Looking at  pretty pictures – reference below *

Drawing by 8 year old granddaughter Emma

The Glamor of Greed

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Andrew “Andy” Grove,

Andy Grove the co founder of Intel uses a different title than The Glamor (profitability) of Greed. This former CEO calls his editorial “How to Make an American Job Before It’s Too Late” Grove uses the same megatrends Investors411 uses.

His editorial is a well researched, clear, outlined and offers a job centric solution. Here are some major points. [Many thanks to Robert Howetser who is a sometimes contributor to the comment section of blog and brought this editorial to my attention.]

• The Bay Area in SF (Silicon Valley), the innovative machine of the country hasn’t been creating jobs in the USA lately. It has a higher unemployment rate than the rest of the country.
• The scaling process is no longer happening in the US And as long as that’s the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs.
• From Apple to Dell computer there is a 10 to 1 jobs ratio for former (Silicon Valley) high tech jobs in China vs. the USA. The largest of these is Foxconn ($62 billion in revenues – makes and assembles for Apple, Dell, etc.) and employs more people than the combined worldwide head count of Apple, Dell, Microsoft, Hewlett-Packard Co., Intel and Sony Corp combined.

Without bringing scaling back to the USA, American companies are going to continue to make profits by shifting jobs abroad. –  That why Grove is calling for a jobs centric government.

“We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars — fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations…”

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 for week - Fundamentals rule. Old fashion fundamental earnings analysis dominates as earnings season kicks off big time next week. “Double dip recession” has become an investment mantra starting in Europe and now echos worldwide.

Technically the benchmark S&P 500 is down 9 of the last 10 trading days and way overdue for at least a  technical short term rally. = Bullish

The BDI See below) is still in free fall (-47% see below) clear evidence of worldwide economic  (trading) meltdown. = Bearish

Pre market trading in Europe & China is way up @2% (as of  8:00 AM EST)Those of you who took Friday’s read of the tea leaves to heart (you had to love risk) and bought as markets dipped at close – should at least be rewarded in the short term this AM. = Bullish.

*Looking at Pretty Pictures-

Technical analysis is looking at pretty pictures or patterns of stock charts. None quite as wonderful as a grandfather’s view of his 8 year old granddaughter’s work. Who knows why technical analysis works? Perhaps

• We are all creatures of habits, and the trading herd follows patterns
• So many folks think it works and therefore it does.
• We all like to look at pretty pictures.

The bottom line – Investors411 on the right side of the blog offers different financial  charts. Also daily updates on certain charts in text of blog each day.  Those charts on the right side of the major US indexes all show one pattern – a series of lower lows and lower highs for stock prices that started on April 23 2010. If you’re a Bear you love this pattern.

We are currently in one of the lower lows of this pattern.

Fearless Forecast for the Week-

Some kind of technical rebound seems inevitable. If it doesn’t last at least couple of days we’re in big trouble. Some poor earnings results may already be built into stock prices. The accelerating downside of the BDI is a gathering storm. What to watch for is how the markets react to the first few earnings reports. How markets react to news is usually our #2 indicator (see STRATEGY Section on top of blog)

Best read of tea leaves - Good start poor finish = down week.

Significant Indexes –

There’s hundreds of charts, oscillators, systems out there to measure trading patterns and flows. The BDI & MO were chosen because they work extremely well right now for different reasons. (Click on STRATEGY section at top of blog for more) The dollar accuracy as a forecasting tool was shaken last week. If it’s accuracy rebound’s Investors411 will continue to use it.

• McClellan Oscillator (MO) fell a we bit to -53.38 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. In May the MO reached two lows – one at -120 and the other close to -130. Therefore, potential for more downside risk. Even after last week’s disaster for stock the MO is still NOT below -60.= Still NEUTRAL, but almost oversold
• US Dollar –  The dollar rose a bit +0.19% Friday [Anything over +/- @0.50 is significant.]  Mantra - right now is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, that make up 80% of all trades, have used the inverse relationship of the dollar as a key part of their trading system. Last week this got crushed by bad fundamental news as regular investors fled the market. Dollar flat last two days. = Neutral
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also good proxy of China) BDI is in free fall from a high of @4200 to  2216 yesterday.( This is a huge -47% drop in 6+ weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI fell -2.81% Friday. Rate of decline increasing as it nears support level. Looks like support level will get crushed today =Bearish

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekends – Investors411 holds NO POSTIONS at this time.

Shoudda, Wouldda, Couldda -

Last Friday Investors411 reccommmended a buy if markets dippped for those willing to take risks. It does look like this trade is going to make $ at the open and perhaps throughout the day. More tomorrow.

Long Term Outlook =CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Robert Kuttner

Financial Regulations

D. In the comments sections brings up a generally favorable view of the Financial Regulations in the NYT. Here’s another glass is half full view from left wing TalkingPointsMemo. This is certainly, the most significant financial reform package in decades but it does NOT solve the major Too Big to Fail and transparency problems. Nor does it address problems within quasi government institution – Fannie and Freddie that are singlehandedly holding up the US mortgage market. That comes next.

Also much of what is legislated depends on regulators. Tea Party Patriots ’s basically want NO regulators/regulations and the Obama administration has a far less than stellar reputation in regulators and regulations (think BP)

In a past Investors411 the Baseline Senerio revealed 4 largest shadow banks have $7.7 trillion in assets. Imagine what happens if a $2 trillion dollar over leveraged shadow bank goes down – one 5 times the size of Lehman Brothers. Simon Johnson, today, explains how JP Morgan has made itself invulnerable to financial regulation

“The reason global megabanks will get bailouts in the future is simple – policymakers will fear the chaos that would ensue when competing bankruptcy claims swarm over a defaulted institution, much as happened for Lehman (e.g., in London) in September 2008.”

The fact that Shadow Banks lead the markets higher Friday is verification that investors (those who put their money down, instead of talk) think shadow banks won.

America Speaks

America Speaks is a “bipartisan” organization that organizes American town meetings. It just had major Town Meetings across the USA on June 26th. This group was founded by a Wall Street mogul and two foundations. They “scientifically selected groups” came up with some “overwhelming” eye brow raising results.

• Raise tax rates on corporate income and those earning more than $1 million.
• Reduce military spending by 10 to 15 percent,
• Create a carbon tax and a securities-transaction tax

Bob Kuttner also goes into depth on America Speaks and Jobs Jobs Jobs.

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 for week - ” Any analysis of stocks has become an analysis of what the “Black Boxes” of  huge institutions with their high frequency trades & computer algorithms are doing.” They make up 80% of trading and right now the huge currency markets are dictating their moves.

The Upcoming Battle-

Friday’s Investors411 Outlined the sides in the Upcoming Battle. Stock Market /Currency Trading War Broke Out Friday. Major US markets had  an above average big, increased volume day - so both sides committed lots of troops (buyers and sellers) to the fight. There was lots of blood

The green army (long stocks & short the dollar) launched the first attack – led by Shadow Banks GS & JPM (the whole banking sector rose almost 3%) The dollar took it on the chin and is now sitting a mere $0.24 away from its rising front line/support level.

The red army (short stocks & long the dollar) got caught a little off guard, because so many technical analysts predicted the downfall of stocks. Despite being beat back as the dollar fall (see below) and stocks pushed marginally higher the red army support levels have held.

The MO is NEUTRAL. The BDI has turned flat So No advantage for either side here. In fact BDI’s possible turn slight advantage to greens

For fundamentals details of last week and this week see Jeff Miller in Seeking Alpha or on Friday’s monthly jobs report ( the big news of the week) and another outlook by SA’s Ophir Chandor

Fearless Forecast for the Week

Just about every technical analyst out there is bearish for stocks. However if bulls (the green army) can build Monday on Friday’s modest gains in big volume then they have a shot at moving markets higher. Last week too started out with China announcing a currency devaluation, only to learn that this was no wher near as substantive as first though.

The Shadow Banks victory in financial reform should help bulls.

Housing figures are in shambles. Investors411 mantra over the last two years has been the economic worldwide situation created by the US Shadow banking 2008 meltdown is “far far far far” worse than expected. Logic says that Friday’s employment numbers will be worse than expected. Bears should growl.

The Shadow Banks have reinforced the bulls and if they can get a follow through rally today this could help stocks for the week.

The key again is the US Dollar/EURO relationship. UUP (ETF that tracks the dollar) is the key to watch. Since there are so many expecting markets to tumble, if the Dollar breaks through support you could see a sharp rally as Black Box investors “buy to cover their short positions.”

Happy to be on sidelines for this war. Best read of tea leaves is a contrarian up/flat week into lackluster jobless figures.

Today is day 2  of the dollar falling to a key support level war. Day 1 was dominated by the green army.

Significant Indexes

• McClellan Oscillator (MO) rose significantly to -1.34 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works.= NEUTRAL
• US Dollar –  The dollar fell s yesterday -0.57% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Dollar up = stocks down and visa versa. The dollar has fallen for the last 3 weeks, but has consolidated (traded sideways) over the last 6 days as the 50 day moving average/support level moves higher. This is where the Black Boxes have focused their attention. Dollar at $85.28 directly above major support/ 50 DMA at $85.04. Friday’s drop = Bullish
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped. BDI is in free fall from @4200 to  2501 yesterday. This is a huge -40% drop in 6 weeks.  Often a leading indicator for stocks. Now at/just above a major support level. Rate of fall declined again yesterday. This index often makes slow changes, so diminished decline  could be the start of a reversal. However, clearly long term. (decline from 2502 to 2501 is smallest possible)  = Long Term Bearish Short term Bullish

Positions

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

Have not yet had a chance to Update over last 2 weekend but there are NO positions held at this time.

Still watching DGP (ETF that’s double long gold) for a dip close to its 50 DMA) – Will buy.

Don’t plan any buying or shorting (ETF that short the market) until MO reaches overbought or oversold

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

What’s happened to the Change We Can Believe In?

Obama – “I was Wrong”

Obama has admitted he was wrong to trust BP in his mea culpa on the gulf oil disaster. He’s obviously also wrong to trust that shadow banks will act in the interest of the USA. Even Apple or Google (for all their good PR) bottom line is their profits. What we need is a regulator of regulations that prevent greed from running wild. (See Popeye’s comments)

So Obama – Do something and stop dithering. There is a myriad of choices besides correctly blaming BP/Transocean for the disaster.  Solutions from take them into temporary  receivership to adding a tax on gasoline to pay for the clean up. You could create hundreds of thousands of jobs hiring more people to clean up the mess.

Fed Manipulation of Currency

The admission that our Fed is manipulating the currency market is really no surprise. Investors411 has suggested this for weeks. What is a surprise is that the German Finance Minister Rainer Bruederle has openly admitted it.

Bottom Line is Bernanke manipulates currencies. This may be totally unconstitutional. Stabilization of the dollar/Euro relationship is in short term = Bullish

Turkey+Israel+Gaza = Crisis

Israel has boarded Turkish ships 80 miles from the coast in international waters. This was much publicized relief effort for Gaza. 9 protesters died including Turkish citizens. Some ships were taken to Israeli post. Turkey is a member of NATO who has very specific treaty obligations about “acts” committed against its members.  This includes treaty relationships with the USA. Reports “Total Rupture” of Turkey/Israeli relationship possible. Other ships on the way to same area. = Bearish

This situation is developing minute by minute Google “Turkey Israel” for more

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

Markets down in light pre holiday trading and news of lowered Spanish bond rating = Bearish

The admission that our Fed is manipulating the currency market is really no surprise. What is a surprise is that the German Finance Minister has openly admitted it. Stabilization of the dollar/Euro relationship is in short term =  Bullish

Fearless Forecast Last Week = “Down Week” Dow was down, NASDQ was up.

Fearless Forecast This Week – Fed manipulation of currency make a forecast almost impossible. North Korea, BP oil disaster, and now Israel/Turkey/Gaza makes for a lot of negatives = Down Week.

Significant Indexes

• McClellan Oscillator fell to -26.55 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is in NEUTRAL territory, but we are now out of WAY oversold territory. How the MO works.
• US Dollar –  The dollar rose  a significant +0.54% [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 to keep the Euro from falling = Bullish.

Positions

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

Have NOT had a chance to update last weeks trade.

So far for YOUR stock List OSTK (Overstock.com) BIDU(China’s Google) & SAM (Sam Adams Beer) have all received at least three votes to be new stocks in YOUR stock list.  Last chance to submit  entries. Room for a couple more.

See Paul R’s insightful comments on SNDK and other stocks in comments section of blog.

.

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Nassim Taleb – “BlackSwan”

Black Swan

There are many doom and gloom prognosticators out there. There are a lot of Johnny Sunshine’s too. Paul R comment’s are today’s editorial. Checkout the other excellent recent comments too. I strongly urge you to also read the 10 points in his referenced Financial Time article.

“Back on Feb 10 Barr mentioned the “Black Swan”. I caught the Wall Street Journal Report on TV last week and they interviewed Nassim Taleb author of many Black Swan articles.

A quick search of the net for “black swan” I found his recommendations for a black swan proof world. LINK

http://www.fooledbyrandomness.com/tenprinciples…

I really like #2.

2. No socialization of losses and privatization of gains. Whatever may need to be bailed out should be nationalized; whatever does not need a bail-out should be free, small and risk bearing. We have managed to combine the worst of capitalism and socialism. In France in the 1980s, the socialists took over the banks. In the US in the 2000s, the banks took over the government. This is surreal.”

Bottom Line – Nassim Talib – who was right about the 2008 meltdown wrote this article on April 7 2009.

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

Markets recovered a bit on Friday. Some of this may be options expiring.  Nothing to get excited about because as state Friday major support levels and trend lines have been broken.  This usually means the worse is yet to come.

We moved higher because markets were way oversold (See McClellan Oscillator)

Fearless Forecast Last week – Down market at beginning of week and rally at end – was right. But overall prediction of “up week” was obviously toast.

Fearless Forecast This Week - Trend lines and major support levels have been broken. I think European Central Banks like our Fed and Treasury will do whatever it takes to stabilize the Euro.  But the long term damage to their GDP is significant and impacts the world. Hard to see a market recover if GDP is falling. Systemic problems in capitalism and social welfare have to be fixed and this is going to hurt. More investors realize this and sell this week.= Down week.

Obviously expect a roller coaster ride again. Idiot Democrats and Republicans have NOT fixed the “too big to fail” or over leveraged problem that got us into this mess. About 1/3 of the Senators get it – Those that voted for Brown/Kaufman legislation.

Significant Indexes

• McClellan Oscillator rose to -90.99 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is OVERSOLD territory. = Bullish. Repeat -Hate to say this, but once the trend broke this index has become less effective.
• US Dollar – Friday the dollar fell again to $85.36 Down a significant -0.52% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important . . Obviously European & other Central Banks are stepping up to buy the Euro.  Looks like this will stabilize the Dollar/Euro relationship at least for now This is good news but markets have failed to move higher on good news = Bearish
• VIX- The “fear” index is at 40 and back in Oct. 2008 it reached 90. We have a ways to go before we reach 2008 fear levels.

Stock markets are totally ignoring their record oversold conditions and the drop in the dollar. Major trend lines have been broken. Bad reactions to good news is a powerful warning sign that the worst is yet to come. Technically, Friday’s gains need a confirmation and trend line reestablished before going long.

Positions

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

The whole positions section has been refurbished. Many thanks to one of you who wants to be anonymous who helped.

Usually most positions have stop/loss orders 5 to 7% below what they were bought for. The 12% loss in UWM was due to the fact that UWM gapped lower the next day. The huge 40+% gains in IMAX was because they wee bought months ago.

Forgot to mention Friday a 2% position in VCI.

Purchases made on Friday all have stop/sell orders on them at or @2% below the price they were bought for.  Except for 50% of IMAX. and 100% of VCI. Their stops are a bit lower.

NB – Would NOT invest now, but if you are an experienced short term trader you could nibble. – Only on huge dips. Don’t make the mistake I did and hold short term positions over weekend. Get in , make 5+% profit , sell 1/2 and let the rest ride, or get out.

Friday – we saw the Dow dip 100+ points even after the McClellan Oscillator was at a record low of -136. So the dip would have too be quite large before nibbling again.

Bottom Line – Now is not the time to think about going long but  to start to think about using SDS and similar ETF’s that short the market (2X short S&P 500) in a rally.

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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The Energy Problem

Here’s the energy problem the world has to solve – The question is how. From May 24th’s Forbes – “Worldwide electrical generation is projected to increase 77% by 2030″ according to energy Secretary Steven Chu.  That’s just electricity.

How does the world and the USA as a nation meet this energy demand?  It takes 10+ years to get a possible wind farm off the coast of Massachusetts that in the end will produce 1/2 to 3/4 of the electricity for Cape Cod.  It’s easy to make a case against off shore drilling or nuclear energy, Build a case for a viable solution.

Any takers?

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

US markets dropped as The Dollar rose. The rise in the dollar vs. the Euro is anchoring or pulling stocks lower. This is the dominant theme driving the market.

Volume rose, but was only slightly above average = Mildly Bearish

Markets rose in the last 30 minutes of trading = Bullish

Nothing really happened over the weekend in Europe, but the NYT is headlining Fears Intensify That Euro Crisis Could Snowball = Bearish

Bottom Line - Almost everyone is short the Euro and long the Dollar = The dollar is going to go up & this is going to negatively impact stocks. However, technically, the dollar is more extended over its 50DMA than any time since 2008. If it goes up about another $2.00  it will reach a strong resistance level (the old 2008 highs).  This should at least in the short term, should stem the fall. (see chart below) = Bullish

The McCellan Oscillator has reached OVERSOLD territory = Bullish.

Fearless Forecast Last Week = “Up week” – Correct call

Fearless Forecast This Week = McClellan is OVERSOLD Territory and the Dollar is Overextended from its 50 Day Moving Average.  We may see a wild roller coaster ride, but by end of week stocks should inch higher.

Best case senerio – Stocks fall early this week as dollar rises and we get closer to @$88 resistance level for the dollar. The McClellan goes lower. This would set up an even better buying opportunity.

We have now entered Buy the Dip territory, especially for traders.

Longer term  Investors- The Euro, as the NYT article states could snowball lower, but at least temporarily, there is a short term trading opportunity that could be presenting itself. The dollar is what to watch.

Significant Indexes

• McClellan Oscillator fell dramatically to -65.45 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is OVERSOLD territory. Bullish
• US Dollar – rose +1.00% yesterday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important Dollar Rules because it broke out to new high is a significant move. = VERY BEARISH

Positions

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

Investors411 exited all positions mentioned Friday as market opened.  The only ETF position left is 5% in UWM bought two Friday’s ago.

Investors almost also has all the stock positions from YOUR Stock List. Sold 1/2 of SNDK at open on Friday.

Since the McClellan is oversold - we’ve reached Buy the Dip territory. (see above)

Longer term traders – every time we get below -60 on the McClellan its time to nibble.  The further below the better. The recent low was -123

Yes, best read of tea leaves is for markets to move lower at the start of the week. If your panicked about loosing some $ in the short term, sell at the open.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

-

EU Massive Bailout Package

The European Union & the IMF have done what they had to do to, at least temporarily, to  avert fears in Greece & Europe. From NYT

“European leaders agreed to provide a huge rescue package of nearly $1 trillion to combat the debt crisis that has engulfed Europe, and central banks began injecting cash into the financial system.”

This has sent European stock markets soaring & the US is following. Judging from the  reaction of traders and investors this plan has enough fire power to work.

More Analysis from Seeking Alpha – Too Much Too Late. & Greek Bailout Plan Increased by a Factor of Five

Like the USA the EU has chosen to use further debt to solve a debt crisis and to avert a global financial meltdown.

Nuclear Power (Round 3)

From Yankee Bob [Bolding/color by editor]

Dear John,

Wind, solar and geothermal only need gov. subsidies to level the playing field. All the fossil fuels and Nuclear are HEAVILY subsidized by the gov. so that taxpayer aid should be factored in any cost comparison.

When they, the fossil fuel industry and their apologists, show you cost comparisons,the fossil fuels are cheaper then clean energy. But they have not factored in the tax payer subsidies that the fossils get and dwarf what the clean greens get. They also don’t factor in the tremendous amount of water the fossils consume and waste.

If the coal industry is allowed to mine all of the Powder River Basin, there won’t be enough water in Wyoming left to support life. How many fish kills have the Nuke Plants caused? What happens if there is a terror attack on Indian Point? Can you really evacuate the NY Metro area? Why is the cost to decommission Nuke Plants not factored in to operating costs and why should the taxpayer be left, always, with that bill?! Show me one Nuke plant that opened on time and under budget  and lowered the electric rate!….

This editorial is continued here or in comments section of blog.

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

Major markets fell again in massive volume. From Friday “On a pure technical basis we are near the end of the downside move.” The last two days of massive volume technically shows a classic selloff.  In laymen terms – almost everybody that’s going to sell has

Europe’s massive bailout package has seemed to positively impacted markets this AM (See above) = Bullish

How this works technically is that a massive amount of traders short the market + Almost everyone who was going to sell has. This creates a position where few sellers are left and the vast majority of traders are short (betting the market is going to go down). These shorts are forced to buy  to cover (buy the stock because they will loose money the higher it goes)

This is all one big fear/greed play and pre-market indictors are way way up. Dow +400 points. European markets up 4 to 9%

Last Weeks Fearless Forecast – “Down Week” We got toasted

This Weeks Fearless Forecast – “Up Week”  (see EU Bailout above) Not a difficult call with pre markets up +400 on Dow

Fundamentals (Europe Bailout and good US employment numbers) are too big to ignore. Markets have technically reacted. Because of the massive move in Europe and pre markets, everything is going higher.  We should get on the rally train at the first dip.

• McClellan Oscillator rose to -123.10 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. – In the last three years the MO has only reached pass this level 3 times –  10/08, 3/09, & 10/09 = We are way oversold = Bullish
• US Dollar – fell  -0.30%.  [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules. Rising dollar almost always = falling stocks. The bailout is going to send the euro much higher and consequently the dollar much lower

Positions

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

How The McClellan Oscillator works

Simply the more stocks get over sold the better the odds are of technically making  some sort of gain. The only time the MO had dropped lower (-123)was in the 2008 meltdown.  So it showed us the odds were in our favor. They still are till we reach zero. Only at zero or the 50 DMA change the odds to @50/50.

Investors411 – On Friday near close Bought 2% more IMAX at 17.25 & 1% of ESRX at 97.10. See Friday’s update. Sure wish I had invested more on Friday. Unfortunately, like everyone else, I was fearful.

Will invest 5-10% more in ETF’s early, on the first dip or end of day. Be moderate, don’t get too excited. Remember lots of this initial rally is short covering.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Sherod Brown – Senator from Ohio – A new major player in financial reform

Rules based vs. No rules Capitalism

The 2008 worldwide economic meltdown, cause even Alan Greenspan to realize that markets needed to be regulated. Let’s look at -

Three Major Entities in this drama.

• Rules based companies – They create or deliver products – P&G, Chevron, Apple, UPS, GM, and even that wonderful artist who you should buy from. Sure, all companies have some sort of problems and may fudge or break the rules, but they produce and /or deliver products. Their profits are based on the products they produce, deliver and services they maintain. They use more transparent accounting.
• Shadow based financials – They profit from leverage – A needed commodity to foster growth – AIG, BAC, Lehman Brothers, GS, & Citigroup. This is the group that got itself over leveraged because it was unregulated. Instead of being leveraged 10 to 1 (loans to cash) many in this group reached leverage near 100 to 1 using unregulated credit default swaps etc. . So when Lehman collapsed the whole  financial & economic world went with it to the brink of financial collapse. This is the group that most want no rules capitalism or “free markets.” There are, of course, smaller banks that did not get over leveraged.
• Taxpayers – You benefit and support each group by buying their products or entering into a loan. All this is a necessary part of a growing economy. The problem enters when the profits gets privatized and the risk gets socialized you and your children  pay.  Now the Shadow banks that are fighting to stay in the shadows.

Major Political Players in Congress (for sources on lots of this see past Investors411 or OpenSecrets.org

• Chris Dodd (Dem. CT) – head of powerful Senate financing committee. The Senate’s important because it has the filibuster/ 60 vote rule. Senator Dodd snuck in the rule that bailed out shadow banks could get their executives bonuses. Democrats on his committee have created (weak – my opinion – see past references to Simon Johnson and Baseline Senerio) legislation to try to fix unregulated shadow financials
• Mitch McConnell (Rep) -Minority  leader of Senate. Met secretly with 25 Wall St. Shadow bank types and #1 contributor is financial institutions.  He’s trying to unify Republicans against the Dodd reform Bill.  The Republican line is “complete and deliberate misinformation.”
• Senators Kaufman (D -DE) & Sherrod Brown (D – OH) – have a strong bill forcing the elimination/downsizing of the too big to fail banks. They have some support, including Fed governors, but not enough. Dodd holds all the strings.
• Blanche Lincoln (D Ark) – has introduced a bill to regulate what Warren Buffett called Financial Weapons of Mass Destruction – Credit Default Swaps.

Obviously the Shadow institutions and their lobbyists want to stay in the shadows. Most taxpayers want reform. You do have a group in congress who say leaving everything alone, let them fail and bring on the second great depression.  This is all getting played out this week in congress.

Fed Governors have jumped on the  elimination/downsizing too big to fail banks bandwagon, but Dodd is a consummate political pro who is in bed with shadow financials – remember, he granted them bonuses. Most Republicans want a weak reform bill and have historically voted against regulations.  Many traders are also putting their money on/investing shadow banks by buying their stocks.

For the latest see Simon Johnson’s piece last night

Here’s my home town’s Bob Kuttner on the differences between Republicans & Democrats

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

Giant institutions are buying stocks on dips like the Cookie Monster eats Cookies.

Five straight rally days in a row. Markets moved higher in decreased volume. This has been a usual occurrence for stocks over the last two months. Historically, moving higher in deceased volume is indicates BEARS rule, but that’s not the trend. So we go with the trend = Bullish

You don’t need a weather forecaster to know which way the wind is blows. Even with 5 up days in a row the wind is still with the BULLS

Last Weeks Fearless Forecast – “Down Week”- Goldman Sachs, Greek debt spreading, fears of financial reform and even a volcano couldn’t hold the Cookie Monster down = Bulls Rule.

This weeks Fearless Forecast – The problem here is so many analysts see markets moving higher. Since the McClellan is not yet near oversold prediction is for an up week. Beast single reason for this call is stocks keep moving higher despite bad earnings news in giants like MSFT, AMZN and former tech darling QCOM.

Earnings reports hot and heavy this week & the Fed makes its usual announcement on Wednesday at 2:15 EST. For more see

For those interested in individual stocks here’s a list of best & worst of them who have reported earnings. Again from Seeking Alpha.

Analysis from Friday – If markets are down around noon expect the Cookie Monster to eat the cookies, vegetables and whatever is out there The Cookie Monster (huge institutions investing) stared to buy and eat stock at almost exactly noon.

Significant Indexes

• McClellan Oscillator rose  to +19.86 Friday.  [Basically, +60 or above = Overbought = sell. -60 or below = Oversold = buy]. More sophisticated investors can use the 50 & 200 day MA’s and adjust from there. StockCharts has a better version of the McClellan chart ($NYMO) LINK. - This is  still NEUTRAL territory, but moving toward oversold.
• US Dollar – fell a -0.30% yesterday after opening much higher. [Any move over +/- @0.50 is significant.] Mantra - right now The Dollar Rules Is very important. Remember, dollar down almost always = stocks up and visa versa. The positive earnings reports are overshadowing the dollar which is in the upper end of a consolidating range between @$80.00 & @$82.20. Dollar at $81.41. If it moves to either side of that range it will impact stocks.

Positions

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

The McClellan Oscillator is NEUTRAL and moving toward overbought.  There is still a long way to go before stock are overbought (@+60). So technically there is some room for the rally to continue. However a better time to buy (less risk) or make a longer term investment is when stocks are oversold. (@ -60)

ETF Trends is a good resources for longer term Investors. I have it bookmarked. Here’s a sample on Emerging Markets

Traders will be interested in Paul R’s comments on side of blog concerning individual stocks.

Why are US stocks outperforming emerging markets?

• They collapsed further than emerging markets and especially the financial sector.
• There has been no reform of  the shadow financials and financials again have become becoming the dominant sector of US markets

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

The Hive – Goldman Sachs brand new billion dollar building

Goldman Sachs Fallout

From movie Casablanca – Captain Renault to Rick:” I’m shocked, shocked to find that gambling is going on in here!”

Perhaps Alan Greenspan’s Shocked disbelief in front of congress was real in 2008 – Greenspan ” I made a mistake” in believing free markets could regulate themselves without government oversight.

Investors411 readers understand that market manipulation - GREED – exists and it is unfortunately its human nature that if you cut the amount of regulators and regulations, greed can run wild.  A hypothetical and real examples.

• Cut penalties for theft, eliminate guards and surveillance cameras, leave chunks of money laying around the bank and what happens?
• Cut regulation, call for smaller government with less regulators in the Energy market = Enron
• Cut regulations, regulators of SEC and Justice Department = Bernie Madoff
• Cut  regulation in banking and you get “repro trades” driving the collapse of Lehman Brothers and Greek current debt crisis Lehman’s collapse (almost 1/2 trillion dollar loss) was the breaking point of the 2008 financial meltdown.
• Now Goldman Sach’s has also been accused of “Fraud” leading up to the 2008 meltdown.

Best analysis – “Goldman Sachs Too Big to Obey the Law” – comes from MIT’s Simon Johnson. Also, decent article on legal ramifications in NYT for both SEC and Goldman

Bottom Line - In this case, Goldman Sachs is Goliath and the SEC is  David. GS has a dream team of legal experts that would make OJ Simpson, and the SEC look like little leaguers. GS face a danger of others piling on. We all face a danger of a run on the bank that is too big to fail.

Best Line you can tell your right wing friends who will argue that the left will over regulate everything from Credit Default Swaps to Shadow Banks -” I just want the regulation to be like they were under Ronald Reagan or was he a socialist too.”

Post Script – Bill Clinton has also admitted he was given the “wrong advise“ on derivatives (by Summers, Greenspan and Rubin) It’s time a lot of other politicians admit this error too.

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

US markets took a major hit in increased HUGE volume on the news that the SEC had launched a case against mega bank Goldman Sachs.  Quote/paraphrase this AM on CNBC from SEC – “The Agency [SEC] is not done yet.” translation – there are more prosecutions to come involving the time period before the 2008 meltdown.

The best analysis I could find on what will drive markets this week. Interesting in this analysis they put the Greek debt crisis ahead of Goldman Sachs. (I wouldn’t) It also ignores the economic impact that the Iceland volcano is having on European economy.

Fearless Forecasts Last Week - “Up week” 3 of 4 major indexes were higher, despite Goldman Sach’s news.

Fearless Forecast This Week – We should have better than expected  earnings, but ash clouds over Europe, Goldman Sachs, European/Greece crisis will probably overshadow earnings – “Down Week.”

Significant Indexes

• McClellan Oscillator fell dramatically to -29.37 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 – but we are approaching oversold territory – A time to buy.
• US Dollar – rose +0.39% yesterday. [Anything over +/- @0.50 is significant.] Mantra – right now The Dollar Rules Remember, dollar down almost always = stocks up. The 50 day moving average is a major support/resistance level. Right now the dollar is just above the 50 day MA.  Think of a huge battle going on over the last 4 trading days as to wether the dollar goes up or down,

Positions

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

TYH position has been completely closed – O% gain. UWM will be probably sold for what looks to be a 7% loss today.

When the McClellan Index gets below 60 Invetors411 will again add to positions.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

+48% Profit in TYH in 1st quarter of 2110

For more see Positions section below

Who Creates Deficits?

Chat from zFacts.com

Scott Herwehe has produced another worthy editorial in the comments section of the blog. Your comments section is an excellent source on politics, economics and markets. Suggest you check out, not only Scott’s editorial on Republican hypocrisy over the deficit, but  all other comments.

Here’s his conclusion on the deficit -

“Even the financial bailout is significantly small compared to just Bush’s tax cuts. Social spending doesn’t even compare. Our corporate controlled media will never talk about the Bush tax cuts because that would be acting against their own interests. Who benefits from a tax cut for the rich? The wealthiest among us. Who control and finance our corporate media? The wealthiest among us. The only way to get out of this recession of the real economy (not Wall Street) is to spend money in a manner that creates jobs or in other words benefits the majority and for once not the minority.”

India Ascending

Economically, India only experienced collateral damage from the 2008 meltdown. Why? – Dr. Yaga Reddy, the former head of the Bank of India, did not buy into the American concept of unregulated free markets. Bob Kuttner editorial on India, King’s College and those who withstood the breakdown of our unregulated capitalism that had to be bailed out by taxpayers.

Dem’s to Attack Wall Street?

Democrats seem eager to attack Wall Street was the headline, by Lisa Leher, on centrist web news site Politico over the weekend. Will we finally get some financial reform? If so expect Wall Street to get hurt in the short term. But in the longer term this is good for the economy of the US and world that we fix the problems that caused the 2008 meltdown.

If the Democrats follow through with this they will salvage the 2010 elections. Most Republicans will protect Wall Street. Problem is so many of the Democrats are owned by Wall Street. So much of Wall Street money will go to candidates that protect them.

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

Another up day in reduced below average volume. The major indexes are even further above their 50 day moving averages than last week. This means they are even more overbought than last week. None of the major technical factors that have historically worked as prediction tools have correctly predicted US market direction in past months. – We should according to volume and distance from the 50 day moving average already be falling.

However, our McClellan Oscillator is holding up fairly well. Still NEUTRAL and not OVERBOUGHT. Lesson here is different technical indicators or theories work better at different times

Of course, the fundamental that’s behind all this is we have failed to fix any of the root causes that caused the 2008 financial meltdown that was created by  the almost completely non regulated US “free market”) financial system.  If anything they are even less regulated today.

This is the beginning of earnings week

Fearless Forecast for Last Week - “Up week”   Another correct call

Fearless Forecast for This Week – How markets react to earnings will be key. Earnings start to trickle in this week. The dollar again (see below) rules.  The Greek crisis seems settled (see below) and this will help stocks.  

Best read of the Tea leaves – We are in an “irrational exuberance” period – The trend is higher  so predicting up week.

Significant Indexes

• McClellan Oscillator rose  to +3.26 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 NEUTRAL territory – technically neither overbought or oversold.
• US Dollar – fell a significant  -0.60% yesterday. [Anything over +/- @0.50 is significant.] There has been some settlement in Greek debt crisis so Euro should rise and dollar fall in short term. Mantra – right now The Dollar Rules Remember, dollar down = stocks up.

Positions

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

+48% Profit in TYH 1st quarter of 2110

TYH is the ETF that does @3x what technology does & ROM (suggested, but not used) does 2X what technology does

Before we go over these figures and there are 2 important points.

• Caution Don’t let it go to your head. For the most part these stocks were chosen when the US markets were oversold, other reasons, plus we were lucky
• Re-read point 1

The dumbest thing you could do go out any buy TYH today.  Investors has a 0% stake in this ETF today.  Its way too far above its 50 day moving average and markets are in a neutral and not oversold condition. To see actual buys and sells link to Positions section of blog . Why TYH worked -

• A bull market
• Oversold conditions – Investors uses the McClellan Oscillator or as Monitor named it the Mickey O. The more oversold the better. Investors411 bought TYH in more or very oversold positions.
• Technology and small cap stocks generally outperform in a bull market. (Its not quite this simple)

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Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Chucky shredding wire from the movie or one of the remakes

Shredding Democracy

• Before Paulson/Bush asked for the  $700 billion 2008 bailout
• Before the worldwide 2008 stock meltdown
• Before Lehman Brothers went belly up

the FED Bank under Bernanke acting on its owned spent tens of billions of of unauthorized dollars bailing out AIG and Bear Stern. Without any constitutionally mandated congressional approval or oversight Bernanke/Geithner (who was NY fed board member) flooded these failing shadow financials with money. Did Paulson/Bush know this was happening?

“Its {the FED}secret deals, announced almost two years after they were done, violate the democratic process, if not the Constitution itself.” Robert Reich (Economist and former Sec. of Labor) The Fed came clean about this (masterfully) directly before the Easter break and American media has blown the story. Reich accurately explains the fall out here

What other secrets is the Fed hiding?

Shredding the Yankees

Yesterday was opening day for baseball, and hope springs eternal for every team. Most fans walk through a dark ballpark tunnel into a brightly lit transcendent green field full of hope on opening day.  The beloved Red Sox did twice come from behind to beat the evil empire, sometimes known as the New York Yankees, last night. Unfortunately there is over 170 games left if you make the playoffs and the Yankees will certainly shred far more teams than almost every other in baseball. Go SOX’s.

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 each weekend

Friday’s March jobs report was better than expected, especially for the critical private sector +123,000 jobs created.

It clearly looks like jobs creation started in November and is slowly growing.  Here’s the ultra right wind Washington Times on the jobs report Clearly good news for the economy. The old Jolly Green Giant (not so jolly anymore – Alan Greenspan) and Obama Administration predicting potential acceleration in numbers.

This report, even though the headline -9.7% job loss stayed the same, was too good for Wall Street. The longer interest rates stay low, the better it is for stocks. A better than expected number in the private sector translate to the Fed rising interest rates sooner than expected.

The big stat out of last week was China’s Manufacturing Index coming in better than expected. This shows global growth in emerging markets is still pulling the world’s economy.

Last Week’s Fearless Forecast – “Up week” –  All US markets near highs as rally chugs along. Like the RED SOX against the YANKEES last night. We won.

This Weeks Fearless Forecast – “Up week” – But really difficult call – The Dollar is King right now. Europe is weak (see past Investors411) and the US (jobs report) is strong. The start of the week should see a rally, but the Dollar is coming up against major support level. (see below) Best read of the tea leaves. Our bullish momentum should carry us higher at the start of the week, but I expect the dollar to hold its support. Earnings season is around the corner and the expectations of better earnings will be the deciding factor making it an up week.

Bottom Line – With the McCellan stuck near zero – no wisdom in buying or selling any large position at this time. Will continue to nibble on dips.

Significant Indexes

• McClellan Oscillator rose significantly to -1.46 yesterday.  [+60 or above = Overbought = sell. -60 or below = oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. – This (at least for a day) broke the downward trading pattern. Downside and Upside risk are about the same. We are neither overbought or oversold.
• US Dollar -fell  -0.44% yesterday. [Anything over +/- @0.50 is significant.] Dollar broke through a more minor support level Friday and ended the day at $80.71. The major support at it climbing 50 day moving average is $80.19. Would be very surprised to see this fall. Falling dollar = rising stocks

As stated before -What the dollar does over the next few weeks is critical to stocks and economics around the world. Falling dollar good for stocks & rising dollar bad in the short term

Positions

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

3D and related theater stocks weekend results good. Simply not enough 3D screens to fill the demand.

The big news is the manufacturing growth in China (see above) – Mistake to take profits in FXI (China), but adding EWZ (Brazil) looks to be a good counter balancing longer term move.

Strongly considering adding health care/Biotech ETFs on dips. Their fundamental story is compelling (baby boomers getting older & obamacare covering 30+ million more) Their charts are outperforming. Recently added stocks TEVA & ESRX are in this general area.

Its frustrating, but I’d rather wait till US equities are more oversold to buy larger long term positions.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING