19 months ago in his 2010 State of the Union Barak Obama made perhaps his biggest mistake.

He did not focus on  the clear and present danger of jobs growth (which would have lowered the deficit) instead he focused on deficit recuction through cutting programs and raising taxes.

Perhaps he thought the other side would compromise in good faith. Perhaps, as some believe, he’s just a tool for the corporate oligarchy and in the end would make sure the folks who finance elections would get what they want.

On the battlefield General Petraeus in Iraq compromised with the terrorist who had fought Americans and brought them over to the other side = a compromise. But is the USA compromise to conservatives is an abortion – Tea Party Patriots – Don’t compromise.

Thanks to Jim J (for finding) and Erin Clouse (editor of the Brookline TAB for posting) this editorial from which the following points are drawn. The Tea Party and all the Republican candidates have take taken oaths NOT to compromise. The Tea Party -

• - It badmouthed the economy and the government at every opportunity, undermining the confidence of consumers, businesses and investors both here and abroad. And yes, the confidence of credit rating agencies.

• - When President Barack Obama and House Speaker John Boehner got close to making a deal for $4 trillion over 10 years, the tea party caucus yanked Boehner’s chain, and he pulled out of the talks. The grand bargain was dead.

• - Tea partiers spread the myth that a default wouldn’t be so bad, further feeding the perception that a powerful political bloc couldn’t be trusted to be responsible with the nation’s finances.

• - The tea party drove the debate — its leaders say so with pride and most pundits agree — to an unsatisfactory and unpopular conclusion: the debt ceiling reluctantly lifted, a last-minute deal nobody likes, a scant $1 trillion in deficit reduction, no reforms to taxes or entitlements, a disgraced and dysfunctional Congress, and a December date for another battle over the same turf.

As most of you realize, progressive are almost always willing to compromise – to look for a win win situation, but a conservative shoots first and asks questions later. Their world is black and white, heaven and hell, you’re either with us or against us and best your either a patriot or the enemy.

Click on picture below for enlargement  of latest (no compromise) brown shirted Republican to enter race

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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

Shorter Term Outlook.

day/days/week

Gert Frobe from James Bond movie Goldfinger

Over the last two weeks almost every serious investor learned about gold or GLD. Two of the three legged stool that hold up the world economy wobbled over the last two weeks and investors rushed in fear to the shiny sparkle of gold.

The Three Legs

• USA – Total incompetence in congress. The far rights  strident refusal to compromise has set off warning bells from the stock market to Standard and Poors. Every European solution has included a tax cut on the wealthy, but NOT the USA which is dominated by Tea party Ideologues. Consumer confidence in the USA is near an all time low while retail sales is still blissfully chugging along. See chart below show a massive disconnect.

• Never forger our mantra – High Frequency Traders Rule US Equities – These entities make their decision in microseconds and not on long term trends.

• The McClellan Oscillator (MO) fell to-8.20 (-30 somewhat oversold, -60 oversold, -90 OMG oversold). Chart shows we are almost dead center in the middle of oversold and overbought territory. There’s wiggle room for stocks to move either way = Neutral

• Reading The Tea Leaves - Stocks are moving on headlines and that move is exaggerated by all the HFT trading.

From Friday’s Bottom Line - Technically because of the retest of the low and strong momentum higher HFT’s will take markets higher.  Headlines still rule and HFT traders can react instantly and with great volume to headlines.

Investors411 has been on a hot streak with daily calls and let’s see if we can make it 4 in a row  - Momentum carries markets higher today. It’s been relatively easy to get out of massively oversold territory, as we get more and more overbought the going for the HFT’s will get tougher and tougher.

Longer Term Outlook

weeks, month, months

• Repeat - May 20th forecast still stands. The recent Washington debt crisis debacle has focused everyone on cutting the money supply.  Simple math – The less money that’s out there = less jobs = greater chance the “Great Recession” returns. European debt and emerging market’s inflation fears add to this. As predicted the 15+ % drop has come to pass this summer Best read of tea leaves is a 1 in 3 chance for a bear market (20% drop from highs)

• Long Term Outlook Listed Below. Major long term trend (monthly) lines that have been broken. LINK. However, we are close to climbing back to NEUTRAL (see 50 day moving average on monthly chart), The Fed has promised long term low long term interest fates till 2013, and that’s significant for US economy. If the Fed does some type of QE #3 – this could also get us back to CAUTIOUSLY BULLISH LINK

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Look for Paul’s Corner every Tuesday and Thursday

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Current Positions

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

YOUR Stock List #5 is done and except for some last minute tweaking and waiting for an earnings report. It will be published on Thursday in Paul’s Corner.

NB – With the exception of NLY & GLD (both profitable and remember NLY’s 3 to 4% dividend) Investors411 held no long positions for most of the summer and especially August.

NLY - Annaly Capital Mgt. Ultra high dividend stock – It’s been shaky, but so far NLY has held up reasonably well through current stock market slide. NLY is the only position in Investors411 hypothetical portfolio

I still have a Put position to protect NLY. (strike price $17.00 for 3rd Friday in Sept) Also puts on other dividend stocks.

GLD – (Long Gold ETF) Obviously a MAJOR mistake to sell and take meager +3% profits. Like a millions of other people who see worldwide economic problems ahead – waiting to buy another diptobuy. Also sure looks like GLD had its climax run and could be settling. We’ve had a two day dip and will buy if day 3 of a dip occurs.

Disclaimer - Personally I own  a group of dividend stocks including NLY, SNH, KMP, MO, HTD, T, ABV & AGNC and a few other smaller positions I have puts on most of dividend stocks I own. I buy everything in the hypothetical Investors411 portfolio. I also own some (about 80% of thisposition has been sold) SDS & TZA (ETF’s that double and triple short the market) as hedges.

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Long Term Outlook (for US Economy)

BEARISH

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Long Term Outlook (for US stocks)

CAUTIOUSLY BEARISH*

*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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

Bush/Obama holding hands with world’s richest totalitarian

Totalitarianism

Egypt - Day 16

Latest from Egypt

• Mubarak’s Minister  says – Violence if protestors don’t back off. & NYT
• Striking workers join protestors
• The Information Wars is topic of Al Jazeera’s monthly show tomorrow in NYC at Columbia 2:45 EST.
• Remembering – web site devoted to Photos of young  killed by dictator

There are a whole string of mostly American back dictators backing the inhumane Mubarak. Remember Saudi Arabia where most of the 911 hijackers come from?

This oil rich totalitarian regime along with our American media and governments collaborate to keep what happens in their totalitarian regime from YOU. Not Investors411. Let’s present the reality of Mubarak’s biggest backer and Bush/Obama’s biggest hand holders -

How the Saudi’s treat

• Jews – They send out text books across the world depicting Jew’s as monkey’s and pigs.
• Journalists - For criticizing an electric company a journalist was given 50 lashes in front of the company and put in jail for 6 months.
• Women – For going unaccompanied with a man to a building a women was given 300 lashes and a one year jail term

The above facts are from Human Right’s Watch founder Robert Bernstein video [source - Bloomberg's Taking Stock show with Henry Pimm - Paul's favorite financial network]

We sell $60 billion worth of weapons to the Saudi’s from our military industrial complex yet almost No Americans have ever heard of Cyber Dissidents.org who fight for freedom and justice in a gulag of dictatorships.

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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

• Flat to moderate declines in weak volume.
• Short term over bought US indexes took an out of breath break yesterday.
• Mantra till it no longer works - still endorsing the concept that the Fed POMO [schedule] is and will be the key factor in keeping a long term rally going. .
• Mantra #2 – 50% to 70% of the volume on US stock exchange is soaked up by High Frequency Trades ‘s chasing imbalances in trades. This means 30% to 50% of volume is made up or real or valuation investors.
• Major fundamental causes for Wall Street concern at the moment – Inflation in emerging markets, European debt, will the Suez canal stay open.
• Another Bearish forecast – “Yield Curve” is steepest ever – difference between rates of 2 (so low) & 10 (rising, but down 2.23% yesterday)year treasury bonds.

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Significant Shorter Term Forecasting Indexes

• The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar fell  yesterday  -0.46%. Looks like dollar bears may be back and for stocks that’s = Bullish
• McClellan Index – (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Fell to to +10.38. Over the last three months the new parameters seems to be +/- 30 as an overbought/oversold level.  Stocks outlook = Neutral

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Reading The Tea Leaves

Same mantra - A manipulated US stock market is moving higher on stimulus, low interest rates and quantitative easing. Financials and stocks have received unbelievable support from our government and the Fed to pay off their over leveraged debt.

Photo - Helicopter Ben Bernanke - Dishing out a Tsunami of liquidity to US economy

Major emerging markets are in a meltdown. A correction of 5% to 10% has turned into a 10% to 20+% meltdown. Inflation is the enemy. China, Brazil and India all had about a 2% drop yesterday.

From yesterday - Gold, and commodities may work as a hedge on inflation, but when it comes to the USA,  going short equities provides much more protection.

Falling dollar – The other major factor keeping US stocks in rally mode is the falling dollar.

Bottom Line –

• Short term – too many up days in a row. Minor correction due
• Longer term – Fed liquidity tsunami is having a negative impact on the rest of the world, but keeping US afloat. Problem s what happens when the liquidity dries up? But when is uncertain (QE #2 goes to June) and if economic news is bad will there be a QE#3.

What to watch today

UUP - (Tracking ETF for dollar)  See $USD above for more. Dollar may be turning back down. From yesterday -When after a short rally a stock/sector index opens and closes at same price it often indicates a reversal. We’ve had a significant reversal down. Today will confirm/or not, that reversal

Remember - The dollar is a contrarian indicator. Bad dollar = good stocks

AAPL –  The tech general broke out to a new high in moderately higher volume. Up 4 days in a row.

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Positions

UCO -(2x oil prices)  On dips. Wait till it consolidates lower  and returns to pre Egypt crisis levels or below.

REMX (Rare Earth ETF) – Really believe this a good long term holding. Considering buying more on a dip.

DGP – (ETF is 2X gold) .

DBC – (Commodities ETF) For a more complete list of commodity ETF’s see POSITIONS listed at top of blog  DBC is tilted to energy. Perhaps preferable or a good alternative would be *DJP that is more agriculture and metals.

*RJA (Agriculture commodities Index)An  ETN, not an ETF.

UWM (2x small cap stocks) – Have set stop/loss for last 1/2 at 40.02 -the price it was bought for.

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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 (at top of page) for lists of potential stocks & ETF’s including “YOUR Stock List.” (YSL#4 is under construction.)

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Inflation

It’s no secret, almost every country out there is seeking some advantage to manipulate their way out of the economic “Great Recession” or keep their economy growing at a rapid rate (emerging market countries)

Part of what our Fed does with its quantitative easing puts pressure on China and other emerging market countries that results in inflation abroad. There are inflation fears in USA, but it is emerging markets are really feeling the brunt of INFLATION as they have recovered far faster than either the USA or Europe.

Three major articles on this today. It is a problem for all emerging market countries.

• Nobel Prize winner Paul Krugman – China goes to Nixon
• Seeking Alpha’s John Nyaradi - Inflation fears Spreading Through Global Markets
• In a pot calling the kettle black article & why only 3? Sam Willford – US Names Three currency manipulators

Emerging Markets have fallen for about a week on inflation fears. This has also impacted commodities.

Bottom line for Investors – Not only are we overbought (Long term up 7 weeks in a row) but there is a new fundamental – fear of inflation that could take a bite out of emerging markets and commodity prices. Our Fed is walking a tight rope. So far skillfully. But the wind is picking up.

Our turn will come, but the clear and present danger in the USA remains Jobs, Jobs, Jobs.

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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

• We had what many stock pros call a “confirmation day” The day after 3 of the 4 major indexes took a hit, they DECLINED further = confirmation. More often than not this spells trouble, especially after reaching a top.
• One of the primer analyst who technically called the the S&P top in 2007 (It plunged 57% starting in Oct. 2007) Tom DeMark, has made  another bearish call that market will plunge about 11% stating in a week or two.
• In opposition to all this is the FED’s POMO. Notice that directly after the Fed purchased bonds from its 21 big banks at 10:15AM EST to 11.00 AM the US markets started to rally from inter day lows and moved higher.  Strong correlation between this liquidity coming into markets and stocks moving higher since it began in 2009.
• This is an Options expiration day – third Friday of the month. This sometimes makes for unusual activity and increased volume. However since we have had a short term reversal of trend some of the calls will not get made and volume will suffer. Translation expiration day will probably not have big impact. Other forces might.
• Key factor of day – Inflation fears

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Reading The Tea Leaves

Too many fundamental worries out there. Therefore, going to wait for better conditions or a lower MO to buy.

Will inflation fears trump the Fed’s money dumping and hurt US equities? It has this week. Most say we are long overdo for a correction and DeMark’s call (see above) is significant. Many US companies  that sell to emerging markets could and have been a monentum play to the upside could end up the same way cloud computing did, (See FFIV yesterday)

It’s an escalator going up, but a elevator going down & right now for US equities we have the Fed manipulating to ease the pain.

What to watch today

Dow Index – Almost all sectors that may be negatively impacted from Emerging market inflation – high growth stocks, commodities, China, gold – have faltered this week. The big holdout is this minor meltdown are the giant Dow companies.

AAPL – breaking below its 50 Day Moving Average would be trouble. It fell 1.82% yesterday & rising 50DMA is about 3% lower

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Positions

• UWM - (2x small cap stocks) A 1/2 position. Setting 2% trailing stop today. Considering selling into a rally.
• REMX - (rare earth metals) Sold 1/2 at 23.23 for a 1+% loss. Setting 2% trailing stop loss today

Look for short term a rebound today.

Under consideration – Not touching anything new

UCO -(2x oil prices) All commodities, including gold are under pressure from inflation worries in emerging markets.

REMX (Rare Earth ETF) –  Rare commodity used in everything from some TV’s to hybrid cars.

UYG (ETF that does 2x Dow financials) XLF is the financial ETF. - Shadow banks have numerous advantages. – Opaque, special help from Fed and your still on the bottom line to bailout too big to fail institutions.  This sector is being manipulated higher by Fed. Those that can overcome ethic problems with shadow banks could consider buying. Yes, this is another bubble building.

DGP – (ETF is 2X gold)

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How to look up comments from the last two weeks.

Click on SUBSCRIBE TO RSS (top right of blog) You will see a list with title and short summary of the last two weeks of blogs. Click on title and up will come that day’s blog and the comments associated with it. Scroll down to comments

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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)

Happy New Year

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The Monster in the Room

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Investors411 believes in Transparency.

If there’s a monster in the room I want YOU to know about it. Governments, Big Business,the ruling Plutocracy, & others try to hide their actions supposedly in your interests. That, of course, is crap. They all want more power/money, usually at the expense of democracy and and your wallets.

So lets continue the Predictions for 2011 by looking at the three major economic blocks and some monsters

• European Union - They bought into the American over leverage crony capitalism and got smacked.  Germany is the gem with an unemployment rate of 7.5%, an exporting based economy, universal health care, and a GDP  better than ours. Ireland, Greece, Portugal, Spain and Italy are the weak links (monsters) in the European Union.  Predictions – Either they all become more like the Germans or some of these countries will leave the European Union. That means huge belt tightening in the weak links – Lots of bumps in the road in 2011 as the debt problems of weaker countries are worked out.
• Emerging Markets – For the most part they did NOT buy into our crony capitlalism. They’re also reaping the benefits of the mega trend of globalization –  booming job growth & GDP’s. The monster here is the problem of heating up too fast and growing too rapidly. There is also corruption and in some cases governments that are far less democratic.  Predictions – The bigger countries know how to play economic hardball. Their GDP is over 3 times ours. Those countries with an abundance of  limited natural resources will do better economically than others.
• USA - Our over leveraged, opaque, crony capitalism created the world wide “Great Recession.” In the early 2000′s we went to war, cut taxes and exploded our debt. We dug a hole. Our unemployment rate is 9.8%. Globalization & politics have created a systemic problem of jobs being outsourced and now consumers abroad are becoming more & more  important to American companies growth. We have tried to fix the problem with stimulus, quantitative easing, and bailouts OUR monster is in the fact that we run an opaque capitalism. Our real GDP is in shambles if you eliminate stimulus, quantitative easing and other factors. Predictions - It looks like we can keep blowing smoke (opaque capitalism) through at least the first 1/2 of 2011.

MIT’s Simon Johnson sums up the situation and future as follows -

“Our leading bankers looted the state, plunged the world into deep recession, and cost us 8 million jobs.  And now many of them stand by with sharpened knives and enhanced bonuses – also most willing to suggest how the salaries and jobs of others can be further cut.  Think about the morality of that one.”

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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
• PMI, Home sales and weekly jobless figures all came in better than expected yesterday. Perhaps the reason stocks went nowhere is  because there was no POMO buying by the Fed.
• Big cap tech stocks are looking bullish. AAPL & CSCO have moved higher and have weak volume declines in last two days. IBM is on verge of breakout.
• Some details on today’s major events impacting markets from Seeking Alpha.

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Reading The Tea Leaves

A most indecisive week as many major institutional traders/investors are on vacation.

ICI (Investment Company Institute) measures the flow of money in/out of mutual funds.  After 33 weeks of funds flowing out of mutual funds the last couple have sen some inflow A week or two is not a trend, but the turn is= Bullish

Investors411 mantra – The reason stocks went up while money was flowing out of mutual funds was the FED’s quantitative easing boosting stocks. So we could see a money supply surprise for early January.

• The FED POMO program continues through April
• New year bonuses get invested
• Some folks are getting back into the markets

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

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Positions

• #1 UWM - (2x small cap stocks ETF) – 1/2 position
• #2 UWM
• EUO - (double short the EURO currency) sold all at 20.51 for -1% loss
• UCO – (double long oil) sold all at 20.18 for -1% loss
• 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) Oil prices got over extended and a short term reversal is to be expected. The chart is bullish (series of 3 higher highs and positive slope to 20DMA) over Over the last six months each correction or consolidation seems to have been for about 10 days.

REMX (Rare Earth ETF) – Way too hot to buy now. Like a zillion investors who missed this initial jump we are waiting for a pullback. The story here is compelling. There’s a limited supply of this material and high demand. It takes 7 to 19 years to get a new mine up and running and China has almost a lock on existing supplies

EWZ (Brazil) & LBJ ( 3x Latin America – majority Brazil) Obviously the later is more risky. Both made significant moves higher in last few days. Probably due to move in rare earth metals and the fact that Brazil is rich in other needed natural resources.

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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)

Note – I have changed a lot of the Chart links to include the 17 Day Moving Average. (green line)

Oct 14th Investors411 Photo

Baby Bull Grows UP

Investors411 called this rally over a month ago

Lead by Emerging Market countries which broke out to new yearly highs  months ago,  US stocks , with the help of a falling dollar, TARP loans, stimulus money and quantitative easing (parts 1 &2) have developed the rally.  The major US indexes are within a few percentage point of reaching yearly highs.

Volume, which has long been AWOL in stocks has returned for the last two days. Not overwhelming volume, but enough to be encouraged.

Basically, Investors worldwide are starting to believe the globalized economic trends that existed previous to the 2008 meltdown are back in play. The US has moved higher like it did after the meltdown on cash injected into the economy. The Fed Chair Bernanke has promised more (See past blogs on QE 2)

Our baby bull has grown  up.

Foreclosures, Bubbles & Problems

Major Shadow Banks were down @ 4 to 5% yesterday on new foreclosure problems.

Once again, if you leave these crooks liars frauds unregulated and create no limiting laws they will screw YOU to the wall.  Now thousands of lawsuits are going to be brought by AG’s from 50 states because of an improper foreclosure system.

Yankee Bob says it best in the comments section “They are acting in their own selfish interests against the good of the public and they are profiting well from it.”

Obviously, we haven’t fixed the problems that caused the 2008 meltdown. If you think shadow financial culture has changed – there’s a bridge in Brooklyn I have for sale.

Compared with all the first world countries, we break more economic bubbles, have an enormously higher crime rate, are far more innovative, and provide far less for the public good.

American’s are in the NOW. We have become a nation of what can you do for me. Our former greatness was in the words of visionary President John F. Kennedy – “Ask not what your contry can do for you, but what you could do for your country.” That vision that inspired America to greatness and unity has changed.

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Note – Will post some comments on stock bubbles today

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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 -

Volume is returning to US markets. Not massive amounts but, the last two days have seen a clear increase – Bullish sign.

US markets rose into the close. Sure Looks like some entities got word of outstanding MSFT & AMD earnings results

Shadow Banks – Many of the major shadow banks took big hits yesterday on the foreclosure mess. BAC (Bank of America) down -5.19%. Yet overall stocks held up well. Another bullish sign.

However,  if Shadow Banks fall again today, that would be confirmation of yesterday fall.

• Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar fell -o.55% yesterday. The inverse correlation is not always perfect. But yesterdays fall gives bull more amo for today.  Overall trend of falling dollar trend for US stocks is = Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Rose  +0.76% yesterday An 8 week bull run, then a two week fall. A very slight stutter and now moving up. Trend  = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Fell to +15.56. Momentum is with the stock bulls but location= NEUTRAL

Reading Tea Leaves.

Lots of room (MO)and reasons (BDI, USD, Earnings Reports, volume) to move higher.

Interesting that only a slight decline sent the MO down further than a previous day’s rally sending it higher.

“Overall – the same bullish pattern dominates.” Mantra foe week

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)
• USO (price of oil/commodity).
• SSO (2x what S&P does)
• TYH (3x tech stocks)

The obvious strategy with SSO & TYH is that in a bull run they are going to clobber the benchmark S&P 500.

On dips feel comfortable adding of the ETF’s in POSITION section. Also adding to SSO & TYH.

It would take probably a massive 400 point move in Dow today to reach overbought levels. Highly highly unlikely.

Check out Paul R’s always enlightening updates on individual stocks and sectors in the comments sections.

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Bada Bing, Bada Bang, Bada Boom!

YOUR Stock List gained +14.4% vs. a gain of +1.5% for the benchmark S&P 500. Just like YOUR first stock list earlier this year we crushed our benchmark index over the last 6+ weeks. (more below)

Fear Mongering/Globalization/Jobs

The biggest plate of warm turds being fear mongered to the US public through the Tea Party and like minded folks is that if we don’t extend tax cuts on the ruling oligarchy job growth will suffer.

Investors411 readers already know that jobs are being outsourced abroad through “scaling”.

Now, lets take a look at some figures from when we had the massive tax cut to the rich in 2000 to today. Figures are from the Financial Times and if you would like a video presentation check out Cenk Uyger’s presentation (sorry short add before 4 minute presentations)

1. $1.3 trillion in tax cuts for the rich since 2000.(not compounded) Result – we loose 7.3 million jobs.
2. 1950 to 1990 we have 3.5 to 7.4% real growth Compare - 2000 to now 1% real growth.
3. 1950 to 1990 investment in equipment & software 5.7% to 9.9% Compare – 2000 to now 1.9%

So where did all that money go?

1. Emerging markets grew 120% Compare to -6% for the USA (FSCI emerging market stock index)
2. US investment abroad in 2000 $1.3 trillion Compare to now $3.2 trillion

This means that the our weathy oligarchy spent $1.9 trillion (much more than just their $1.3 tax cut dollars) in creating jobs jobs jobs in China India and throughout the globalized economy.

Add to this figure Shadow banks money going abroad, TARP money going abroad, and US corporations building and investing abroad.  The American working class is getting crushed by our corporate oligarchy.

Postscript – If you like you can officially call me a hypocrite. Because for 6 years I’ve been telling anyone who’d listen to invest in emerging markets. If you go to the POSITIONS section at top of blog and click on it. Scroll down and you will find a list of emerging market recommended ETF’s to invest in. We have made money together

My only defense is every major US company is globally connected to some degree. Even smaller companies are at least indirectly connected to globalization.

But the Bottom Line is – Tax those who profit most off globalization and use it to help the US working class who are getting clobbered.

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 – 5 years of beating benchmark S&P 500

Mantra for September - “The Black Box/High Frequency Traders BB/HFT control the majority of trades. Jim Cramer -”BB/HFT make up 80% of trades.”

US Markets

Very Strange – Usually the big rally day (2 days ago) has more volume than the confirmation day that follows. We did basically hold onto the gains so the rally is confirmed. However this and what’s happened in the dollar (see below) are breaking usual patterns.

Bada Bing Bada Bang, Bada Boom

Paul R has computed the results of YOUR Stock List (more info in  POSITION section at top of blog)

“14.4% UP! Your Stock List (based on a dollar weighted index) from 8/3 to the close on 9/20! S&P 500 was up about 1.5% at the same time. PCLN has enjoyed a 48% gain during this time and it skews the return of the whole list a bit, but the dollar weighted chart buys an equal dollar amount of each stock so PCLN doesn’t effect the chart too much.

Here are the actual PERCENTAGE gains of the stock on the list from the 8/3 close to the 9/20 close.

AAPL 8.37
BIDU 7.75
SAM 1.95
UFS 4.39
F -1.59
GMCR 18.70
HMIN 12.60
IMAX 6.57
PCLN 48.91
RADS 25.46
SWKS 17.87
UPS 1.02
VCI -3.81

After yesterdays pop, many of these stocks “may” pause to refresh for a day or two (maybe). When a stock pauses to refresh like this, and takes off again this may give a chance to buy.”

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar, crashed  -1.10% yesterday. It ended the day right above key support level. = Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Fell a -2.51%yesterday.  The BDI does not have the immediate impact that the MO or Dollar does. 7th down day in a row, with rate of fall decreasing. After 8 week bull run trend could be changing to bearish,= Neutral/Bearish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO fell  to +23.67 yesterday.  A huge drop considering how small the fall was on the NYSE. Back just above 50 DMA/ support level which is at 19.03 Trend = NEUTRAL

Reading Tea Leaves

Something’s big is happening. The dollar fell a huge -1.10% and this usually translates into a sizable stock rally. Yet equities went nowhere. We are just above major support for the dollar. Is the inverse relationship between stocks & the dollar breaking down? Is the dollar @ to crash and burn? This answer is above my pay level.

Reality is there a whole lot of major institutions doing a whole lot of market manipulation (hedge funds, central banks, sovereign wealth funds, BB/HFT’s etc.)

One clear pattern/trend developing – We keep bumping up close to +60 on the MO & stocks can’t get beyond this now strong resistance level. It might be that stocks are just too overbought to move higher.

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)

Current Longer Term positions -

• EWS (Singapore)
• USO (price of oil/commodity)
• SSO (2x what S&P does- this ETF is more a trade that may turn into an investment) I have a 3% trailing stop on this trade

If, we get up over +60 on the MO and  the Dow/major indexes rally – that would be a selling or shorting point.

Recommendations -For everyone who uses trailing stops on trades -It may be time to tighten them. If you’ve made profits over the last month, no one ever went broke by cashing some of them in. That’s what the Tea Leaves seem to be saying.

Long Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

The Battle for Castle Bear Skull (See Stocks below)

The New Gunslingers

Today’s Investors411 is using analogies to violence, wars, and brutality because we have all become so brainwashed by it. My mind is totally desensitized to violence because of a lifetime of TV. This weekend’s football & violent TV shows have taken their toll. I watched well over 100 people, killed, brutalized, raped etc.

How desensitized to Violence are You? Short Video presentation on how violence is used to brainwash YOU & get your attention. Thanks to Sherwehe for finding this. Dr George Gerbner is the expert

Economically, here in the USA we have been wounded. But for the US stock market and other Stock Markets throughout the world there are new Gunslingers that control/manipulate stocks. [NB - US economic's is often NOT in synch with stock markets] Their firing high powered machine guns to your singe shot rifle. This is a wealthy worldwide oligarchy of investors.

• The BB/HFT’s (see many past Investors411s)
• Sovereign Wealth Funds – (Think big exporting countries/Oil rich dictatorships)
• Emerging Market Investors – (Perhaps some not as filthy rich as everyone else – a growing upper middle classes along with controling oligarchy)
• Hedge Funds (Depositories for wealthy investors whose top managers can make  $900,000 per hour and get taxed at 15%)
• Central Banks (Not exactly new gunslingers, but most countries try to manipulate their currency lower so their exports cost less abroad)

YOUR Comments

Coming tomorrow is Jim J. list of candidates to invest in. It’s rare, but there were comments over the weekend on Stocks Paul R & The Critic) and Yankee Bob takes on one of the major industry groups that makes up the growing Corpocracy (vs. Democracy) in the USA.

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

Mantra for September - “The Black Box/High Frequency Traders BB/HFT control the majority of trades. Jim Cramer -”BB/HFT make up 80% of trades.”

Term for the Day -Technical Analysis (TA)- From Investopedia

“Technical analysts believe that the historical performance of stocks and markets are indications of future performance.

In a shopping mall, a fundamental analyst would go to each store, study the product that was being sold, and then decide whether to buy it or not. By contrast, a technical analyst would sit on a bench in the mall and watch people go into the stores. Disregarding the intrinsic value of the products in the store, the technical analyst’s decision would be based on the patterns or activity of people going into each store.”

For me TA is looking at charts and finding patterns- Reasons TA works as a forecasting tool tomorrow.

US Markets -

Friday’s was what’s called “options expiration Friday”. Hard to use as a forecast tool because the increased volume is traders covering (buying) options that are coming due the third Friday of the month. We will go over options later this week.  YOU can look it up in Investopedia.com today.

Below is the same chart of the benchmark S&P 500 (SPX) that 10,000+++ technical analysts are showing their clients and 1,000,000+++ traders have already identified. It’s from Stockcharts.com - A free site that Investors411 uses for all its charting data.

To everyone who follows Technical analysis this chart screams today (perhaps this week) is REALLY important.

The SPX is at a triple top. Three times the bulls have charged the bears cave or Castle Bear Skull (my term for wannabe victorious bulls to call the bears resistance level) and twice before the bears have held. Everyone knows the bears are tough at this point. Lots of bets are being placed on the bears or bulls will win. Bears win markets go down and the level @ SPX 1130 becomes a super strong resistance level. Bulls win and its rally on.

The annotations on the above chart were written by John Nyaradi

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar, rose  +0.20% Friday. The dollar broke down below its short term support level, but recovered – Bearish short term (daily) sign for stocks. But, longer term, Falling dollar trend for stocks = Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Fell a -2.23% Friday.  The BDI does not have the immediate impact that the MO or Dollar does. Fifth down day in a row, with rate of fall decreased. After 8 week bull run trend could be changing to bearish, but still= Neutral
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose slightly to +24.97 yesterday. Note – While zero is the center of this chart the 50 DMA is at 19.29 That’s a support level. = NEUTRAL

Reading Tea Leaves

From Friday -If the baby Bull, pictured earlier this week is going to get on its feet, this would be the time to rise…Perhaps Monday will be the key.

Let the battle for Castle Bear Scull begin.

This battle is going to get manipulated by everyone from HFT’s to Hedge Funds (that often are HFT’s)

Lots of bears believe that the bulls are depleted – too many up days have created over bought conditions and the US/Europe economic news is lousy. Oil prices have fallen recently and are near support levels.  The advantage the bulls have is

• Momentum – The rising blue line on chart – That’s the 50 Day Moving Average of Price.
• Many Emerging Markets have already busted out and taken over their castle Bear Skulls.
• The MO has a lot of “wiggle room” to move higher – The MO’s 50 DMA is high and its got 35 points between where it now stands and 60 – overbought territory.

Monday’s are usually the day of the week that bulls make their charge. Ironically, my major concern is too may analysts are thinking/predicting a bull’s victory.

Almost forgot – Watch the dollar – UUP (ETF for Dollar) If it breaks down, bulls have another army of reinforcements.

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)

Current Longer Term positions –  EWS (Singapore) & USO (price of oil/commodity)

Traders- Short term trend is bullish for stocks. If we can get @ a 100 point drop in Dow and you can tolerate risk – you could nibble. Not guts no glory – I’d love to wait for a 100 point Dow dip, but you can feel the bulls breath & it may never come before the rally.

There’s lots of choices (see Positions sections of blog for ETF choices or Paul’s analysis of individual stocks). I’ll probably play SSO (ETF that’s 2X S&P 500) on smaller dips (if I have the time)

Do NOT chase over extended stocks/ETF’s

Investors - Wait for a bigger drop in MO before going long. Also recommend a long term position in USO that is dipping right now. ( See Positions Section of blog & comments section Friday)

If, we get up over +60 on the MO and  the Dow/major indexes rally – that would be a selling or shorting point.

Long Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Baby Bull

Smoke & Mirrors

Reality always seems to be managed by others in some kind of smoke and mirror game for their benefit (usually a powerful oligarchy) and not yours.

• Headline this AM on CNBC – Investors Lack Confidence in Regulators to Fix Markets
• Basel 3 (most of you have never heard of this, but it was supposed to be the conference that regulated worldwide banking) They gave banks till 2019 to get their act together. That’s  and unbelievably long 8 years How many financial meltdown are possible before then? Just how bad is the European banking system that it needed 8 years to get solvent?
• Of course big US shadow banks can still hide hundreds of billions (trillion+) in off sheet accounts. Here an account of just how phony the US & European banking systems have become by Karl Denninger

Politically we have groups of radical fear mongerers who collaborate and seek out the worst examples of behavior of Islam and 24/7 broadcast the results with their well financed media domination. This is exactly what Osama Been Forgotten and his crew try to do against the west.

Hate, fear, and unregulate financial systems work as a means to power money and war.

As one of you stated in the comments section we are generating so much hatred (smoke and mirrors) that one terrorist incident could set off a conflagration. (not the exact words)

Casino capitalism and fear mongering Islamaphobia does not instill confidence in the future.

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!

-

Technicals, Fundamentals & Analysis

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

Mantra for September - “The Black Box/High Frequency Traders BB/HFT control the majority of trades. Jim Cramer -”BB/HFT make up 80% of trades.”

Term for the Day – Forex (FX) - From Investopedia – “The market in which currencies are traded. The forex market is the largest, most liquid market in the world with an average traded value that exceeds $1.9 trillion per day and includes all of the currencies in the world.” The Dollar is the #1 currency in the world.

US Markets – Moved higher in increased but average volume. Average volume right now is much less than the volume in the spring & much much less than the volume that started the 2009 bull run. There was a key breakout in emerging markets and breakdown in the dollar that significantly impact US stocks. (see below)

Part of this rally was due to Basel 3 (see above) as the financial sector shot higher on weak worldwide regulations.

Today is a confirmation day of Monday’s rally.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar, fell a HUGE -0.96% yesterday. It also broke down to a closing low below its 4+ week long trading range. For stocks =Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Fell a minor -0.63%yesterday.  The BDI does not have the immediate impact that the MO or Dollar does. It also often makes long slow moves in one direction (see chart for patterns)  Right now longer term chart pattern = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose to +61.65 yesterday.= Bearish

Reading Tea Leaves

The dollar breakdown is the key factor behind yesterday’s rally. If dollar continues to fall stock will continue to rise. The dollar ETF - UUP (check out one nasty bearish chart for dollar by clicking on previous UUP ticker symbol)

MO has reached overbought territory. But right now the massive Forex (FX)/dollar market is the dog wagging the stock market tail. If the dollar starts to melt down we could see the MO reach the 97 it reached in July or even the 122 it reached at the start of 2009. (last very unlikely)

Still this is a time to think more about selling than buying. Going to stick with our strategy of selling into big rallies  (Dow 100+ points) when the MO is above +60. If the dollar continues to fall. then we will have to adjust our MO guidelines. +80 or +90  could become the selling/shorting point and falling to zero or +20 could be a buying point.

This all depends on the dollar. – UUP is still the what to watch.

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)

Current positions –  EWS (Singapore) – This ETF has broken out and gapped higher yesterday. Along with IFN (India)  they have broken out to new highs and are getting overextended or too far above 50 day moving average.

EEM – The emerging market ETF has broke out and gapped higher in increased volume. Again volume very overextended from 50 DMA. Volume is 1/2 of what it was in May & June when everything went down. Just another sign that the dominating traders are the BB/HFT’s.

Comparison to US indexes – 200DMA is still above 50 DMA. Emerging market have broken out and are dragging the US indexes along for the ride.

Long Term Outlook Upgraded

WHY – Several important technical barriers fell & we are rapidly approaching others for US indexes

• The major breakdown through resistance for the dollar in a massive move. US equities move inversely to the dollar.
• Emerging Markets broke out through major resistance. The 50 crossed the 200 DMA two weeks ago and a gap higher through resistance in increased volume is bullish.
• All these factors that should push stocks higher are happening with US equities now being overbought (over +60 on the MO) So there is rsistance to the baby bull market.

This Bull is a baby and it has yet to really start running. Because markets are so overbought right now the baby bull may never get its legs.  So the CAUTIOUSLY BULLISH long term outlook may be changed back.  This means we have to set a bit higher standards for overbought on the MO. (see above)

Long Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Fear

Each day two classrooms in the United States are emptied in the USA because these children are diagnosed with cancer.

Yet the brainwashing American media yesterday, from networks to blogs, focused on a “mentally ill, homeless and violent” man with guns and a bomb holding three hostages in Silver Springs MD.

Our culture has simple become conditions to over hype anything with guns, bombs and a potential terrorism because fear of terrorism sells politically and commercially. Your chances of dying from cancer, diabetes, heart attacks, or going brain dead from alzheimer are thousands of of times greater than a terrorist attack. Sure, we should be vigilant but we should also recognize reality.

Wikipedia reports that only 16% of the approximately 200,000 rapes a year in the USA are reported. How many classrooms are emptied because of the million women who get raped each year in the USA? Yet our American media growing trend is to focus on any potential terrorist related violence rather than rape.

Guess which country is #1 in the world in number of reported rapes so far this year?

——

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!

Technicals, Fundamentals & Analysis

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

Mantra for the month - The Black Box/High Frequency Traders BB/HFT control the majority of trades. Jim Cramer -”BB/HFT make up 80% of trades.”

Quotes from yesterday - “Churning. “More often than not a big battle like yesterday between bulls & bears means a reversal in direction. In this case that would be a rally….Overall think the BB/HFT’s are setting up for a rally.

We had one big rally in slightly above average, but decreased volume. (sorry for  ”?up” above – couldn’t clearly read the NASDQ volume chart) This is your typical rally in a BB/HFT controlled market.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar, of course, fell  a whopping -0.82%.  Because the BB?/HFT are obsessed with the inverse dollar/stock relationship, you’d naturally expect a huge drop in one gets a huge rise in the other = Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rose +1.03% yesterday. After a 5 week rally the BDI has flattened out. Now starting to rise. = Neutral/Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose to +6.81 Now above Zero, & both 50 & 200DMA’s. Nowhere near +/- 60 so there is lots of wiggle room on each side, but momentum obviously with bulls. Therefore = NEUTRAL

Reading Tea Leaves

Monitor, a trader, in comments section of blog describes the MO forecasting tool best – “An observation – The McCellan Oscillator works!!!!! Plus or minus 60 seems to be a reasonable point where markets turn. If you like to take risks just go long or “buy the dip” when its under minus 40 and wait. Within a few weeks it will be at over 40 and sell”

It actually not all that cut and dry, but the general focus seems to be correct for a Long Term NEUTRAL market.

Mea Culpa - For long term investors there was a point over a week ago when the MO was below -60 & the Dow fell another 100 points which was a buy point.  Personally, as the record shows, I did buy some long positions TYH & SSO, but let the FEAR of loosing $ force me out of those positions with minor gains instead of holding onto those positions. My mistake.

Obviously another typical BB/HFT rally where short positions are forced to buy stocks to cover their positions. This gives added momentum to the rally.

September looks to be one roller coaster ride, now with an upside bias. There will be buying and selling points for both traders and investors. Stay tuned.

The obvious sub trend brought about by globalization is the economic deterioration of the US economically  vs the ecomomic rise of emerging markets and energy rich countries (peak oil mega trend – see Overview section of blog).

Will the emerging markets grow fast enough to pull the USA out of the Great Recession?

Positions

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

Current positions –  EWS (Singapore)

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Is it time for Investors to put on their helmets and head to the bunkers?

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!

Technicals, Fundamentals & Analysis

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

Mantra for the month - The Black Box/High Frequency Traders BB/HFT control the majority of trades. Paul R in the comments section has found a great source describing the BB/HFT traders and consequences of what they do.

Another increased above average sell off that has been typical of the BB/HFT controlled US indexes for many many moons.

Perhaps its time to bring  out the old  Lost in Space Robot with all its bells and whistles and scream DANGER WILL ROBINSON DANGER DANGER. This was the third big volume significant downside day in the last two months and that almost always means the worst is yet to come (The Hindenberg Omen?) But BB/HFT’s have made a mokery of this kind of technical analysis. So caution is in order but the Robot is peaking out of the closet.

Here’s what’s holding up US stocks (Clearly NOT the US economy which is deteriorating) – Emerging Markets

EEM the ETF for emerging markets was down about 1/2 of US indexes (-0.77%) How long can emerging markets can things to hold together in the USA (see Reading Tea Leaves)

Significant Indexes

• The Dollar (USD)  [Anything price move over +/- 0.50 is significant. Doll moves inversely to stocks] The dollar rose +0.27% yesterday.  Almost two week trend = Neutral
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rally +3.66% yesterday. 5 week trend = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO fell to -27.32 = Neutral

Reading Tea Leaves

The good – The 5 week rally in the BDI is a clear sign that emerging market growth is continuing. China’s ( the #1 emerging market) stimulus worked, but almost overheated their growth. They have come down into a more normal range and are becoming more self sufficient every day.

The Bad – Back in 2008 Investors411 stated – the economic mess was far, far far, far, far bigger than expected (best example financial sector & this statement is still posted in POSITIONS section of blog) Economic mega trends (see OVERVIEW section of blog) have started to fracture both the USA & Europe economically. Neither has an abundance of cheap oil (peak oil mega trend)

The Ugly – Obama’s stimulus plan & tax cuts have halted the fall, but the jobs are still going overseas because of globalization mega trend. More jobs will be lost as the will for more stimulus fades. It’s election time and even a $60 billion (may have figure wrong) aimed directly at small business (“the engine of jobs growth”) and formerly supported by many Republicans was filibustered by those same Republicans. Nothing will get done in the next two months.

Longer term - 10s of millions of new jobs are being created each year in emerging markets. Millions more are graduating from universities in these emerging markets. When a computer tech will work 12 hour shift in China for $0.75 an hour and the same tech in the USA costs $18.75  for an 8 hour shift, who is Apple going to hire? (I made up the figures)

Just finished writting this and I’ve talked myself into and even more bearish position.  So lets go with the kitty in a helmet

Positions

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

Current positions - EWZ & EWS sold 1/2 of EWS for 0.5% gain

Because of yesterday’s meltdown  held off on buying USO & will start with a smaller 2% stake in a dip today.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!