An Endorsement

“The stunning lack of accountability for the greed and misdeeds that brought America to its gravest financial crisis since the Great Depression.” – Frank Rich - New Yorker magazine - “Obama’s Original Sin”

The single most important and vocal person in the white house over the last three years who fought for this accountability is Elizabeth Warren. Phenomenal editorial Warren vs. The Banks

Warren is the ONLY candidate out there that this web site endorses for political office.

Another Hero

Dylan Ratigan

• 10 years financial reporter/editor Bloomberg LP
• 5 years with #1 financial network
• Creator and host of CNBC’s “Fast Money.”
• Co host “Closing Bell.”

He left that high paying job to fight for what he believes in – accountability. His new show is on MSNBC (4:00 to 5:00 EST)  Here’s a LINK to an August 9th on air Meltdown over the Meltdown.  The emotion is real, but its what he says that matters.

You have to love the title of his upcoming book – “Greedy Bastards.” Radio Free Dylan often carries some outstanding editorials like this one “Why No Handcuffs?” Some major points Dylan often hammer’s home and Investors411 shares.

• The $600 trillion swaps market is still an unregulated, hidden in shadows exchange. – It is the Credit Default Swaps that Warren Buffett termed financial WMD’s. The reason so many investment institutions were vulnerable/over leveraged in 2008

• How to you build a viable economic system when the backbone financial systems are hidden in the shadows and too big to fail?

• His four solutions to fixing the system LINK - Another LINK

[For Heroes Part 1 see November 10th Investors411]

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Investors411 Technical Forecasting Tools.

• Investors411 uses the PCR to measure the path of least resistance for HFT dominated stock market. HFT’s love leverage and if there are more puts then calls, there is simply a supply glut on one side that forces a move to the other. See above.

The McClellan Oscillator

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Reading The Tea Leaves

HFT pushed stocks 140 points higher than they closed at. What happened? – The algorithms HFT’s use all clicked in and recognized a rapid overbought position. If we had ended the day 140 points higher our MO would have been near +50 (many other indexes that measure oversold/overbought would have shown the same) They pumped the market higher and then dumped into the close and took their nano second and multi second trade profits.

HFT’s are going to pull your chain on any event/rumor as long as they exist - Get used to it - HFT’s are here to stay.

Today, we have bullish/Neutral PCR, and an almost somewhat oversold MO = Neutral. So we’re NEUTRAL right now with just a touch of bullish mixed in.

Translation - US Stocks have no major bias higher or lower. Just a wee bit of the bull. This doesn’t mean HFT’s can not do a mega roller coaster on stocks, especially if there is meaningful fundamentals.

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Paul’s Corner

Fortes Fortuna Adjuvant - this can be translated as “fortune favors the strong.”

The title borrowed from Dave Steckler’s Blog last evening and we will look at the semis by using Relative Strength to determine the best semi.

Before we get into the semis here is a comment from Dave’s blog last evening which explained the jump in the market Wednesday:

The S&P 500 Index gained 1.35% and the Nasdaq Composite rose 1.60%.  The rally came on hopes for progress in resolving the Greek debt crisis.  Oil and precious metals prices fell and the U.S. dollar retreated from its recent gains. It’s always nice to see a 100+ point up day but keep in mind the Dow was up 280 points a half-hour before the close.

So while a few YSL 5 stocks had a great day, let’s not hold our breath too long hoping this is the start of the big long awaited rally.

Dave Stecklers Blog is always worth reading and his latest blog has  a great discussion on Relative Strength and how it’s used to research the market and in this issue he also looks at the semis.

Dave Stecklers Blog  LINK

As we found out several days ago, the semis are starting to draw attention. YSL 4 member SPRD appeared several times last week on the “Best of Woodard and Brown” screen on HGSI. The semi group index jumped to the top of the HGSI Industry Group sort on Monday Sept 12.

Industry Group Sort  LINK

There are 112 semis in the Semiconductor Industry Group which is too many to follow. I made up a user group of the top 10 stocks in the group,  the reason these were the first out of the “gate” so at the moment we can assume these are the stocks to follow.

AMD, ARMH, CAVM, LLTC, MXIM, MCHP, NVDA, SMTC, SPRD, TXN

To determine the strongest stocks within this group, we used the “Ian Slow” Relative Strength chart on HGSI. It measures the 6 month RS  with the most emphasis on the closet 3 months. Here is the RS chart of these 10 stocks based on the Wednesday close Sept 14.

Relative Strength Chart LINK

As you can see SPRD is top dog with ARMH and MXIM not far behind. Briefly looking at the charts, these three look ok. SPRD has had a nice run and will probably give us a few buy the dip opportunities.

Some of  you may be wondering why Dave and I are posting on Semis and Relative Strength at the same time. Do I read Dave’s blog for my ideas? No, but I will admit he has some brilliant discussion at times and worth ripping off. Dave and I both use HGSI for our research and of late HGSI has shown the semis are on the move. HGSI  has a valuable Relative Strength function that let’s you dig out what’s going on and we both see a change in the semis worth investigating.

But but but, Cramer just came out suggesting the semis, so why do “I” need HGSI? I just need to follow Cramer! Well that Mad Money man does have some interesting ideas and he surely follows the market and presents it in an interesting way. But do you have the time to sit down and watch each evening to catch the latest trend? Do you even get home at 6 PM in time to see each show?   Using HGSI each evening one can fully evaluate the market moves of the day, see what’s coming on or going away and come up with a list of stocks worth spending your kids inheritance on all in a matter of minutes. So with HGSI you get time management and great stock research.

If you didn’t see it here is a link to Cramer’s video on semis, it‘s quite good. See which semis he recommends.

Cramers semi video link: LINK

So do we jump into the semis?  Your guess is as good as mine, probably yes, but when considering the PIIGS problem across the pond?

The usual worthless disclaimer applies.  You buy any of these dogs and lose your house don’t whine to me, whine to Barr.

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Current Positions

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

See POSITIONS Section of blog for more on YSL#5.(scroll to bottom)

Our forecasting tool are Neutral (see above) - You rather enter oversold markets and exit overbought markets.

Positions

NLY - Annaly Capital Mgt. Ultra high dividend stock –a @14% dividend

GLD – (Long Gold ETF) Bought at 167.05 - Sold 1/2 for 180.4 Current price 177.21. Stop/sell order on GLD at 167.05. Now looking to buy small dip in price.

Disclaimer - I buy everything in the hypothetical Investors411 portfolio. If stock is mentioned and I own it you will know.

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Long Term Outlook

(for US stocks only – not our economy)

NEUTRAL*

*Investors411 has 5 different long term valuations - BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, and BEARISH.

* Everything written in BROWN is a repeat from a previous day(s)

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

Koch Brothers

Buy/Rent Calculator

The NYT has an interactive Buy/Rent calculator for those making this decision. Of course the hard part is adjusting what future housing and rental costs will be.

Follow the Money

Every Sunday Frank Rich has a column in the NYT and more often than not its a home run. You know the front people behind the Tea Party and other right wing groups but the billionaires (Murdoch and the Koch Brothers & more) that fund or run the show are the real power brokers. Follow the Money

Here’s a quote from Rich of just what the Koch Brothers believe - “They haven’t changed.” David Koch ran against Ronald Reagan on this platform in 1980 -

“his campaign called for the abolition not just of Social Security, federal regulatory agencies and welfare but also of the F.B.I., the C.I.A., and public schools — in other words, any government enterprise that would either inhibit his business profits or increase his taxes.”

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KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage	Volume
Dow	+1.65	up
NASDQ	+1.65	up
S&P	+1.66%	up
Russell 2000	+2.83%	-

Technicals, Fundamentals & Analysis

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

I realize that the vast majority of you want to know just if its safer to buy now and what areas to buy. A lot of the below material just makes your eyes glaze over and is techno speak. On the Positions Section of blog there are a list of potential ETF’s that should outperform the benchmark S&P 500. Generally,  The time to buy is on dips when the MO (see below) gets to -60 or below.

Investors411 want YOU to be a better trader or investor. The primary goal is to educate YOU. If you skim the below, you’ll see the major empahasis is on the massive currency/dollar market that, right now,  is walking stocks like you walk your dog on a leash.

Mantra for the month - The Black Box/High Frequency Traders BB/HFT control the majority of trades. Popular financial channel host Jim Cramer said last Friday – “BB/HFT make up 80% of trades.”

We had volume behind Friday’s big rally. Don’t have the faith in volume as an indicator for major indexes because of BB/HFT’s. Volume does have some more credibility when it comes to individual smaller stocks.

More importantly we had a falling dollar that has had trouble breaking through the falling resistance level (see $USO below). That’s where the action is. Dollar falls = stocks go up and visa versa. From  the BB/HFT’s to Central Banks to worldwide oil barons all play the massive currency markets and try to manipulate it to their advantage.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar fell a marginal -0.02%. Chart show falling 50DMA is a strong resistance level. Breaking down or up through it is the key for US stocks. = Neutral
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rose a marginal +o.33% Friday. This gives some stability to the 5 week long rally after two down days in a row. 5 week rally trend is still in place, but not entirely back on track = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose  to -15.64 . This was a massive, almost +45 point move. If this move continues it could flame out real fast. Nevertheless, our #1 Buy sell Indicator is back at = NEUTRAL

Reading Tea Leaves

From Friday – “When fear is at its greatest – that’s the time to buy. Have we reached that point…Personally, I’m torn. There’s so much investment fear out there – Am I letting it cloud the facts?”  Answer – YES – We had an oversold bounce Friday that could continue for a few day or longer.

Friday I gave you all the reasons for an oversold rally, yet failed to take full advantage of it. That’s me in the doghouse with traders.

INVESTORS – The conditions were marginal, but still NOT good enough to nibble. If you like you can always do “in the money” coverd calls or invest in high dividend stocks to mitigate risk. A good time to buy these is when stocks are oversold instead of overbought.

CAUTION – This is a NEUTRAL market and ideally you’d like oversold conditions to exist in a BULLISH market. That’s why Investors411 is being cautious.

Still think there is a better than 50/50 chance of markets falling to/or testing this year’s lows - SPX 1020

UUP remains the ETF to watch because it tracks the dollar.  Yes, we had an oversold bounce and it could continue. But if the dollar breaks through its resistance & moves higher (see above on $USD) stocks will roast and toast.

Positions

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

Current positions - Small positions in EWS (Singapore) USO (commodity-Oil) & TYH

Traders - Bought TYH (3X technology ETF) again at 24.98 Friday. A smaller position than last time (5% of portfolio) because the conditions were not as good.

Reasoning – I should have bought it at the open when stocks dropped @70 points, but I was waiting for a 100+ point drop. When stocks moved higher than their open in basically oversold conditions (see MO for Friday) I bought the first dip. I did Not buy as much as before because the conditions were not as oversold. (also UUP was flat)

Holding TYH overnight is always a risk & other factors.

• The rebalance the TYH to more accurately reflect its positions & I do not have a super computer(s) to figure out if its out of whack like the BB/HFT’s do
• A single event can cause the TYH to more dramatically by the next open. We are talking about an ETF that does 3X what the tech stocks do.
• One reason I have the ability to trade this, is that I have the one of the financial channels on in the background as I work and can watch the market move.

Same philosophy applies. Have moved stops up to 1 below what it was bought for & and will take 3% to 5%% profits on 1/2 of TYH, hopefully today. Conditions not appropriate for any other buys.

INVESTORS - I know you’re frustrated & would like something to buy and hold. The good news is USO & EWS are both in the black, but haven’t reached the @5% profit level  where you can sell 1/2 and let the rest ride.

Long Term Outlook - NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

NYT’s Frank Rich

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Immigration

Once again the NYT’s Frank Rich has topped the list of editorials on the Arizona immigration laws that is causing outrage across the country. If only Arizona Were The Real Problem Some points

• The show me your papers law in Arizona is certainly reminiscent of having those who look Jewish in Germany having to show their papers.
• There has been such outrage over this that Major League baseball is considering pulling its All Star game from Arizona
• Directly after passing this legislation all Arizona Republican’s also voted that an American President must show his birth certificate. (Bithers – directed at Obama)
• Where is the virtually all white Tea Party on this?  They hate big intrusive government. Strangely the hypocrites are silent.
• There are some Republicans like Tom Ridge, Jeb Bush and others fighting back against this.

Combine this with Popeye’s documented comments of the 1,000,000 people now praying for Obama’s death.

Immigration is the next topic that Congress is going to focus on.

Oil Disaster

There have been 22 comments from Friday’s Oil Disaster/Financial Fraud’s post. You can check them all out by clicking on the blue Oil Disaster & Financial Fraud under any (the latest) of the posts and scrolling down on the next screen.

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	-1.42%	up
NASDQ	-2.42%	down
S&P 500	-1.66%	up
Russell 2000	-2.87%	-

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

Stocks took it on the chin Friday in increased, above average volume. (Volume on the NASDQ was slightly lower) = Bearish

“Sell in May and stay away” is an old Wall Street saying. Will have to do research into validity, but it been said so many times it does spook investors.

The big swings up one day and down the next is usually the indication of reversal of trend.  Therefore, a least a short term top. = Bearish

Would be very concerned if we had a “follow through” day. The day after a big swing in one direction – in this case down- acts as a confirmation factor.

We have come to some resolution on the Greek debt problem – austerity measures in Greece and loans from IMF & European Union. = Bullish

United & Continental airlines have merged. They call it “merger Monday” = Bullish

Hard to see oil spill in Gulf as negative for markets. Thousands and thousands of working rigs and one thing happens to one rig = Bearish

Here’s a summary of what will influence markets this week from Seeking Alpha Big news for the week is monthly employment numbers on Thursday. Some news on China cooling down.

Fearless Forecast Last Week –  ”Up Week” This was wrong we were down.  All fundamental reasons two weeks ago – Greece, GS, Financial Reform seemed to spook investors this week. Paul R sent an email mentioning the chip stocks took it on the chin Friday (down over -4%) on oversupply issues.

Fearless Forecast This Week – Getting the fundamental issues right but the timing wrong. Honestly, have little idea of how employment numbers are going to go Thursday. Best read of the tea leaves is a rebound early as Senate dithers on financial reform, but jobs number holds the key. Best guess is we are due at least for some sort o dip. – down week.

Significant Indexes

• McClellan Oscillator fell dramatically  to -32.05 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is the third time the MO has fallen to the -33 support level. Breaking down through support would mean there is more downside to come.  However support levels do put up resistance to further falls.
• US Dollar – fell -0.22% Friday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important  Dollar closed at $81.83. The breakout of the trading range lasted one day  and the USD has fallen back from its new high into its old trading range. Rising dollar almost always = falling stocks. The dollar is rising and falling because of the fluctuations in European currencies = Greek debt.

Positions

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

Waiting on the MO to reach -60 before any major buy are made.  Looking for a dip to enter GLD again.

Caution – The stocks YOUR Stock list are especially vulnerable to a sharp correction in the market.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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Ronald Reagan – Historic Hero

For most of the World (and me) Republican Ronald Reagan and Russian President  Mikhail Gorbachev most historic and heroic event was the signing of the 1987 Treaty Limiting Nuclear Weapons.

Democrat, Barak Obama, along with Russian President Dmitry Medvedev have agreed to another historic & heroic treaty further limiting nuclear weapons to about 1550 deployable warheads each. Now its up to our Senate and their Duma to approve the treaty. Trouble is  US Senators like John McCain have promised “no cooperation” with Democrats and their is an election coming up in November. Happy we did not elect a man who puts political vengeance in front of American safety. Why we should pass this treaty (all the protocols have been set in advance)  ASAP and not wait is obvious.

• A 30% reduction means less nuclear weapons in the world (US & Russia have @95%)
• A 30% reduction, and no reduction in defensive missile systems, means 30% less to defend against.
• A 30% reduction is 30% less missiles a terrorist can get his hands on.
• A reduction by Russia and the US gives them a better moral position in asking others to reduce or not develop nukes (Iran)
• Another verifiable treaty with Russia, like the first could lead to more.

Behind the scenes, those who benefit from fear & profit from weapons growth are powerful and will fight this treaty. Ironically terrorists have killed 30+ in Russian subways today.

Frank Rich Scores Again

NYT’s Frank Rich scored another slam dunk with his Sunday editorial on right wing rage/violence – “The Rage is Not About Heath Care.” Today, when you think about left wing radicals in the USA you think about Michael Moore, and a huge group of pacifists protestors, but right wing radicalism has a clear and present violent side that YOU have voiced concerns about in the comments section of the blog.(See Bob Sadinsky for latest).

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	+0.08%	down
NASDQ	-0.10%	down
S&P 500	+0.07%	down
Russell 2000	-0.02%	-

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.

Light volume and stocks went nowhere Friday despite a big drop in the dollar (see below). The sinking of a S. Korean warship was used as the reason stocks went nowhere.  This has been downplayed by western governments.

Monthly JOBS report on Friday is the big news of the week. Analyst’s expect a positive +100,000+ jobs created. Some are expecting a lot more.

Fearless Forecast for Last Week - Oops, expected a down week and we rallied a bit. This breaks a string of correct calls.  Expected Republican investors believed all the “Armageddon” hype surrounding Health Care and it would transfer to stronger regulations for financial stocks.  It barely dented stocks. Money talks.

Fearless Forecast for This Week. – Up week. The big dollar drop Friday took some of the pressure off stocks. The conventional wisdom is that there will be a good (+100,000 to 150,000) jobs report on Friday. Remember –  Too good is bad for stocks, because it will mean interest rates will rise sooner rather than later. While stocks rallied last week the McClellan Oscillator fell. So we are no longer over bought.

Believe Market’s closed on Good Friday.

Significant Indexes

• McClellan Oscillator fell a bit to -19.61 yesterday. +60 or above = Overbought -60 or below = oversold. StockCharts has a better version of the McClellan chart ($NYMO)LINK. -  The $NYMO chart has made a series of lower highs and lower lows = Bears Rule.
• US Dollar – fell significantly -0.69%. This takes some of the pressure off Friday’s “almost merits a DANGER… warning” What the dollar does over the next few weeks is critical to stocks and economics around the world. The dollar has risen 10% since Dec.. This means that US & China (their money is pegged to ours) exports are 10% more expensive to the rest of the world.

Positions

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

3D stocks – IMAX, DWA, RGC, CNK - Investors411 will be trying to build long term positions in these and related 3D technology stocks. The last two are major theater chains.

The DWA, 3D How to Train Your Dragon’s movie opened to a respectable $43+ million weekend, but still popular AIWL (#2 at 17+ million) stole some 3D screens from Dragons. Comparison to another 3D movie same time last year (Monster’s vs. Aliens) $59.3 million. Detailed Box Office info here

Bottom Line – DWA will probably be the weakest of the 3D stocks.  In part because of the competition. If I remember correctly there are going to be 24 3D movies released this year. We will probably see a dip in in 3D stocks today/this week. All 3D stocks fell on Friday and will probably fall today (maybe tomorrow) Would look at this as a Buy the dip opportunity especially for IMAX, RGC & CNK.

Sold FXI position (see Positions section at top of blog)

One rule of investing is to limit your losses – No matter how good a stock or idea is its always good to limit your losses or know when you will sell.  I usually have a 7% loss limit on stocks.

if a Have a stop on 1/2 of DWA at what it was bought for.

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.

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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.

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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

“The Other Plot to Wreck America”

We get fear mongered about terrorism 24/7 yet obviously more American  lives within the USA will be directly impacted by everything from cancer to car accidents.

The other plot to wreck America is financial – the Shadow banks and the politicians, investors,lobbyists, and businesses that protect them. NOTHING has been done to to fix it.  We ignore the 9/15 crash (Lehmann Brothers) and it will happen again and again. American’s are being kept blissfully ignorant.

“What we don’t know will hurt us, and quite possibly on a more devastating scale than any Qaeda attack.” This make’s last Sunday’s Frank Rich’s NYT editorial a must read.

Bubble Warning

The Economist, one of the worlds most influencail economic magazine predicts “Markets are too dependent on unsustainable government stimulus [around the world]. Something’s got to give.” Sorry, you have to subscribe to getfull story.

YOUR Comments

Why us? Popeye (see right side of blog) asks the question Helen Thomas did at an Obama/Homeland security conference last week. Why is al Oaeda NOT attacking a hundred other countries? He lists a dozen major countries. Osama Been Forgotten’s old 1998  fatwa lists 3 reasons for his attack

• US troops in Saudi Arabia
• UN sanctions in Iraq were killing children
• US support for Israel

“Privatized War & Its Price”

The Roman empire privatized war before it fell and so too is the USA. The lead editorial in The NYT carries the above headline. We have outsourced war (with YOUR) tax dollars just like American companies outsource jobs. Blackwater and other undersupervised contractors have no code of military ethics and are perhaps the #1 reason we loose the hearts and minds of the countries we occupy. Ironically similar to Avatar.

AVATAR bigger than Titanic

Avatar in 3 D is on its way to shattering Titanic’s box office. $1.34 billion in 4 weeks vs. Titanic’s $1.8 billion.  BUY some IMAX stocks.  Forget waiting for the dip.  Start small and build. With 3d TV on the way, & newly mastered 3d technology IMAX should end up over 100% without some huge stock market or individual  disaster.

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	+0.11%	down
NASDQ	+0.74%	down
S&P500	+0.29%	down
Russell2000-	+0.40%	-

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.

Major US markets rose in the last 1/2 hour of trading.  Why not – 15 of the last 17 Mondays have been up days.  This was, in part, a mad last minute buying of traders to get ahead of “Merger Monday.”  There may not be lots of mergers, but stocks follow patterns and Monday’s have a stellar record over the last 4 months.

The employment numbers for December - 84,000 – below expectations, but stocks rose - Why? – The number is sway better than last January’s - 700,000+ But for stocks the below expectations is more important. A quick jobs recovery is actually and perversely  BAD for stocks.  The reason is the quicker the recovery the sooner the Fed will raise rates.  Right now investors/traders are forced into buying stocks because everything else is at such a low interest rate.

Therefore , Low interest rates are one key to US stocks moving higher.

• McClellan Index at +32.89 = A bit overbought.  The index has moved higher for a week. There is still some wiggle room for US stocks to move even higher before they reach @+60 or overbought territory -  There’s a long way to go till we reach @-60 or oversold.
  

The McClellan Oscillator is showing less room for upside gain.   However, technically this chart shows a series of 4 higher highs and a solid base at sero – It’s bounced 3 times off this number and is now a short term buying point.

Earnings season starts this week. A (Alcoa reports on Monda)y and at the end of the week some bigger companies.

Fearless Weekly Forecasts -

• From last week “Up at start of week and decline at end.”  I thought the jobs number would be around zero (expectations of market was same) and investors would sell on the news.  We did have a great start and an up week.
• The weaker than expected jobs report (but not too bad) was just what stock bulls want.(see above)  Should be another good week for bulls.  Until the McClellan Oscillator reaches overbought territory bulls rule.

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

Positions

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

These are positions I actually own

SELLING & BUYING

Adding a small position in IMAX – Will build this on dips.

More on other stocks tomorrow.

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

Long Term Outlook = CAUTIOUSLY BULLISH

Barack’s Big Bubble

Senator Maria E. Cantwell

Every Sunday, the NYT’s  Frank Rich , produces one of the most insightful columns LINK that is outside the box of the ordinary pablum of America corporate media. It’s entitled The Night They Drove the Tea Partiers Down . But let’s expand on some of his secondary points and forget about the Tea Parties for now.

Those of you who follow the stock portion of this blog and have beat the S&P 500 financially again as in the last 4 1/2 years, have notice Investors411 repeating as a mantra that volume is falling as markets are rising .  A very very very unusual scenario. Money is NOT coming into US equities for the sidelines if anything its exiting stocks. Why?

There is a growing lack of confidence & building anger over the US financial system (“shadow banks”). The vast majority of Republicans have always wanted the financial system to have no umpires or rules (think baseball without umpires or rules) Obama and the Dems have blessed this position and actually made it worse. They are stripping away vital protections that made our financial system accountable and transparent. If anything proposed changes are cosmetic. (story for another editorial).  Here’s a few relevant points that Obama and the Dems have pushed making our financial system less transparent.

• They dropped Mark to Market accounting . Now financial simply don’t have to account for losses in real time.
• Even though former Fed Chair Paul Volker is supposedly the Head of Obama’s Economic Recovery Board they have ignored his pleas to break up the too big to fail banks. In fact these banks are bigger and badder than before. LINK
• They (The Dems led the charge) voted to gut the reforms instituted after the World Com accounting scandal/collapse n 2002 that Bush helped put in place LINK
• At least one Democratic Senator has had the guts to stand up for the public - Maria Cantwell – “I’m not sure” why Treasury Secretary Timothy Geithner still has his job, calling his financial reform plans “appalling.” LINK

I know you’re getting a lot of happy talk or “political bromides” about what’s going to get done, but that does nothing. The anger is only going to grow as the bubble expands. Our finacial system is LESS accountable and transparent than when Lehman collapsed.

Bottom Line for Longer term investors and everyone else – Invest in tangible assets and countries that are less involved with the US financial system. No NOT make long term investments in US financials. Recognize another bubble is building. The longer we wait to fix it the worse its going to be when it pops.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	+0.17%	down
NASDQ	+0.34%	down
S&P500	+0.25%	down
Russell2000	_0,14%	-

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

The end of the week saw a rally, again in low, decreased volume.

In my decades of watching markets, I’ve never seen the US markets rise so far on volume that kept decreasing. The USA is a market of short term traders not long term investors. This can bet be exemplified by CNBC, the #1 financial channel, whose focus is “Fast Money,” “Mad Money,” (actual names of popular shows) & what’s happening NOW. Its exiting to watch, but its like watching a poker TV channel.

We have moved from way oversold positions to a neutral position. Perhaps the best chart you can use to tell if a market if oversold of overbought is the McClellan Indicator LINK ( more on this later – key to chart – 0 is neutral and when you get to @ +60 you are overbought and approaching -60 you are oversold)( buy at oversold and sell at overbought) We are going to use this chart a lot more.

As stated many times before The new #1 forecasting tool is what happens to the dollar.

FEARLESS FORECAST FOR WEEK – Tomorrow, not enough time for full analysis, but it looks like we are in rally mode.

——–

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 is @ 21% off its high (early June) Before that it gained almost over + 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI rose a significant +58 points yesterday and closed at 3393. We look to be starting another major move higher. A higher high price on its chart pattern has been confirmed The BDI has rallied almost 1300 points since late September. =  Bullish for stocks & world trade right now. Especially good for our positions in FXI & EWZ

——-

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 modest  +0.05% yesterday. The dollar closed at $75.76 . 

From last week – The next important resistance level for the dollar is the falling 50 day moving average (blue line on chart). This is at $76.52 this AM . The support level is a t @$75.00 Both are important lines in the sand. A breakout on either side will move US equities in the other direction and the world will follow. Right now smack dap in middle of trading range, but 50 day moving average is decreasing so the squeeze is on.

Positions

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

Our major core positions into weekend. – See Wednesday’s post – Click on Nov. 4th (last Wednesday) on the calender on to of blog.

Will return Long Term Outlook  to CAUTIOUSLY BULLISH when a higher high (we break out to new high) is established on S&P (chart pattern).

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Capitalism’s Most Ruthless Monster

John D. Rockefeller who owned 90% of US  oil at the beginning of the last century many thought earned the title back then.  The NYT’s Frank Rich LINK , Salon’s Glenn Greenwald LINK and MSNBC’s Dillon Ratigan – LINK all seem to be nominating Goldman Sachs for this position.  Over the top analogy – yes. But it does have some basis in fact. Ratigan , a former analyst for two financial channels has the best explanation (video) .

Basically, GS  received $70 billion from the government & the Fed while the financial world almost collapsed.(see Ratigan video) GS took that $70 billion and bought everything financial for incredibly cheap prices in the collapse.  They bought stuff with our money that allowed them to keep from collapsing. They "didn’t pay a dime for this money." Basically "legalized theft."  As the authors point out former GS employees permeate both the Bush and Obama administration. How do we get rid of legalized theft?

• Demand claw backs
• Get rid of invisible exchanges
• Stop placing GS executive and their protégée’s  in charge of our government
• Limit (GS on track for $29 billion) bonuses to firms who got bailed out.

President Teddy Roosevelt broke up the big monopolies including Rockefeller/Standard Oil. Will any of this happen now? Not under the Obama administration or any Republican administration – Too many GS folks running government economic policy. Some bad PR perhaps, but like Rockefeller did, GS will throw shinny new nickels at the poor/us taxpayers – As taxpayers we got royally screwed.

Investing in GS and its main rival JPM (JP Morgan) may be similar to investing in a ruthless capitalist monster(s), but also an obvious financial winner(s) The competition was devastated, they have profits from our cash, the backing of our government, they’re smart and therefore, they rule. -Recommendation – Buy these stocks on dip s

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0.67%	up
NASDQ	-0,76%	up
S&P500	-0.81%	down
Russell2000	-1.15%	-

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 and Fundamentals

• prices fell and the #1 confirmation factor, volume, was mixed = Prices falling always bearish, but volume inconclusive
  
• Better than expected earnings for most companies yet markets fail to advance =  Short term bearish signal
• Dollar rose Friday (see below) = obviously short term  bearish for stocks, But longer term pattern bullish
• BDI (see below) forms higher high on its chart =bullish for worldwide recovery

FEARLESS FORECAST – Short term it looks like we are over bought and companies not moving higher on good earnings results. This is an indication of a short term correction. However The FED and the US government is not going to stop shoveling cash at the market as long as unemployment is so high. US companies are not hiring and will first hire abroad where labor is cheaper and growth faster.  So the cash shoveling will continue and Wall Street, once over bought situation is corrected, will continue to rise and the dollar fall.

Apple reports this evening

——–

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 is @ 38% off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI rose +40 points Friday and closed at 2728. This confirmed a higher high price on its chart pattern =  Bullish for stocks & world trade right now

——-

$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 +0.15 % The dollar closed at $75.62. We have developed a suppor t now resistance (it’s called support on the way down and resistance on the way up) level just below $76 . The dollar closed below its support level. = Bullish for stocks

NB -

• Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.
• A slow decline in the dollar = good a rapid decline = bad .
  

Last year’s low was around $71, so there is a long way to go before the major and very crucial support level.

Positions

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

Review of Positions (Part 1) All recommendations for longer term investors unless otherwise indicated.

GLD – ETF for gold – Technically broke out over major resistance level at @ 100+. This is mostly a play that the US and other debt ridden G 7 nations will keep throwing money at economic problems till unemployment situation reverses itself. The longer this takes the higher GLD will go.  Mid 2010 is best read of tea leaves on this, but the created jobs will be tied to government bailouts in the US and not US companies producing jobs. – Recommendation – Buy the dip

EWZ – ETF for Brazil – This country is going parabolic in price now (not volume).  Going way up too far too fast. Very rich in natural recourses and more progressive government has meant more money for middle and lower classes who juice the economy and spend the cash. Due for a moderate/significant correction. Recommendation If there is a big spike in volume take some profits.

FXI – ETF for China – China has gone up too far too fast this year and is now lagging or mirroring US equities. China’s growth and huge stimulus package (relative to GDP) has led a worldwide recovery.  Somebody coined the word Chimerica and its true. Both economics are bound together through globalism.  The US middle & lower classes are shrinking , but the Chinese middle class and lower class is growing. This is now a decade(s) old trend.  Recommendation buy China on dips

EWY – S. Korea (much smaller position ) Tied to Chimerica, but N. Korea is a problem. Traders may want to take profits on any rally. There seem to be better countries to invest in like energy rich Canada, Australia or any country that is not consumed by debt and wasting money fighting wars. – Recommendation Hold or take profits on any rally.

More tomorrow. Including individual stocks.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

WHAT’S UP? Thanks to all of you who wrote in comments and set the agenda for both SmackDown and Torture; The endemic of torture – accountability, your comments, definition, & its cost in American lives; Shadow Banks and the Stress test;  Flu Pandemic hits stocks; Major changes at GM;  Market – Technicals & Fundamentals.

TORTURE

-

Definition of Torture

• The Spanish Inquisition waterboarded and we called it TORTURE (Frank Rich - Link)
• The Japanese waterboarded (WW 2) We executed those responsible and called it TORTURE (see ewanapt’s comments)
• The vicious dictator Pol Pot(Cambodia) waterboarded and we called it TORTURE
• The scum in North Korea waterboarded and we called it TORTURE
• The Cheney Bush administration waterboarded and we call it ”ENHANCED INTERROGATION TECHNIQUES.’

Commission on Accountability

The endemic and acceptance of torture has dramatically altered the moral character of our nation.

Torture authorized  by the Cheney/Bush administration was not used in one singlular Jack Bauer (TV show 24) moment but instead spread throughout the world.  Authorized torture approved by the government elites – from the 84 ghost prisoners to Gitmo to Abu Ghraib to Afghanistan – flourished throughout the world. See, Andy Worthington’sTen Terrible Truths About Torture

One of the greatest outrages of our time has been the change in America’s character to accept torture. Character and moral values used to be what separated us from Chairman Mao and al Quaeda.

Please join me and others  calling for an independent non partisan commission to examine and publicly report on their findings. See-

Commission on Accountability.org 

  

Dick Cheney

The Overlooked Cost in American Lives

Our use of  Torture killed  a whole lot of Americans “The reason why foreign fighters joined al-Qa’ida in Iraq was overwhelmingly because of abuses at Guantanamo and Abu Ghraib and not Islamic ideology,” says Major Matthew Alexander, who personally conducted 300 interrogations of prisoners in Iraq.”  

Torture and the “unjust” occupation/war in Iraq was the #1 recruiting tool for Islamic terrorists. who have and will kill thousands of Americans. See  ”Torture? It probably killed more Americans than 9/11″ -LINK

STOCKS

Index	Percentage %	Volume
Dow	+1.50%	up
NASDQ	+2.55%	up
S&P500	+1.68%	up
Russell2000	+2.60%	-

 

Technicals & Fundamentals

Mantra -Forget all about the major indexes - What happens to the shadow banks (financials) absolutely dominates stock  trading.

We are in the second 1/2 of earnings season.

Possible Flu pandemic negatively impacting markets throughout world.

Major changes coming out of GM. They are dropping major lines of cars and more.(breaking)

XLF - The ETF that tracks financials (mostly shadow banks) rose +2.24% Friday in increased volume.  Financials have lead this rally and if they  collapse so will almost all other sectors (see Positions section of blog on XLF) 

The XFL is consolidating between @ 9.4 & 11.3. XFL closed at 10.94. We are moving close to strong resistance level at @ 11.3.  This is the resistance level all Wall Street is watching.

BDI -Baltic Dry (Sea) Index has rebounded. (see BDI chart on side of blog) Translation – world trade is doing better.

Reading the Tea leaves – Stocks are in a tug of war-but the trend looks up. Here’s a CNBC article that agrees with this outlook. Technically we are consolidating, but there has been more upside days in big volume than downside days in big volume. Fundamentally the big event is the May 4th “Stress Test” announcement. Here some more info on the Stress Test.

Fearless Forecast.-  It’s hard to see the FLX break out above the 11.3 resistance level before the “Stress Test” on the shadow banks becomes public. But, at the rate the current administration is caving into the big banks a breakout seems likely after 5/4

 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING! 

Two faced/Batman – “Par-tay” – Mad money, big money, fast money vs. the long term economic viability of USA and world. Special weekend Update on short term traders vs. long term investors & taxpayers. Danger Will Robinson Danger, Danger.

 

1990 DC comic (Neil Adams – pencil)

Two Face 

Two Face is often thought of one of Batman’s most infamous villains (see clip) A man of two faces – one a former crusading District Attorney, the other a wacko super villain.

One major mantra of this blog for weeks has been the infamous Shadow Banks/Institutions and their future for both our country and the stock markets.

As predicted (see Updates of last few weeks) the Shadow Institutions exploded higher  (XLF +15.45%) and Wall Street (@+ 3,5%) soared on Friday. Why not, taxpayers not bond or share holders are picking up the bill for shadow institutions trillion dollar robbery and our government is allowing them to crawl back into the shadows of less transparency/accounting. 

One face to this rally is that if you want to be a short term trader - there is “Fast Money, Big Money, Mad Money” to be made  NOW!  Par-tay! So, the two faced writer of this Investment blog would tell any trader ride the wave – make the money

But as a long term investor or a tax payer – if you are spending trillions to bail out big banks, allowing them to run in the shadows &  keeping their too big to fail status - there is going to another even more catastrophic bubble bursting in the future. Danger Will Robinson Danger Danger

“Even at the cratered Citigroup, a technical analyst was moved to write a report last month urging his peers to stop living in “denial” and recognize that we are witnessing the end of “25 to 30 years worth of excess.”  writes Frank Rich in today’s NYT

Rich has his own two faced dilemma – No one is better faced to make this change to a new economy than Barack Obama and  Obama has paradoxically chosen a Dr. Strangelove “the last person to serve as an inspiring role model for alternative values would have been Summers.”  to lead us out the economic meltdown we face. 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING