Senator Ted Kaufman -” The Most Important Person You’ve Never Heard Of.” - ABC

Investors411 readers have heard this name many times.

Too Big To Fail

Moody’s, has come out with a report that Congress has NOT solved the Too Big To Fail Shadow Bank Problem. A team led by Moody’s (one of 3 major credit rating agencies in USA) big wig Robert Young concludes:

“[A] key issue that challenges the feasibility of the proposed legislation is that it would not fully eliminate the issue of interconnectedness, nor is it likely that resolution authority could fully eliminate the systemic implications of allowing a large and/or highly interconnected firm to default, especially with respect to large international groups, and it certainly would not eliminate the risk of contagion,”

Shahien Nasiripor writing in the Huffington Post point out some obvious and alarming statistics. The 4 major shadow banks alone are growing and now control $7.7+ trillion dollars of money. [$7,700,000,000,000] Relativity = Lehman Brothers who collapsed in 2008 controlled $400+ billion. Therefore, each of these major  banks is @ 5+ times large than Lehman’s.

Now think, of the people/ businesses who have their savings in each of these major over leveraged shadow banks. If one goes down, like Lehman panic will certainly spread to others. Bada Bing, Bada Bang, Bada BOOM!

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

Mantra – Volume has not worked as confirmation factor for many many moons. = Neutral

Lack of volume shows hedge funds and giant institutions with their high speed computers are the dominating the US stock markets. Most average investors have long since got out.

As predicted, (it was no surprise) yesterday markets held onto the significant gains of the day before. = Bullish

A major French bank got toasted this AM because of  derivatives. Emphasis on the word French = Bearish

All eyes on monthly jobs report - Its safe to say this number is massaged or manipulated to a degree by whatever administration is in power. Comparing the USA’s unemployment rate with other countries is like comparing apples and oranges because of the different ways each country compute/massages its unemployment number.

The Employment Report- 8:30 EST  - +431,000 jobs, Employment number down to -9.7%, Private sector jobs only +20,000. Most jobs created by census. = WEAK Report – Worse than expected.

Significant Indexes

• McClellan Oscillator rose to +9.43 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. -  This is first time the MO has turned green (entered positive territory) in over a month. Momentum is up, but bottom line – this is NEUTRAL territory -   How the MO works.
• US Dollar –  The dollar rose a significant +0.52% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Currency markets are now being directly manipulated by out Fed and other central banks. This manipulation is to keep the Euro from falling. Dollar  at $87.25 Chart shows at least 6 attempted breakouts above @87.5 have failed in last 2  1/2 weeks. = Bullish.

Reading the Tea Leaves - – Stocks are focused on the jobs report.  Since stocks have rallied into the into todays jobs report, it would be logical for the Central Banks to allow the dollar to rise to a new high with a decent jobs report. Momentum is up for the MO and this currently translate to a short term positive for stocks.

Since Obama administration (leaked?) and Wall Street have built into the recent rally a much better than expected jobs report expect the following.

• Worse than expected numbers – Stocks take big initial hit, but US employment is not really a major factor in shorter term US stock prices – Hedge funds and giant institutions are far more worries about the monsters mentioned yesterday.
• Better than expected numbers – Would have to be blowout numbers. Really good numbers already built into stock prices. A blowout number will send the dollar and stocks soaring. Sometime during the day major players will realize that a soaring dollar will hurt stocks (even central bank intervention can’t stop a massive run) and this will temper gains.
• Obviously, better than expected numbers is good for the long term economic well being of the USA.

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own

Have NOT had a chance to update this/last weeks trade. You can find results in individual post over last two weeks

Consider ETF’s that short the markets.

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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It’s a Wonderful Life

Us old timers remember growing up to this Frank Capra Movie and even leaving our doors unlocked at night. My how America has changed. I’m repeating a theme, but this short VIDEO clip based on It’s a Wonderful Life will make a difference. Over 300,000 have viewed it in just 3 days and hopefully doing something.

You CAN make a difference

watch the short video Once Upon a Time in America

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made last weekend.

Major US markets were flat and volume increased. You get the feeling gamblers were placing their bets before the employment report released this AM.

The employment numbers for December r - 84,000 – Jobless rate stays at 10% November revised up a bit to +4000 You would rather  see a positive December report economically. But this number is perhaps decent for stocks, because it means the Fed should keep liquidity growing.

• McClellan Index at +31.19 = A bit overbought.  The index has inched higher for the last few days. There is still some wiggle room for US stocks to move higher before they reach @+60 or overbought territory -  There’s a long way to go till we reach @-60 or oversold.
  

Even though there is a solid chance markets may move higher on a decent jobs report the McClellan Oscillator is showing less room for upside gain.   A report that is too good or too bad will probably have a negative impact on stocks.

One talking head on the financial channel stated that 15 of the last 17 Monday’s have been up days. Investors411 will be taking $ off the table in a big rally

Earnings season starts next week.

The long term bull is trend is firmly in place, but we are getting close to overbought territory.

Positions

The  Positions Section (also at top of blog) has the latest buys and sells (Usually updated over weekends)

These are positions I actually own

SELLING & BUYING

Even though Investors411 once again clobbered the benchmark S&P 500 this year some obvious timing mistakes were made – not buying dips and selling into rallies .  Will try to correct that this year.

Also going to set aside up to 20% of portfolio to invest in Individual stocks. The rest will be ETF’s

Investors411 was very successful with NVS & AMZN last year. Invetors411 recognized the trend, defined a clear point to sell and sold. Now, both stocks are getting toasted – see charts.

See POSITIONS (scroll down) for details on this and what’s under consideration for 2010.

Long Term Outlook = CAUTIOUSLY BULLISH

Consumer Financial Protection Agency

The Consumer Financial Protection Agency that passed the House is the most important piece of legislation out there that will impact YOUR future. Sorry Health Care legislation that may pass, while important, looks too weak  to make a significant impact.

TARP oversight administrator Elizabeth Warren (she’s invited on everything from ultra right wing shows like CNBC’s Larry Kudlow to ultra left wing shows like MSNBC’s Rachel Maddow) believes a single Consumer Protection Agency “absolutely” … “would” have prevented the financial collapse.

Right now, there are 7 different agencies that big business goes to. They shop around to find the agency that gives them the best deal or least regulations. This 6 minute video is well worth watching. (a 14 second add precedes video)

This is the moment or the tipping point. “David” (you the consumer & bailout taxpayer) vs “Goliath” - (the shadow financial Industry with their insiders and powerful lobbyists) according to Warren.

Sorry to disagree with Popeye and those who think that there is little difference between Republicans and Obama/Democrats, but, in this case all Republicans voted against a Consumer Financial Protection Agency in the House. Stewart (see comment section) – is right Republican’s just don’t get it.

Put off Economic Forecast Conclusion because CPFA just too important

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made last weekend.

Another flat low volume day as markets await US monthly employment report on Friday .

The Fed released its minutes yesterday showing a diversity of views .

“A few” wanted to expand liquidity – “buying mortgage securities from Fannie Mae and Freddie Mac might need to be expanded,” One member thought it should be “scaled back.” and it looks like the majority have a wait and see attitude.  Data this week showing a decline in home sales after a 9 months of increases gives “a few” a much stronger case. The employment report also impacts this. Translation for stocks = More liquidity is short term positive and a possible long term negative because it could bring inflation.

• McClellan Index at +28.73 = A bit overbought. This means we have some wiggle room for US stocks to move higher before they reach @+60 or overbought territory – a time to lighten up on positions. There’s a long way to go till we reach @-60 or oversold – a time to add to positions.

Positions

The  Positions Section (also at top of blog) has the latest buys and sells (Usually updated over weekends)

These are positions I actually own

SELLING & BUYING

Results for 2009 +35.5%

Results for 2008 -13%

See POSITIONS (scroll down) for details on this and what’s under consideration for 2010.

Long Term Outlook = CAUTIOUSLY BULLISH

Afghanistan Escalation

Photo – Huffington Post

US launches major escalation in opium rich province in Afghanistan. BBC story here

By getting side tracked with an "unjust" war in Iraq we have created or ignored a whole host of other problems – Our decline in credibility, loss of allies, Iran’s moving to fascism, Pakistan destabilizing, the rise of Hamas & Hezbollah, Lack of focus on N. Korea and deterioration in Afghanistan are just some of the problems that have emerged.

Health Care

• Wal Mart according to CNBC now backs Obama’s concept of a public health  insurance program here
• AMA (American Medical Association) now "open" to public health insurance program. This group can’t make up its mind. Story here
  
• While the two above indicate momentum toward a public heath plan program the major obstacle continues to be the huge amount of money the lobbyists against the bill give senators and congress. (see past Investors411)

Boycott EXXON

While other major energy companies are  running ads that encourage conservation and alternative fuels  Exxon is still funding groups that are putting out false and misleading info on climate change here

Many of you in the past have sent me boycott Exxon emails. Sometimes this was over high oil prices, sometimes they’re leading opposition to climate change. I still boycott EXXON

Employment Numbers for June

8:30AM EST – Job loss grows from 9.4% to 9.5% with greater than expected -467,000 jobs lost last month. .  Manufacturing was way down – probably duein large part to auto bankruptcies. Markets are going to take a  hit today because of this.

This report was @ -100,000 worse than May, but +100,000 better than the months before May. Jobs are a lagging indicator, but quite important if you have one. More here

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

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Technicals and Fundamentals

All eyes on Unemployment numbers this AM Results =

Prices rallies, but volume dropped significantly/moderately for all major indexes. This is a bearish sign

Significant forecasting tools/Indexes for stock markets

Note - Repeated statements in brown.

These are important forecasting tolls, but secondary to volume .

BDI - The Baltic Dry Index measures the flow of goods (world trade) . BDI fell yesterday.  This index is winding up like a spring, within a consolidation pattern. Watch out! Long term Bullish rise from bottom, but coiling right now for next move .

$USD - The Dollar fell -0.64 % . The strong inverse correlation between the dollar and stocks has existed for many moons. Market. Dollar down = markets up. We are in a month long consolidating pattern after a multi month fall Long term Bearish pattern for Dollar that is consolidating pattern now (neutral) = Bullish for stocks This strong correlation may break down in future. (see yesterday’s update.

VIX – Measures Volatility in S&P 500.   The less volatility means the better investors are feeling. Yesterday the VIX fell a meager - o.49% yesterday.  Longer term 4 month trend down and we are near Sept. 08 lows. Bullish long term trend for stocks

Our Positions . -  Over the holiday weekend I’ll try to give you an in depth outlook for our positions, especially the new positions.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING