Cramer.  The dividend for the stock 0.60 per share 8 quarters ago and reached a high of .75 six quarters ago and  the latest quarter was .62.

AGNC – American Capital Agency. Dividend 18.78% per year last quarter

AGNY is a 3 year old company. Market cap $1.9 billion.  It rose to a hight of $1.50 dollar per share dividend  two years ago and has had what seems like a too good to be true steady 1.40 dollars per share dividend for the last 7 quarters.

Competition – You may find the following companies more desirable after you do the research.  HTS, MFA, IVR, CYS (the last has the highest dividend payout) There are others in this group.

Reasons for holding – The government has weak regulations on the derivative markets and it does not look like any changes are coming in the future.  These are risky plays and NLY is now trading at 18, but did reach a low of @ 11 in 2006 and 2009. (See link to chart) From late June of 2008 to late May of 2009 the dividend of NLY was a relative steady 0.50 to 0.55%. So NLY during the financial meltdown had a steady return.

More on dividend stocks ASAP – Next the anchors – or the dividend stocks you may hold through tick and thin.

Caution – all dividend stocks are vulnerable to run away inflation.

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Positions

Reading The Tea Leaves – MO has been an amazing accurate forecasting tool for the past year.  It saying we are getting near a technical top (See above)

Disclosure - I have personal ETF positions in REMX and manage a fund that has a 5+ year position in GLD. I also own NLY and AGNC mentioned above

• REMX is going to take a hit today. The #4 stock in its portfolio MCP had a bad earnings report and was down 12% in after hours trading. This will probably drag REMX down below its 50DMA. I will lighten my position here (at a loss) if there is no rebound by the end of the day.

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Check out the advice, recommendations, analysis by bloggers on stocks,politics and trends in the comments section of the blog  Many of the best concepts regarding YOUR Financial Future are discussed their. Watch for Paul’s Corner every Tuesday and Thursday

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Longer Term Outlook

CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Dawn over Newton MA

Obama’s Prime Time on BP

Preview here. Major American oil companies & BP will be in front of congress today. The Bottom Line for me is – the transformation to alternative fuels. This is the golden opportunity to make a giant leap forward to alternative energy solutions.

Chaos and lies has surrounded BP (the free market’s) response to this oil spill. Government from the past and present administration has bought BP line for way too long and was caught with its pants down by its ankles. The right wing’s solution is to scream & their drill baby drill mantra.

Perhaps today in front of congress and with Obama there will be the DAWN of some different solutions.

Wonder if oil executives will make the same mistake and arrive in big private jets like the car executives did? Will they get called on it?

Dawn of Financial Reform

The NYT Business section lead story the Volker Reform section of financial reform looks like it will pass! –

“Bankers have all but given up on defeating …would effectively bar federally insured banks from trading for their own accounts”

What this means is that YOUR FDIC insured deposits would NOT be used socialize the risk of banks trading opaque, over leveraged derivatives. Gee instead they might even loan that money to buisnesses and home buyers.

Current war – Blanche Lincoln’s Derivatives reform. See above link. Better email your congressperson or Senator and tell him/her you support Linclon’s bill.

Why Afghanistan?

The Pentagon, yesterday released the reason we  and should continue in Afghanistan, They have perhaps a trillion dollars of minerals. The Iraq war was fought over oil and now the loosing effort in Afghanistan needed an excuse to continue. China could get those minerals instead of us. What happened to terrorism and why is it the war machine – the Pentagon –  doing a report on minerals now?

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	-0.20%	flat
NASDQ	-0.02%	up
S&P 500	-0.18%	up
Russell 2000	+0.50%	-

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

The benchmark S&P 500 fought its to its 200 day moving average/resistance level. Got their in the morning and spent the rest of the day in retreat. = Bearish

One significant data point that investors/traders should remember – Currency markets>Bond Markets>Stock markets. Translation = Because currencies and bonds are so much larger than stock markets they are the DOG that influences how the TAIL (stocks) wags.

With the NYSE up +75 points at it high yesterday – Interday the MO easily reached the +60 or overbought territory. This over bought position added strength to the resistance level and hurt the bulls yesterday. = Bearish

Looks like we may see some teeth in financial reform. Long term Bullish but short term = Bearish

An investment agency downgraded Greek debt in the PM yesterday, but the Euro held onto a significant move higher. In past, this would have sent the Euro tumbling. Sometimes there is a delayed reaction, but for now & for stocks = BULLISH

The Baltic Dry Index BDI has dropped well over 20% of its value in the last month+. Since the BDI measures shipping rates this fall is NOT good for world trade, economics. For stocks = Bearish

Futures up this AM = Bullish

Significant Indexes

• McClellan Oscillator rose to +50.26 [+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. Considering the volatility of the MO this is about as close as you can come without being overbought. = moderately bearish
• US Dollar –  The dollar fell a significant -0.77% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. The dollar was @ -1.4% lower in the AM and rose throughout the afternoon.

Reading the Tea Leaves -

A lot of reasons to be bearish this AM. But almost all of Wall Street’s eyes are focused on what’s happening to the EURO. FXE is the ETF that tracks the Euro and it was up +1.09% yesterday despite a downgrade of European debt. There’s a lot of reasons – see red bearish signals above, but if the EURO is going to continue to go up so will stocks.

FXE is the ETF to watch along with Spain’s (EWP underperformed yesterday)

Another charge at the resistance levels for stocks seems likely. Remember, each failed charge weakens the attacking force.

Positions

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

With the DOW up 113 points at it high yesterday – Interday the MO probably reached the 60 or overbought territory. This over bought position probably hurt the bulls yesterday. = Bearish

Traders - YOUR stock List from 2/6 & from 9/6 a list of stocks that were outperforming and “worth a trade.”

• VCI – broke out to new high
• SNDK – broke out to new high
• SAM – broke out to new high
• BIDU – @4-6% rally
• ESRX (not on list but position Investors411 held) – broke out to new high

No one ever went broke taking profits. My best read of the tea leaves is to sell 1/2 into today’s rally (let the rest ride and hope it turns into long term gains)

Of course the ultra long ETF’s often mentioned (UWM, THY) have have done as well in the mini rally of the last three trading sessions.

Dumping 1/2 of UUP for small loss.

The bottom line is will the EURO continue to improve?

From Yesterday – Change in outlook – This is tentative . Upgrading to NEUTRAL. Technically, this looks justified, but frankly, fundamentally I sure don’t see the light at the end of the tunnel.” – It was premature. Major indexes bounced off their 200 day moving averages and retreated in heavier volume. Not the technical breakout we were hoping for. Let’s wait till the resistance level actually falls to change the outlook. Maybe today Therefore, a return to CAUTIOUSLY BEARISH.

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Goldman CEO Lloyd Blankfein in front of congress

A Second Global Meltdown?

“Clearly the World Needs More Regulation” - Lloyd Blankfein CEO of Goldman Sachs

Well, its at least gratifying to see Blankfein join former Feed Chair Greenspan in the realization that Capitalism can’t regulate itself. Goldman’s CEO and executives testified in front of congress yesterday. Meanwhile across the pond Greek derivative debt crisis was expanding. (See more analysis under KISS Stocks – TF&A below)

Goldman’s is taking it on the PR chin from the clowns in congress who deregulated the financial industry. The Democrats have a weak financial reform bill and are getting pressured by everyone from Republicans to Warren Buffett (see yesterday’s Investors411) to water it down.

You add the Greek derivative meltdown, & the fact that this is likely to spread to most of the countries that bought into the over leveraged unregulated American capitalist system = a possibility of a second meltdown. Countries facing same kind of unresolved problems include PIIGS – Portugal, Ireland, Italy, Greece & Spain, plus most former Russian satellite countries.  That would be one massive default if it comes to fruition.

Look at what it took to bail out the USA and the world from the first meltdown.  Remember fear spreads about twice as fast as greed according to behavioral economics.

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	-1.90%	up
NASDQ	-2.04%	up
S&P 500	-2.34%	up
Russell 2000	-2.38%	-

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Big time toasting in big time volume for stocks across the board. All major indexes moved @ 1/2 way back toward their 50 Day Moving Averages (see charts on right side of blog for 50DMA)

Financial Pandemic is spreading.  This is centered on Greek debt and seems to be spreading to the PIIGS (Portugal Ireland, Italy, Greece & Spain) The whole world will be impacted if it gets out of hand.  Last week Investors411 expected this crisis to explode. The call was just a bit premature. How this is going to impact markets and the world from CNBC & NYT & Seeking Alpha

The last of the above links also focus on Goldman Sachs which is starting to unravel some more in front of congress. Title of this editorial should give investors pause  - As Scary as it Seems, Greek Debt Crisis Won’t Spawn Second Global Meltdown His stock solution for investors is buy if Greece defaults – But what if all the PIIGS & all the former Russian satellite countries also default? = A Second Global meltdown!?

Fed announcement on interest rates today at 2:15 EST -Will they in some nuanced way change the language of their statement on interest rates? Best read of tea leaves NO = Bullish Will this make us forget the problems across the pond or our own mess – NO = Bearish

Best read of tea leaves - Yesterday’ stock drop was a bit of a short term over reaction to a much more serious long term problem. For US & markets markets outside Europe the key technical indicator is the dollar (% other currencies outside Europe) keeps going up our goods will cost more to exports and profits will shrink.

All of this is in directly and indirectly related to Goldman Sachs.

• Directly – GS is involved in trading derivatives on Greek debt
• The whole issue of transparency & corruption evolved from American shadow banks and is a huge factor in Greece and the USA’s fiscal viability.

Significant Indexes

• McClellan Oscillator fell dramatically to  -33.55 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is  NEUTRAL territory, but we are approaching oversold.
• US Dollar – had the largest gain of the year (maybe #2 -I’m eyeballing a chart) +0.93% yesterday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules. Is very important. Remember, dollar down almost always = stocks up and visa versa. Bottom Line – Dollar gain was HUGE and we are now just below breakout levels for a new yearly high. If this breakout level falls and the dollar soars stocks will take it on the chin.

Positions

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

Check the Positions section for changes in longer term trades. As mentioned yesterday TEVA had broken support so was sold.

Investors 411 is still long IMAX, EWZ, ESRX & CNK

Investors – Be Happy – If we get a meltdown and the McClellan reaches oversold – its time to buy again.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Trust Buster president Teddy Roosevelt – Will Obama show us the same tonight?

Tea Party

“The tea party’s exaggerated importance” is the headline of the  major independent blog editorial blog Politico’s this AM on the “anti Obama rage group” .

Mea Culpa – I do respect the Tea Party because at Investor411 they have won. By focusing attention on their white (in the words of the old Ivory Snow commercial this group is 99 44/100% white)  rage I have taken it away time from facts on the deficit or Health Care.

The NYT’s lead editorial yesterday was on Massachusetts heath care system “which 1/2 of Scott Brown supporters and 2/3 of all Massachusetts residents like.”(paraphrase) according to a poll. 97% of MA residents are covered. For more see “Reform and Massachusetts.”

BRIC

The Economist has a  has an in depth look at the top emerging markets as a real alternative economic force to the European Union & America.  BRIC = Brazil, Russia, India, China whose leaders are or just finished meeting together in Brazil.  “The Trillion Dollar Club”

The Obama Speech

Tonight’s speech on financial reform is a defining moment. Will Obama be the next Teddy Roosevelt ? (A Republican Trust buster) The short answer is NO. Senate Democrat Ted Kaufman (Dem. DE) is our Teddy Roosevelt – Here’s part 2 of his speech on Wall Street and the Rule of Law

One piece of encouraging news is Senator Blanche Lincoln (Dem  AK) committee has a Republican onboard (Grassly- R IA) for her legislation on derivatives. Lincoln has come up with a stronger bill than other proposals.

NYTs headlines Obama Issues Sharp Call for Reforms on Wall Street If this is true you’ll see a 2 to 5% decline in shadow banks tomorrow. It Teddy Roosevelt or Ted Kaufman gave the speech you’ll see a 5 to 10%+ fall in shadow financials tomorrow.

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	+0.07%	up
NASDQ	+0.17%	up
S&P 500	-0.10%	up
Russell 2000	+0.64%	-

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Market went nowhere yesterday in increased above average volume. What Wall Street calls “churning.” Usually considered a reversal of trend = Bearish

Yesterday’s grand slam earnings reports by giants APPL & BAC (thank you taxpayer bailout, Fed 0% loans, & elimination of mark to market accounting) did little to move markets higher. US markets have reacted poorly to great news indicates  = Bearish

Seeking Alpha this AM has a big section on the problems  China has. Here’s one article . Investors411 has closed its entire China position (FXI).

Earnings reports continue to pour in.

Significant Indexes

• McClellan Oscillator rose slightly to -4.91 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. - This is almost right in the middle of NEUTRAL territory
• US Dollar – rose +0.19% yesterday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules Is very important. Remember, dollar down almost always = stocks up and visa versa. The positive earnings reports are overshadowing the dollar which is in the middle of a consolidating range between @$80.00 & @$82.20. Dollar at 81.18. If it moves to either side of that range it will impact stocks.

Positions

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

Both Comments from The Critic & Paul R were incorporated in the strategy section of the blog. You can see them by linking here or at any time in the future going to the top of the blog and clicking on the word STRATEGY

Caution – I do on occasion day trade. None of this is part of Investors411. Almost all of you are looking for something to hold for a period of time.

When to Buy? – McClellan Index - Only 8 times in the last year did this index reach below -60 = oversold = a time to buy. Even then tow of those tomes were within a few days of each other. Therefore the total was only 6 times. The last time was back in early February. Its frustrating not to buy or sell, but Investors411 is going to wait till we are oversold to commit major amounts of capital.

UWM – [ETF that does 2x what small cap stocks do] UMW is back in the black and at a new high although only up a couple %. Almost closed this position. Going to sell at or near open today.

IMAX – imax hit a new high yesterday in a “pop and drop” (see yesterday’s Investors411) At one point in time it was up almost +9% and end the day at +2.94%. Volume was @ 3x normal.  Some entity perhaps more than one broke Imax out to a new high. All the day and swing traders jumped in after the break out. There was some China news,but this turned out to be not as big as its headline.  Then the dropping or profit taking came as IMAX fell up to 8%.

IMAX has had  some other pumps and dumps over the last few months. Investors411 called this pump and dump yesterday. This kind of trade is only for day/swing traders (not investors) who know what they are doing and can handle the risk. Not a recommend trade by Investors411 Yes I bought some Imax to day trade early yesterday and made a 5% profit on this.

Paul R on comments section recommends VCI,, that’s held onto its breakout from a consolidation period yesterday. Volume not strong,but it has possibilities for longer term investors

Monitor Likes SHOO – more a short term trade because it is too far extended from 50DMA (Day Moving Average – If you do not recognize what 50DMA was you should NOT be trading these stocks!)

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING