Is the Volker Rule Dead?

Sorry all my time was spent putting an analysis of YOUR stocks together. Many of these stocks have gone up over +20% in the last few weeks. Congradulations! Here’s and interesting editorial on above topic.

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	+0.16%	down
NASDQ	-0.23%	down
S&P 500	+0.05%	down
Russell 2000	-0.32%	-

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. (No changes this weekend)

Flat day in weak volume again. US markets are consolidating.  Consolidating (trading in a tight flat range) is good and usually good for bulls and generally means the trend will continue. The monkey wrench here is that there was little increased volume behind the move higher.

Fearless Forecast for Week – Because we now are not oversold (see below) and the earlier move higher had such momentum behind it look for a rally or up week. (Sorry spent time answering questions and did not do the usual Monday forecast)

Last week’s fearless forecast “momentum should make this an up, but volatile week.” Not so volatile, but certainly an up week.

Significant Indexes

• McClellan Oscillator fell a again to +30.02 yesterday. We now well under +60 or Overbought territory. StockCharts has a better version of the McClellan chart ($NYMO) LINK. Two weeks ago week the NYMO reached a high of 75.33.
• BDI - The Baltic Dry Index, which measures the cost of world trade (also a good indicator of how China is doing since they are huge exporters/importers) has exploded higher in late Feb. & early March. After flattening for a few days last week it is still moving higher = Bulls rule
• USD – The Dollar regained almost all of what it lost on Friday.  In the past there has been a strong correlation between a falling dollar and a rising US stock market. Right now the dollar is back within its consolidation pattern = Neutral for stocks
  

Positions

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

From Friday “Shorter term traders – ” Bought a 10% (Of portfolio) position in TYH at 151.50. Put stop at that 151.5 and may sell 1/2 for 3 to 5% gain hopefully today. TYH closed at 154.99 – Sold 1/2 TYH at 156,oo for +3% gain Friday AM and got stopped out yesterday at151.5 for a 0% gain

YOUR Stock List

The McClellan Oscillator has fallen from Oversold (over +60) to near neutral territory +30. In past Updates I mentioned I’d nibble on some of these stocks as the NYMO came close to +20. The best time to buy are when conditions are oversold or at/below -60. It all depends on Your individual level of risk as to when you buy. The lower the NYMO goes the less the risk. So for those who can tolerate lots of risk you could nibble a little

NB -Last Week’s comments in black. This week’s violet. Chart links underlined in Blue

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

• CAAS – Ever since this stock was put on list it has gone up big time. A buy the dip stock Volume dropping as stock consolidates = bullish A buy the dip stock
• PCLN – Dipped last week and now in rally mode A buy the dip stock Volume dropping as stock consolidates = bullish A buy the dip stock
• F – Too over extended or above 50 day Moving Average. Still going up, but too overextended – wait
  
• IMAX Investors411 owns this stock – Went elliptically higher and now must find base. wait
• CSCO, Like AAPL at new high this year. For longer term investor. A buy the dip stock. exploded higher, now consolidating A buy the dip stock
  
• SHOO – traded flat after breakout – in consolidation A buy the dip stock failed breakout but still has potential
  
• ICON, Broke out and is on run higher. Too over extended now.Volume dropping as stock consolidates = bullish A buy the dip stock
• VPRT Did break out. A little overextended. A buy the dip stock Fallen in heavy volume = bearish – Wait
  
• DGIT Thinly traded  Consolidating, A buy the dip stock Still consolidating in weak volume = bullish A buy the dip stock
• CTCT Thinly traded but Good volume and another breakout A buy the dip stock Exploded higher too overextened wait
  
• VCI Another breakout, over extended Tempting, but risky starting to consolidate Still Tempting, but risky
• CREE -  Starting to Dip A buy the dip stock. dipping in weak volume = bullish, a buy the dip stock
  
• SNDK – .  Dipped then moved higher. Too over extended dipping in weak volume = bullish, a buy the dip stock
• VSH – .  Consolidating and now looking better, a little over extended Tempting dipped/fell in moderate volume. Tempting
  
• HMIN – Falling Too much downside volume

New

• RINO - Brokeout yesterday in heavy volume = bullish – a buy the dip stock
• CTRP – Faces a resistance level & just dipped in weak volume a buy the dip stock
• CNAM Went elliptical now finding base. Huge risk but huge reward Wait

New plays that have similar 3d fundamentals as IMAX.

• DWA (Dreamworks) Lots of upcoming kids 3d movies. Consolidating but some big down volume days - wait
• CNK (Cinemark) Theater chain building 3d theaters. Still a bit over extended – Tempting
• RGC (Regal Entertainment) just broke out again. Too overextended wait for dip.- Tempting
  

Bottom Line – there are a whole mess of decent stocks to choose from. We are no longer in oversold territory so less risk averse folks may want to nibble. The more oversold the general markets get the better all of these stocks look. My top picks are anything that says = bullish a buy the dip stock. Caution here is I’m only looking at these stocks technically. I would hope you do some fundamental research before buying.

There are two reasons many of your choices went up.

1. You choose wisely.
2. We went from below -60 (oversold on the McClellan Oscillator) to over + 60. (overbought.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Football lover Karl Marx

Football and Karl Marx

Football is America’s #1 sport. The Superbowl where (economically shattered) New Orleans Saints beat another small market team the powerful Indianapolis Colts, was watched by more viewers here than any other American sporting event.

Football reins supreme because there is parity in the league or socialism. There is a market cap which no team can go over in payment for all combined players, and a draft for new players where the worst teams choose first.  This is a socialist goose that has been laying GOLDEN revenue eggs for the NF. Unlike baseball that’s hurting for revenue and is in decline because of a less balanced revenue program. In Baseball any team outside major media markets has a far less chance at winning. Each stadium gets packed in football, while only a half dozen do in baseball. Karl Marx would clearly be a football fan.

Now owners and players both want to change the system in a rush of unregulated capitalist greed. So if anyone asks you if socialism works in the USA – you say it sure does – its called the National Football League. Socialism Makes Everbody Rich. Why change it?

Elections – Iceland/Iraq

Two major elections took place late last week

• Iceland – Remember Iceland was perhaps the country worst hit in 2008 meltdown because their shadow banks believed in Greed based capitalism. Over 98% of the voters there voted to renegotiate loans of foreign investors who had put their $ in Icelandic banks.  Seems they did not want to pay back billions with their tax dollars.
• Iraq – Over 2 million Iraq refugees voted from Foreign countries. They are too afraid to return. Still the world’s largest refugee crisis. Even with the elections there are many signs that the different religious/ethnic factions have no intentions of compromise. Oh well, neither do the two major parties 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!

Index	Percentage	Volume
Dow	+1.17%	up
NASDQ	+1.48%	up
S&P 500	+1.40%	up
Russell 2000-	+2.08%	-

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. (No changes this weekend)

US equities rallied significantly on Friday. but volume was just a wee bit higher. Long term capital is just NOT flowing into equities in the USA. Unlike the start of the bull market in 2009 when we saw massive amounts of volume. Investors are staying on the sidelines. Volume has been for decades the #1 confirmation factor of a price move. However for the last 6 months its been pretty anemic & useless as a forecasting tool.  Basically this looks technically like we are building a bubble and obviously investors are doubting the rally

The Russell 2000 has already broken out to new highs

Overbought US markets (SPX up 6 days in a row, and up 11 of the last 14 trading days) are all close to new highs. The NASDQ is o.o2 points away from a breakout to a new high.

Last Week’s Fearless Forecast

Investors411 predicted a rally at the week’s start that would get sold into because of an overbought market & the unemployment report – Therefore a “flat week” As stated last Friday - ” The unemployment numbers Friday were as good as it gets for US stocks.” The fact that employment is NOT declining means interest rats will stay low and the Fed will keep flooding the economy with money. From Friday AM -  “Expect a rally.”

Miscalculation about the jobs number (I expected worse than a flat -9.7%) and ignoring looking at the exploding BDI (see below) were the reasons for last week’s miscalculations.

This Weeks Fearless Forecast

The McClellan Oscillator hasn’t been this high (+75.33) since last April. We are also approaching a major resistance level – the January  high of 1150 on the benchmark SPX or S&P 500 (now at 1139).  It seems likely that this level will get challenged.

• Fundamentally it sure looks like the FED has reason NOT to raise interest rates (employment numbers) and that will keep interest rates low – great for stocks.
• The BDI is exploding higher. (see below)
• The Gree debt problem seems to have settled and “will not spread.”
• Any serious attempts at financial regulations seems to be disintegrating.

So fundamentals are moving in one direction against strong technical resistance. Look for a week where at least the NASDQ joins the Russell 2000 and breaks out to a new high, Even though volume is lacking – momentum should make this an up, but volatile week.

Significant Indexes

• McClellan Oscillator jumped significantly to  +75.33 yesterday We are now well above +60 or Overbought territory. StockCharts has a better version of the McClellan chart ($NYMO) LINK. The only other time we saw numbers on the McClellan move higher than this was three times from November to March 2008/2009. The all time high was +121.86 in the last week of last year.
• BDI – The Baltic Dry Index, which measures the cost of world trade (also a good indicator of how China is doing since they are huge exporters/importers) has exploded higher in the last few weeks = Bulls rule
  

Because Investors411 recently changed the Long Term Outlook to Cautiously Bullish - any pullback in the McClellan Oscillator to say +20 would be an opportunity to nibble again.  This market wants to move higher.

Positions

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

Wish Investors411 had more stock positions (only @20% invested in stocks because of overbought technical situation) Will keep selling into any major rally the remainder of the portfolio.  Certainly a breakout over SPX 1150 would be one of those situations.  Right now what to look for is are stocks going to go “elliptical” (continue to move higher at a rapid rate) and blow through last years high.

Would sell more into that rally and buy/nibble more on any drop in McClellan to @ +20.

IMAX – 3D Alice in Wonderland had a HUGE $116 million dollar opening. Avatar’s opening weekend was $55 million.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Frank Rich

“The… Obsessed and the Deranged“

There is a symbiotic relationship between governments and capitalism. Without the checks and balances, or regulations from government capitalism will allow greed to run wild. The catastrophic 2008 economic meltdown was just another example of the long line of history that keeps repeating itself. Obviously capitalism works economically better that pure socialism, but when human being whose only bottom line is profit are left alone their schemes explode in bubbles of over leveraged greed.

The NYT’s Frank Rich has another excellent editorial similar to the one in Investors411 last Monday. His focus was on Francis Joseph Stack III, the terrorist/right wing hero who drove his own plane (he was rich enough to own a plane) into an IRS building to protest his tax situation. Rich has a far more extensive list of anti tax right wing zealots and politicians who give Stack III a pass or praise.  Urge you to read his editorial  “It’s enough to make you wonder who is palling around with terrorists now.“

George Soros

Economic Hit Men

(Part 2)

Banks are the good guys – It’s the loan sharks, or almost  totally unregulated entities that bring economic systems, taxpayers and countries to their knees that are the economic villains. Technological innovation is great for financial institutions, but unregulated it can also create over leveraged Frankensteins from AIG to Lehman Brothers.

Niall Ferguson, in his book The Ascent of Money points to two other financial entities that are today’s “economic hit men” – Hedge Funds and Sovereign Wealth Funds. Both can place massive amounts of highly leveraged capital in short positions against a currency,stock,  bond, or country.

• Hedge funds are almost totally unregulated entities that pool money of ultra wealth individuals and can leverage it in a multitude of ways. There are thousands of the hedge funds who often take highly leveraged short positions on for example the survival of Greek bonds. (A current example). The “capo dei capo” of hedge funds is multi billionaire George Soros (also a major Dem. fund raiser)
• Sovereign Wealth Funds have even more capital than and they can use their power as an economic weapon to take over or crush other economic entities.  “More powerful” than hedge funds and centered primarily in Arab dictatorship’s and China their power is staggering. Ferguson cites (page 358) a 2007 Morgan Stanley report “That within 15 years they could control just over 9% of total global financial assets.”

Bottom Line – There’s a Financial war out there. Some may call it a competition. There are some major sharks that are circling debtor nations (us) – Shadow financials, hedge funds, Sovereign wealth funds. SHARKS BITE AND GO INTO FEEDING FRENZIES. The more in debt you are the jucier you look to hungry sharks

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	-0.51%	up
NASDQ	-0.08%	up
S&P 500	-0,21%	up
Russell 2000-	+0.00%	-

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.(No changes this weekend)

Last Week’s Fearless Forecast

“Everything technical (volume & McClellan) is showing that we are running out of rally room…Rally Ho, but it gets sold off at end of week.”  US Markets were down 0.4 to 1.5% for the week, so the Forecast, for the most part was accurate.

—————

Chili earthquake is going to impact copper prices – Chile world’s #1 producer of copper. Earthquake means copper prices going to rise.  In Boston all we’ve had is some rain, but up and down the East cost huge amounts of Snow will have a negative impact on the US economy.

Internationally the acronym to remember is PIIGS – Portugal, Ireland, Italy, Greece & Spain – These are the European countries, like the USA that have over leveraged debt problems.  The difference is these problems are peaking now & ours have been covered over by less transparency ant trillions of dollars. This comparative weakness will continue to make the dollar stronger & a stronger dollar usually means weaker stocks.

————

This Week’s Fearless Forecast

The US markets are trying to rally, but economic fundamentals seem to be moving in a different directions.  Similar situation to last week. Markets looking to rally, but economics keep declining.  Call – Flat week. – Rally gets sold into at end of week.

Significant Indexes

• McClellan Index rose slightly  to +31.71 We are somewhat oversold, but have a ways to go to +60 Oversold territory.

Positions

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

No change in major ETF positions.

ETF Positions

• 10% of portfolio EWZ (Brazil)
• 6%of portfolio FXI (China)
• 10% of portfolio MOO (agriculture)
• 3% of portfolio IMAX (3D)
• 2.5% of portfolio TYH (3x what techs do) (Down from 7.5% last week)

Will be lightening up when/if positions reach oversold 0n McClellan Oscillator.

Also,  Set what’s called a stop/sell orders on at @ 3% above what it was bought for

• recently bought (added to) EWZ
• 1/2 of MOO, a longer term position.
• The remainder of THY

Stocks

• IMAX – doing fine – really hope this will be a long term hold – and there will be other dips to buy into on the way up.
• Looking for entry point to buy PRLN & VPRT as well as some other stocks on YOUR watch list (scroll down on link)

Other stocks on YOUR watch list - the earliest I would nibble is when the McClellan Oscillator falls below 0 (zero)

Not adding to any major ETF positions until markets become oversold again.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

What if Cuba got $6.6 billion in weapons?

Imagine This

What if China gave/sold $6.6 billion dollars worth of weapons to a country 90 miles off our shore  – CUBA. What would the reaction in the USA be? Chest thumbing 24/7 outrage and our military would move into position. As Popeye (see comments section) point out we just sold $6.6 billions in weapons to Taiwan 90 miles off the China cost.

We want China’s help in sanctions against IRAN growing nuclear threat. How is China going to act now to the American threat of $6.6 billion of new weapons off its shore? How would we react?

Bottom line, – this is feeding the military industrial complex need for profits/wars.

Wanting America and Obama to Fail

Part 2

Nobel Prize winner Paul Krugman editorial today echoed the problems Investor411 brought up Friday when Senator Shelby held up held up 70 top government appointments over two pet pork projects. In fact, other Senators are doing the same.

Obama’s, Press Secretary, called Shelby’s individual filibuster “silly.”  Silly? – The whole White House need to drink a quart of testosterone – Where is he fight that dominated the Obama campaign?

Falling Euro’s Threat to America.

Many, smaller European companies are on the verge of default. Obviously, Credit Default Swaps are traded on their bonds. So nobody knows just how mush of the debt they have and probably more importantly taking bets on there success and failures.

Simon Johnson , MIT prof and former Chief Economist of the World Bank has an editorial on this.  Basically the Euro will get weaker relative to the USA and this will help European socks, but also push American stocks higher.  Mantra for months has been stronger dollar = weaker US markets. Compare a chart of the Dollar ($USD) and the SPX (S&P 500)

Here’s the problem nobody knows how bad or over leveraged things exactly are because there was little regulation. – just like the theUSAUSA.

Who is Killing Financial Reform?

Robert Reich has a must read editorial on Democrats, lobbyist, and others who are involved in killing financial reform. It’s been over a year since Lehmann crash and nothings been done to fix shadow banks.

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	+0.10%	up
NASDQ	+0.74%	up
S&P500	+0.29%	up
Russell2000-	+0.56%	-

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.

.

Significant indexes – Forecasting tools for market direction

• McClellan Index fell to -69.02 = Still Oversold. How low or oversold can markets get before rebounding. We did reach @-93 about 3 days ago, about @-115 last November & @ -130 back in the fall of 2008 .Since +60 is overbought & a sell signal – we are 130 points away from that and only 60 away from the HUGE Nov 2008 crash (see chart) Bad numbers are Bullish

• BDI – This chart shows the Baltic Dry Index (scroll down) , a measure of shipping costs, Has broken through a major month long  support level at @ 3000 .  Yesterday the BDI rose +30 at 2715. This is the second day of a rebound that will have to get above 3000 to be meaningful.
• $USD -The USD moved up dramatically as stocks fell lasst week.  As discussed many times before a rising dollar hurts US stocks because our goods cost more to export Rising Dollar = Bearish for Stocks

Fearless Forecast – We’re in for a buppy ride – Hard to value the extent of the European Debt problem – So when you don’t knoe investors almost always paly it safe and that means sell – Down Week – Buying the dips

Positions

The  Positions Section (also at top of blog) has the latest buys and sells – Revised positions over weekend) – These are positions I actually own

SELLING & BUYING

Here’s stocks YOU suggested  to add to the Watch List. – Will try to analyze stocks over weekend.
GS, JPM, CSCO, SHOO, ICON, SOA, ALF, VSEC, BIDU VPRT (tomorrow)

Still adding to positions. The more the McClellan dips the more you should add

The strategy .  Buy a position in an oversold market and sell 1/2 of it when it gains 5 to 10% and let the rest ride.  The position should take into account major trends that you understand. For me China, Emerging Markets and Brazil still fit the bill. However there are concerns about a long term US/China trade war. Also any of the ETF’s that do 2 & 3 X what the major US indexes do.

Bottom Line – We are oversold and ready for at least a short term run – Investors 411 opened a 5% position in TYH (3x financials) Friday at 117.14 A short term trade with a tight stop at 177.14.  Will take 1/2 profits at 5%+ rise

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

HMS Titanic

Sipping White Wine

Every year major capitalist leaders from around the world get together at Davos Switzerland and to sample the world’s best wines. This banquet usually sings the praises of globalization and unfettered free markets. But the tone decidedly changed.  France’s President Sarkozy took the lead. What’s unique was wealthy wine sippers went after banks (David Ignatius editorial) in arguably the banking capital of the world – Switzerland. Populism (going after the too big to fail banks and using YOUR tax dollars to bail them out) was popular.

Bottom Line – Volker (who goes in front of Senate Banking committee today) & Obama have both spoken out against the too big to fail shadow banks. The Supreme court has given them added power (see past updates). Remember – for something to get done it has to pass the Senate and Chris Dodd (D – CT) is the chair of the Senate finance committee.  He’s the guy who approved the HUGE bonuses for Wall Street Shadow Banks.

Betraying a Nation

Thanks to Yankee Bob for filling in and bringing to light some credible and different ways of fixing our deficit problem.

If we are on the  sinking economic Titanic and the passengers are running from side to side frantically looking for an answer –  the real question is what is the crew (political leaders) doing about their boat. Even an idiot realizes you cant keep cutting taxes and increasing weapons, social security, medicare/medicaid, which combined with the increasing debt make up 70+% of the budget.

Senators (D – ND) Kent Conrad and (R – NH) Judd Gregg worked for 2 years to form a bipartisan commission to deal with the sacred budget cows that both parties have. Two weeks ago it came to a vote in the Senate and even sponsors of the Bill like (R) John McCain switched sides to vote NO .  In all 22 Democrats , 23 Republicans , 1 Independent were too afraid to vote for this bill.  It failed to win the necessary 60 votes to break a filibuster. (53 yes to 46 no) Here’s a David Broder editorial and a list of the cowards who “Betrayed America. “

Obama promised to form a Presidential Commission to look into this, but it lacks the power of a Senate commission.

Future Wars

We supposedly want China’s support in backing harsh sanctions against Iran .  So The US (Obama) goes ahead with selling $6.4 billion dollars worth of weapons to Taiwan.  China want to have a reconciliation with Taiwan and wants the island to be part of China. China embargo’s  Think we will ever get China to join us with harsher sanctions on Iran?

Like the giant alien plant Seymour in Little Shop of Horrors – the Military Industrial Complex in the USA keeps crying FEED ME

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	+1.17%	down
NASDQ	+1.11%	down
S&P500	+1.43%	down
Russell2000-	+1.20%	-

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 markets rallied significantly in decreased below average volume. Volume did NOT confirm the rally. Only the NASDQ had volume that was even average.  Yesterday’s trading was an oversold bounce.  Technically, so many traders/investors had sold conditions were oversold (see McCellan Oscillator below) and we ran out of sellers.

Volume, our #1 technical forecasting tool, has indicated a major reversal is potentially underway. Three+ big volume combined with major declines shows major players heading for exits in the last 2+ weeks.

The major event of this week will be the Monthly jobs report at the end of the week. Earnings season is basically over.

Significant indexes

• McClellan Index at -53.52 =  Yesterday we rebounded from over -90 .  We are just below -60 or oversold levels. If everything eles is equal both  long term investors and even short term traders should buy when markets are oversold and sell when they are overbought +60 .
• BDI – This chart shows the Baltic Dry Index (scroll down) , a measure of shipping costs, Has broken through a major month long  support level at @ 3000 and is falling. Yesterday the BDI closed at  2745.= Bearish – especially for China. More on this tomorrow)
  

Fearless Forecast (for week) The US jobs report is critical for Americans, but not Wall Street. Wall Street can grow on profits from abroad. In fact, earnings reports which are getting better each quarter, are mostly improving on growth from emerging markets. China, the #1 emerging market has moved to slow growth and prevent a bubble – this has slowed their economy and stocks over the last month. However, the FXI has rebounded over the last few trading sessions in strong volume = Bullish The BDI is showing the exact opposite of a rebound, but an economy that’s slowing.= Bearish

So we have conflicting signals on China’s growth story. We also know from past experience that US which is still the economic leader worldwide (this position has diminish for a decade and continues to do so) can move significantly higher in weak volume. We saw this form Aug to the end of last year.

Best read of tea leaves – since we are technically oversold we should have an up week . There looks to be no major meltdown in the near future – only a question of will there be a further correction. Technically oversold positions should improve in the short term.

Positions

The  Positions Section (also at top of blog) has the latest buys and sells (Usually updated over weekends – will try to update last few weeks today) – These are positions I actually own

SELLING & BUYING

ETF Watch List

Current owned positions

• FXI (6% of portfolio) China – major technical breakdown of “head & shoulders trading pattern. Bought at @40 Now at @40
  
• EWZ (10% or portfolio) Brazil – Between 50 & 200 day moving average, but in correction. Bought at @ 52 & 59. Now at @67
  
• MOO - (10% of portfolio) Agriculture stocks – Moved below 50 day MA. Bought at 42 Now at@ 42
  
• IMAX – (2% of portfolio) – 3D movie theaters and future TV network. (Will keep adding on each dip) Now at 13.50

Since we are closer to -60 on the McClellan this should be a time to BUY rather than SELL 2010 is NOT going to be the kind of major bullish year 2009 was, but if we add when conditions are oversold you’ll do a whole lot better in the long run. The more oversold the better.

Traders should be able to do well today & early this week because of oversold positions.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

What Would You Cut?

Everybody’s answer or mantra is Waste . But then their minds go blank in describing what waste and how much of the budget that would impact. (extremely small) So lets look at the 2008 budget and you tell me where to cut.

Remember the defense budget has/is exploding higher. Because of our aging population, the next two biggest expenses (Medicare,Medicaid & CHIP) and Social Security are going to expand rapidly. Also debt is going to grow. That’s over 70% of the budget. Let’s take a look at the Safety Net programs that have declined for decades. Would you cut.

• Tax credits on children for moderate/low taxpayers
• Supplemental income for elderly and disabled poor
• Unemployment insurance
• School meals for children, food stamps, housing assistance, aid to abused and neglected children etc.

These programs “lifted approximately 15 million Americans out of poverty in 2005 and reduced the depth of poverty for another 29 million people.”

So what exactly would you or your conservative friend cut? Show them the chart . I did and it left one speechless on what to cut. What would you cut? More info on programs

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	-2.01%	up
NASDQ	-1.12%	up
S&P500	-1.89%	up
Russell2000-	-1.76%	-

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.

Three major events for week

1. Bernanke reappointment – Now seems likely (from latest Lexus/Nexis news search) = Bullish
2. Obama State of the Union - Is Obama all talk about shadow banks . Too early to tell . If not = Bearish
3. Earnings – As almost aways doing better than expected.

Significant indexes

• McClellan Index at -79.33 =  significantly oversold.  (see Sunday’s Investors411 for more)

FEARLESS FORECAST – Oversold markets will rebound on the Bernanke news, but could get spanked if folks believe Obama has the guts to break up the too big to fail shadow financial institutions. Obviosuly I hope he does. The short term hit to stocks is far better than another possible systemic meltdown where taxpayers bail out big corporations.

We are way oversold so expect a Bullish week.

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

As stated Sunday adding (10% to 20%) to positions because we are so oversold. See Sunday’s Investors411

Whenever I invest in an individual stock I try to set a 7% stop-loss.  That’s a price 7% below what I bought it for that Fidelity automatically sells the stock.

I’ve lost 7/8% on small IMAX & ENOC positions this year. Still own some IMAX bought at 12.9

Note – I’m far more comfortable with ETF’s than individual stocks.

ETF’s – I know its tough to take a chance and buy when everything is sinking, and may sink some more. Decided only to possibly risk 10% of portfolio.

• EWZ – (Brazil) Add 5%
• ? – Haven’t decided yet between EDC, ROH & TYH . All of these are high risk ETF that do 2 and 3 times the indexes they track – emerging markets and techs (Last 2) Would love to see further dip.
  

Will send out by email to group that has email address when I do invest .  If you’d like to get on this list send me an email .

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

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Elizabeth Warren – fighting to save the Consumer Protection Agency.

Wall Street vs Main Street

Wall Street is toasting Main Street. You’d have thought even after the huge financial meltdown that almost shattered banking worldwide the situation would change. It hasn’t -beyond preventing a worldwide meltdown. The situation in the USA has not improved. Back in 2009 Investors411 emphasized that economic problems – especially financials were “far far far far far bigger than first imagined.” This is especially true for the USA.

Because of globalization, and almost no financial rules governing shadow banks – what’s good for Wall Street is NOT going to be good for Main Street. Unfortunately, Americans are looking for quick solutions from politicians that cater far more to Wall Street.

The bottom line - America has grown for decades into a two tiered country -Wealthy vs Poor. This divide is increasing.

Matt Taibbi vs. David Brooks

These are two editorialists often quoted in Investors411 – Taibbi’s reply to a Brooks editorial Some real fireworks here.

Consumer Financial Protection Agency

Elizabeth Warren’s fight to save Main Street from the Shadow Banks headlines the Huffington Post blog. Ironically in the tight  Senate battle in Massachusetts the Republican has promised to  be the 41st vote to block this and health care.

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	-0.94%	up
NASDQ	-1.24%	up
S&P500	-1.08%	up
Russell2000-	-1.31%	-

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.

This was our second big volume decline within 4 trading days.  This time the volume was even more significant.  Usually somewhere between two and four of these “distribution” days where a lot of investors are running for cover signals a reversal in overall market outlook.  So we could have a substantial reversal (5 to 10%).

Intel’ s, The chip making giant, earnings report was the spark for the reversal. The stock itself was down @ 3%. But what set the stage for the reversal was the weaker than expected monthly jobs report.

Bulls do have amo on their side for US stocks (NOT the economy) to move higher.  The outlook for a quick economic recovery is looking  bleaker and that means the Fed will keep interest rates lower longer, Money (unless you want near zero rates) has no where else to go but stocks. Also, and meaningful health care reform is either going to collapse or be extremely week.  This will give a huge boost to stocks (not economics) that profit off health care.

• McClellan Index at -10.33 = Just slightly oversold.    @+60 or overbought territory & @-60 or oversold. This Oscillator has broken through strong BEARISH support @ zero (see chart). This is in the short term for stocks. NOTE -That if stocks  reach -60 or more this would be a BUYING opportunity.
• Baltic Dry Index – The BDI has moved higher for the last three weeks.  This is good news for world trade and especially China.
• US dollar – The dollar had been dropping for over 3 weeks and this had helped stocks. This all changed last Friday as the dollar soared +0.61% For more on all charts see STRATEGY sections
  

FEARLESS FORECAST – Bears paw prints are everywhere. Volume is starting to confirm the downside move. Between June and Nov. of last year 6 times the McClellan Oscillator reached -60.  It has stayed above -30 for over 2 1/2 months now. This does indicate a bullish stock bias. But we are long overdue for some sort of downside move. Forecast = Down week. However, the case for any meaningful reform from health care to financials (shadow banks) grows weaker each day.  This should temper any stock toasting

The Massachusetts Senate election will have an impact on stocks. Basically the Stock market likes gridlock and if the Republican wins the Dems will loose their 60 vote majority in congress and nothing will get done for at least the last 3 years of the Obama presidency. This means no meaningful regulations. It is a debatable point that Democrats alone would enact reform.

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

Proposed schedule (sorry, again, limited time this AM – took the Red eye flight from California) Will cover Stocks & ETF’s tomorrow.

NB – Investor411 is going to make few moves unless we get to very oversold or overbought positions

Weekly schedule remains – (Since Monday was a holiday  charts were the focus of today)

• Tuesday and Thursday – Stock Watch List
• Monday Fearless Weekly Forecast and focus on multiple charts
• Wed. & Friday – ETF’s Watch List

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

Long Term Outlook = CAUTIOUSLY BULLISH

A Fat Butt from Google (see below)

2010 Economic and Stock Forecasts

To make an overall forecast let’s look at the past decade and year & the mega trends So here’s the Good, the Bad, the Ugly.

The Good

• Emerging Markets – The regulated capitalist economics of emerging markets have exploded over the last decade. This is primarily due to globalization. But countries with abundant natural resources are also benefiting. From India to China, one generation worked 15 hour days in a rice paddy and the next were computer programmers. In fact many of these countries never even entered a recession in 2008 & 2009. Globalization has positively impacted billions of these people.
  
• European Union -  We used to be thought of as the melting pot, but this collection of countries and cultures now has the world’s #1 GDP.  Their tax rate is higher than ours  example Denmark @ 45% vs @US 37% – ugh) but they have great social services (example health care), live longer, less infant mortality, better health, @20% the crime rate, @ 20% the murder rate, no huge upcoming Medicare, Social Security or Deficit crisis. They are not perpetually fear mongered as in the USA and do not have an 200% increase in weapons budget (as we have had in last decade) to look forward to
• Free Markets are NOT self correcting – Perhaps this lesson has NOT been learned in the USA, but it has made an impact in the rest of the world . The bubble and bust stock/sector/country cycle of unregulated capitalism (“free markets”) has had a demonstrable and extremely negative impact when the tech, housing, & financial bubbles burst. The blind unregulated  pursuit of capitalist greed simply does NOT work. The Dow started the decade at 11,000 and ended at 10,500. Nobel Prize winner -  Joe Stiglitz lessons
  
• Economic Meltdown Averted – We stood on the edge of the cliff in 2008 and, at least for now, a catastrophic economic meltdown has been averted. Yes, many of the same individuals who helped cause the crisis also helped avert it.  Yes, government, that usually was a safety net for the poor, elderly was used to help the rich shadow financial institutions. Yes, government stimulus worked, but the deficit grew.  The rich have taken money from the working poor and the average taxpayer, but we all survived an economic collapse.
  

Coming up tomorrow the Bad and the Ugly

New Years Resolution

The Huffington  Post blog has come up with a great new years resolution - Why not put your money in your local community bank instead of those huge financial shadow institutions that created the economic meltdown? Your local bank is FDIC insured for $250,000 and their GREED did NOT cause the financial meltdown. Stop crying, whining and getting angry, but sitting on your butt (hopefully smaller) – Do something – invest in your community bank

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	-1.14%	down
NASDQ	-0.97%	up
S&P500	-1.00%	flat
Russell2000-	-1.27%	-

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

Technicals, Fundamentals & Analysis

Most Sections of blog have been revised (or are under construction for 2010) See Positions , Strategy , and Overview for changes

US markets got toasted in the last 1/2 hour of trading for the year.  Volume was again very light. McClellan Index at -1.62 = NEUTRAL

Friday’s monthly  jobs number is the major known economic event of the week. More and more analyst see a V shaped recovery.  While this, on the surface, is positive you start to worry about too many experts being bullish.

FEARLESS FORECAST FOR WEEK – A very good jobs number might actually be bad for stocks on Friday. It would set off fears that higher interest rates would happen sooner rather than later. Stocks usually do poorly when interest rates rise. Simply, potential investors see rising rates as a better investment the higher they go than stocks. Weak volume offers no clue to market direction, but the McClellan is headed lower -  so forecast – Up at start of week and decline at end. = FLAT Week

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

Sold all of UWM for +2% gain at years end

Coming soon – Results for 2010.

Long Term Outlook = CAUTIOUSLY BULLISH

Shock & Awe for Bears

The unemployment report Friday both shocked and awed Wall Street Bears and almost all economists . Even more than the startled jumping Panda. (Thanks David Fry for photo)

The dramatic drop in job losses coupled with a positive +2.8% GDP growth for the last quarter is certainly good news for every bull on Wall Street and Main St. Economic momentum is flowing in a positive direction both in the USA & especially emerging markets.

Why?

There’s good, bad, and ugly behind the positive economic news . Since, Obama’s Afghanistan policy is such a disaster (at least to those of you who have commented and Investors411 – See additional Clinton, Gates LINK [we're nation building & there for as long as it takes] and Friedman [against surge LINK ] on Talk shows over weekend) lets start out today with the good and give Obama some credit.

There are 4 major reasons why we have seemingly turned a corner. - TARP, emerging markets, printing money, and stimulus.

TARP – Bailing out Shadow Banks was started by Paulson/ Bush and continued under Geithner /Obama.  TARP is working better than almost everyone expected. Last week Bank of America announce plans to pay back $45 billion (plus interest)and losses far less than expected. See NYT. See LINK

Emerging Markets – They kept emerging, especially China. (see past Investors411) They’re the locomotive and we are the caboose.

Printing Money – The Fed just kept printing trillions of dollars faster than a super market buys toilet paper. The unusual part is investors from around the world bought truck loads of that toilet paper in the form of US treasury bonds with insignificant interest rates. If/when rates go up, boy will those  investors have a huge supply of TP to whip their ____.

Stimulus - Around the world governments stimulated their economies with programs. You can make a case for Germany & China’s program being better than ours, but Obama’s stimulus (he was limited by Republican opposition) was relatively good.

Remember the old story of you can give a poor man a fish or you can teach him to fish. Well, economists have ways of measuring just how stimulative throwing money at a problem is. Does your dollar buy  even one fish or lots of fishes?

• The Republican mantra is always cut taxes – Mark Zandi , economist from Moody’s and a McCain’s economic adviser “making all the Bush tax cuts permanent and cutting the corporate tax rate–would raise GDP by at most 37 cents for each $1 of revenue loss. ”
  
• Obama’s stimulus – “By contrast, increased outlays for infrastructure, aid to state and local governments and extended unemployment benefits increase GDP by between $1.41 and $1.57 for every $1 spent.”

The bipartisan Congressional Budget Office measured the whole thing and you can find more on why/what stimulus worked at LINK

Common Sense – Yes there are time tax cuts work especially targeted and in a recession.

But, when you cut taxes to a company you never know where that money is going to go – Fat bonuses for executives, a new home in Dubai (the global sex slave capital of the world), buying financials WMD’s (Warren Buffett’s term for Credit Default Swaps) or sometimes even good stuff like into research & development.

What you want to have happen is DEMAND increase for your product. The more money flows, the more demand. The reason you see sources like CNBC, right wing polls and think tanks always call for tax cuts is they control the companies or the companies are their big advertisers/sponsors.  Greed is good for me is their mantra.

KISS & STOCKS

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage percentage	Volume
Dow	+0.22%	up
NASDQ	+0.98%	up
S&P500	+0.55%	up
Russell2000-+2.38%		-

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

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals, Fundamentals & Analysis

Economic Bears were shocked and awed at the fall in unemployment. Great news for Main Street USA, but we have a deep deep hole to climb out of.  This is mixed news for US Stocks.

The news is mixed for Wall Street, because good economic news in employment means the government/Fed will probably stimulate less. Therefore,  financial companies will no longer be able to borrow for nothing,  and their interest rates will rise sooner rather than later.  The dollar also gets stronger and those companies making more because the cheaper goods sold faster overseas will cost more – looss demand & profits.

Technically we had HUGE volume accompany a price rise. Unfortunately, for most major indexes the rally was less than a significant 1%. Stocks first went way up, then down and settled for moderate gains.

Small cap stocks, are more dependent on a recovery on Main Street did gain a significant +2.38% Bigger companies have more contracts abroad.

Fearless Forecast – Last weeks unexpected positive jobs number helped create a positive week. Investors predicted a flat to down week. Oops. This week we should be all over the place, but some solid economic fundamentals are coming into the light. This should help stocks in the long run. Once the dollar calms down (expect it to rise and gold to fall) we should improve. Flat to up week .

Now going to get a bit more technical

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

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI a small rose +45 points yesterday and closed at 4107. Technically  the BDI broke out through its major resistance level 4291 (this year’s high) over a week ago.  The BDI has rallied about 1800 points since late September. After 16 up days in a row, 9 down days in a row & now up 3 days in a row. Multi day moves in one direction are common and the decline in rate of change usually signals a reversal.

What it means – Long term we created a higher high on the chart = Bullish. The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets. After, what looks like a technical correction we are agin moving higher.

——-

The Dollar is currently the #1 forecasting tool .

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar. Mantra – Dollar up = US stocks down & Dollar down = US stocks up US dollar rose an ENORMOUS +1.44% Friday . Anything close to or over +/- 0.50 is significant  The dollar closed at $75.59 .

The dollar’s rise did temper the rally, but the whole dynamic or fundamentals have changed. See Positions below.

——-

$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at +23,51 This is a Slightly Overbought Position . This chart is showing we seemed to have reached a plateau. It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 .  There has been no clear buy or sell signal for over a month.  Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell

The closer we get to +/- 60 the better our chances of making money with a shorter term buy/sell signal

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

(again a little behind on latest moves)

We’ve had, and volume has confirmed, a quantum shift in markets. This may be temporary and it may be long term, but it necessitates major changes in positions.

Today is a confirmation day for Friday’s move.  More than anything else – looking for dollar to hold or add to gains.  Will buy some ETF’s and stocks until McClellan says we are overbought (@+60)

Recommended ETF’s and Trades

SELLING

GLD – Investors411 sold all of DGP several trading days ago and 1/2 of GLD on Friday. Last entry into this position was at $92.7 .  Traders should sell the rest and longer term investors could hold onto last 1/2 position (5% of portfolio).

Gold will rise again, but for now there is just too much downside momentum. Will be back into GLD & GDP late.

NVS -The flu scare is over. Thenumber of states that have serious flu has dropped from 43 to 25. Time to take profits on last 1/2 this position. Let’s take our profits 21+%

AMZN – Taking profits. Markets rallied yesterday and AMZN dropped 2.54%. Never a good sign to see NASQ rally 1% and your tech stock drop. Again, this in part, was a flu play. Why be greedy we have about a 16+% profit.

BUYING

FXI – Adding more to this positions. If Main Street is recovering faster than expected, so will China. Their currency & exports is tied to the dollar. So in one major sense, their recovery is tied, in part, to the USA. They have under performed major USA indexes recently.

IWM or UWM (an ultra fund that does basically 2x IWM) These ETF’s both track small cap stocks (Russell 2000) IF, Main Street is recovering faster than expected they should outperform the other indexes. They have under performed so far and should,like China, make up soe lost ground relative to other major US indexes.

BAC – Bank of America. They’re paying back TARP shows solid fundamental strength. (I know they are a shadow bank bad guys) Bought BAC Friday.

Start small & Build your position – Buy the dip.

Again any stock investment or ETF that doubles or triples what a normal ETF does is a short term play for traders and short term investors – NOT long term Investors .

Long Term Outlook = CAUTIOUSLY BULLISH

The 2nd Maine Militia’s Gazette

To paraphrase the 2nd Maine Militia (See Nov. 17 blog) it’s not about left vs. right, Democrat vs Republican, but up versus down . So let’s take a look at a brand new news outlet only found here  at Investors411. In the style or philosophy of the 2nd Maine Militia – here’s how their paper might look.

• Headline – Crisis in Duba i – Thousands have died (from Bangladesh, Philippines, India and other poor countries) building a wealthy playground for the uber rich Arabs. A place where wealthy Americans and Iranians can rub elbows built on the backs/lives of third world labor.
• The private company that created this years hottest American holiday present the Zhu Zhu dolls/pets has just announced a proposal for three new factories. Sorry no factories in Maine or the USA – they’re all in China.
• Front page editorial-Keeping the Masses Distracted – Will someone tell us why CNBC and CBS business news feature stories are -  the selling of Michel Jackson’s rhinestone glove, the scratches on Tiger Woods face (wife or car accident) & the latest block buster teen vampire movie?  This is America Corporate media news.
• Another local bank collapses . The big shadow banks that caused the financial meltdown are getting bigger with our money while their competition – the small local Maine/USA banks continue to fail in record numbers.
• Guest editorial from Robert Reich – The 3 classes of Americans – #1 Those 25% of Americans whose kids are on food stamps, #2 those Americans who are managing, but worried about loosing value of homes & jobs #3 Those few Americans who have taken home even more winnings since 2007 like Goldman Sachs executive. LINK

Some of you may think that our fictitious Gazette is over the top. It does focus on the ugly side of globalization and unregulated wealth creation (sometimes  misnamed capitalism or free markets). It does pacifies the reader with obsessions about celebrity.  Maybe the scratches on Tiger’s face is what will solve the humanities problems and just maybe you’ll think about forming your own 2nd Maine Militia.

KISS & STOCKS

Keep It Simple Stupid

For those of you whose eyes gloss over in the stock section I’ve tried to KISS it today, but I left a little in for those who want the deeper analysis

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-1.48%	down
NASDQ	-1.73%	down
S&P500	-2.10%	down
Russell2000	-2.53%	-

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals, Fundamentals & Analysis

For the moment the Dubai economic meltdown has stabilized because oil rich Abu Dhabi has promised to bail out the over leverage Mid east playground for the ultra  wealthy.

Big predictable economic news for the week is Bernanke’s approval hearings in front of congress, Obama’s more troops for Afghanistan and the monthly jobless figure on Friday

Black Friday saw a significant increase in traffic and only a o.5% gain in sales according to early reports. reports. Today is Cyber Monday where shoppers do a whole lot of on line Xmas shopping (start of the online buying season)   These numbers are Bearish for retail stores. It probably means far more people were out seeking the bargains and they will do less shopping for the rest of the holiday buying season.

The dominating factor controlling  stocks prices continues to be the dollar.

FEARLESS FORECAST – Last week’s fearless forecast of an up week was crushed by the Dubai crisis .  Markets have rebounded from Dubai across the world and the damage seems limited in investors/traders minds. Looks like we will return to general trend of dollar down and stocks up till Friday’s job numbers. – Outloo k – flat/down week.

Coming up more on - Military escalation in Afghanistan & growing problems with Iraq. Any attack on Iraq would send the dollar higher and stocks lower . Perhaps Obama’s announcement of 30,000+ troops in Afghanistan will have same impact.

Now going to get a bit more technical

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

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI has broken out to new yearly high

The BDI fell -145 points yesterday and closed at 3994. Technically  the BDI broke out through its major resistance level 4291 (this year’s high) over a week ago.  The BDI has rallied about 1900 points since late September. Now, 7 down days in a row & through the former resistance and now support level 0f 4291.

What it means – Long term we created a higher high on the chart = Bullish. Short term we are on the way down = Bearish The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets.

——-

The Dollar is currently the #1 forecasting tool .

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

US dollar rose a HUGE +1.00% Friday . The dollar closed at $74.98 . The $75.00 support level crashed and burned on Wednesday but, T he Dubai crisis is going send money back into the dollar and out of the stock market.

——-

$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at -27.62 This is approaching an Oversold Position 

Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

I did get a chance to do some editing in the Positions Section of the blog. ( Note 2 added positions)

From Friday – Probably going to take some profits today (sell 1/3+ positions) in FXI, EWZ, GLD & all of DGP. Hopefully, will get a chance to buy back into these positions when the McClellan Index gets oversold. Personally I did sell/take profits on 1/3 of FXI & all of DGP .

Long Term Outlook = CAUTIOUSLY BULLISH/NEUTRAL