Thelma and Louise car.

Corporatocracy

Excellent Debate (scroll down) in the comments section of the blog yesterday. But to understand how politically radicalized/changed the USA has become you have to think outside the box and NOT in terms of Democrat against Republican. Everyone in the debate made some excellent points.

• Obama/Democrats are sucking up to Wall Street and they love those corporate donations
• Romney/Rebublicans – He IS a Gordo Gekko Investment Banker who is trying just as hard to suck up to Wall Street.

The simple undeniable fact is the USA is radically shifting away from a democracy of the people and toward a Corpocracy, (I like this spelling) by of and for major global corporations who run everything from think tanks to lobbyists to major media outlets Latest Example – EXXON has found a home of Fox News (I still boycott Exxon)

Almost all other democratic governments, especially those in Europe are focused on the rights of people. Here, aided by a recent Supreme Court decision our entire political structure is focused more on the major global corporations.

Globalized corporations bottom line is profits and if it means more profits they will hire abroad. They also can now grow faster by selling abroad to growing middle classes than a shrinking one here. Therefore You are growing more irrelevant in a profit driven globalized world.   Globalization, is driving the American shrinking middle class and our democracy off a cliff, but its the new reality.

You can foster it, accept it, or fight it or maybe its too late and you drive your car off a cliff. I happen to love my democracy. What’s most important is you recognize the radical change in our political world. We are Not in Kansas anymore

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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

• It is my guesstimate that bond king, PIMCO’s Bill Gross is a Rand Paul libertarian. Its not a guess that he is very influential in the massive bond market. His following tweet about the potential form of QE #3 mid afternoon yesterday could influence traders.

• The McClellan Oscillator (MO) chart exploded higher to -22.40 (anything below -60 = oversold, -30 = modestly oversold)  From yesterday Another “snapback” oversold rally is possible.  The last oversold rally was a dead cat bounce. = NEUTRAL (Obviously still a bit closer to overbought than oversold)

• $USD The US dollar has fallen the last two days and may have established a lower high on its chart. Dollar is usually secondary to MO as a forecasting tool when the MO gets to oversold/overbought levels.  = bullish

• Reading The Tea Leaves - Short term – Short and long term outlook would be far more bullish if we had a big volume confirmation rally today. However –  Staying with the same dead cat bounce pattern of lower highs and lows till it breaks down. Pattern in place since May 1

• Reading The Tea Leaves - Longer Term -  ”See May 20th blog for forecast for this summer.“

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Positions

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

NLY - Annaly Capital Mgt. Ultra high dividend stock.

TZA - 3 times short small cap stocks Last week - Added another 1/2 position to TZA at 39.75 at/near open Wednesday.  Bought another 1/2 TZA position at 39.75 Thursday. Sold a 1/2 position near the open at 41.15 (see comments section of yesterday’s blog) for almost +4% gain. Combined with +8% gain yesterday = total of +6% on TZA with 1/2 position still open.

Gold/Silver – No trends except gold is out performing stocks and silver. A major editorial on this in near future

From yesterday -. May sell more early. Will add another full or 1/2 TZA positions on any modest market rally – This will be announced in comments section of blog – No modest, but a big rally at open in big volume so I sold. More likely to add TZA than subtract

Investors411 has recommends using TZA or SDS as a hedge/insurance against losses in NLY and especially if you own other dividend stocks (see past month+ blogs on dividend stocks.)  This way you protect prices of dividend stocks against falling prices and still collect the dividend.

Repeat Strategy remains

• Short any rally - Investors411 will use TZA (3X short small cap stocks) and SDS (2x short S&P 500 more conservative) .
• Sell long positions into any rally -

Disclosure - I own NLY, & TZA – I buy all stocks mentioned in the hypothetical Investors411 portfolio.

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Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative comments section every day.

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The Fed has moved from an expanding money supply to a neutral – No QE #3. Congress is threatening to contract the money supply. “We [the USA] need to grow at this point more than anything else.” Investors411 outlook will remain negative on the USA unless the Fed and/or congress return to more pro growth policies.

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Longer Term Outlook

Neutral/CAUTIOUSLY BEARISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

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The Illusion of Democracy

In the USA we have an Illusion of Democracy. What we really have is a rich oligarchy that buys votes through money any lobbyists. Lets use two blatant examples.

• The Billionaire ultra right wing Koch Brothers - JAB a few days ago sent a link to a site that quantified and qualified the $50 million they have spent to influence the American public’s vote. These right wing zealots with their $50 million sure have vastly more of an impact than you do with your one vote.
• Let’s look at politicians who get this money – Great site to see how much your representative (Dems or Reps) is bought and by whom is OpenSecrets.org. Today’s focus Senate minority leader Mitch McConnell.  His leading contributors are shadow financials (securities & investment) at $1,147,924. Republican leadership just met with Shadow Financial and other Wall Street leaders on financial reform. Even ultra right FOX Business news carried the story

From the Tea party workers to the leadership of the Senate (include lots of Democrats in this) the truth gets distorted by the vast financial resources and screamers in & reported on by the media.

Yes, along with JAB I still boycott Exxon, and have now added Koch Industries (Georgia Pacific -paper products) to my small protest.

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 for changes made each weekend

I really try to make this stock section as simple as possible, but I certainly hear your public (see comments section) and private pleas to make it simpler.  Over weekend I’ll put together some simple rules, strategy and sources

Big volume + Big rally = Bullish Outlook

UPS – world’s biggest package mover clobbers expectations. = Bullish

Weekly jobless claims worse than expected – two weeks in a row – Bad for economy, bad for Obama politically, but neutral for markets.

Reading the Tea Leaves – Add UPS to JPM & INTC results yesterday and you get the financial and technology sectors growing over expectations. Add more packages are moving across the globe. Add the Dollar dropping and McClellan Neutral (NOT overbought)  Everything at least till the McClellan gets overbought says Bulls will continue to stampede.

Its time to buy the dip and ride this rally till we enter overbought territory on the McClellan Index.

Significant Indexes

• McClellan Oscillator rose to +19.34 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is still in NEUTRAL territory – technically neither overbought or oversold.
• US Dollar – fell   -0.42% yesterday. [Anything over +/- @0.50 is significant.] Mantra – right now The Dollar Rules Remember, dollar down almost always = stocks up. The dollar broke though its 50 Day Moving Average support level and next significant support at @$79.5. Dollar closed at$ 80.19

Positions

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

Right Now, as I read the tea leaves, it looks like the beginning (first week+) of earnings season is going to be a bullish period and it would be good to be invested in those stocks/ETF that are going to move the highest.

Example, Yesterday Investors411 added a 10% position in TYH the ETF that does 3X what the tech stocks do. Price 174.1.  Originally, had planned to hold this for a small gain (3+%) but it now looks safe to hold till the McClellan Oscillator hits or gets close to overbought territory.

Depending on your level of risk – Buy dips (1 to 3% = dip) of following ETF’s – You can also check out YOUR stock list.  but as Pail R suggests – watch out for when earnings reports ate (google company and you will find date or your trading platform should provide this)

List from MOST risky to LESS risky

• SOXL – 3x semi conductor stocks – Warning very thinly traded.
• TYH – 3X technology
• UWM – 2X small cap stocks
• ROM – 2X technology
• SSO – 2x S&P 500

I will be adding another 15%+ of these on dips.  Remember once we enter overbought territory its time to sell or lighten up. Set a stop/loss at a level you feel comfortable with. 7% maximum loss is what I use.  Once a stock goes up I usually raise the stop. There are more sophisticated ways of doing this, but I’m keeping it simple.  Investors411 will be exiting these positions as we come close to or over +60 on McClellan Oscillator.

Remember its a short term trade. It’s natural for their to be a dip today. If markets fall over 50% of yesterday’s gain in bigger volume this strategy is in trouble.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

1/21/2010

The Day Democracy Died

We the People , in the USA,  just became We the Corporation . In a real sense all campaign finance reform has been virtually abolished . The US Supreme Court in a partisan 5-4 decision gave corporations and their lobbyist (or any entity) the permission to spend whatever they want on any election . Any candidate who dares stand against any wealthy special interest can be threatened and overwhelmed by money in an election. For more read the lead NYT editorial The Court’s Blow To Democracy

It may take a few years for the real impact to be felt. Here are s ome examples

• Locally – Developers and corporations will be far more able to buy town and state politicians who appoint the local zoning boards and make the laws. If they want to put a strip mall next to your home and crush the value of the houses in your neighborhood they can.  Businesses on the local and state level will get to pay less taxes and YOU will have to pay more.
• Big Shadow Banks – YOU bailed out the big banks for their mistakes and they got HUGE bonuses. Forget Obama’s declaration to fight the Shadow Banks. Goldman Sachs (4.3 billion in profit last 1/4) and the other shadow banks know can throw billions at politicians that oppose any taxpayer bailout. The bailout era may have  just begun .
• Military Industrial Complex – Any weapons company knows it needs a war and fear mongering to grow profits.  Now they can spend whatever they want. The criteria for choosing a weapon will also change from its effectiveness to whichever company has the most money to intimidate a politician. If a poll doesn’t support a war/weapons system they can overwhelm him/her in a reelection with money.
• Monopoly s – The biggest winners are the biggest companies. In every industry the most powerful company rules. It will be far easier forcing smaller competitors out of business once the giant corporations own local state and national politicians. Example EXXON – The biggest corporate entity will have the most money and therefore own the most politicians. Each competitor will get shoved aside or gobbled up starting with small business and ending with their major competitors.
• Freedom -  No other functioning democracy allows the legal corporate buying of politicians . People have the power in these democracies. The corporate board rooms in the USA will be the oligarchy where decisions are made on everything from taxation to your freedom if you dare to challenge their power.
• Taxpayer – The taxpayer has been thrown under the bus.  As corporate taxes fall either deficits will grow or you will be forced to pay the difference.

There will be some corporations and individuals (perhaps Google & folks like Warren Buffett) that will work for the betterment of the world. But greed/profit is the bottom line for corporations. Your $25 contribution or work for a candidate can be overwhelmed by Exxon’s or Shadow Bank’s  $2.5 billion contribution. Our constitution centuries ago was  created for We the People – now its changed to We the Corporations. Remember yesterday 1/21/2010. If there is no change – Democracy as we know it has died.

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 over weekend.

US stocks got toasted in HUGE volume.

Obama threw down the gauntlet at the shadow banks and stated he never wanted to see an institution that was too big to fail. "Never again will the American taxpayer be held hostage against these banks that are too big to fail."

However, the Shadow Banks now have the power (see above) & enormous amounts of money (lots of it your tax dollars) to defeat any meaningful reforms.

• McClellan Index at -49.56 = Almost significantly oversold.  Only 10 points till  @-60 or oversold.
  

Sorry, just too upset about Supreme Court decision to even think about stocks.  However, obviously, investing in the biggest corporations, in the long term will make the most money.

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

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

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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