Investors 411 Blog

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Bulls Stampede

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Why 2012 will start with a stampede

(see stocks below)

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A New Years Resolution

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The Single Best Thing You Can Do for Your Health

A Video

23 /12 hrs by Dr Mike Evans

Thanks to HG for heads up on this

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Best Chart of the Year

How The Deficit Got Big

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Link to full article by Teresa Tritch in NYT

What’s also important, but not evident, on this chart is that Obama’s major expenses were temporary — the stimulus is over now — while Bush’s were, effectively, recurring.

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STOCKS

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Wall Street Bull with OWS Symbol

• European Markets were open yesterday and Germany – The DAX – rose +3% This AM it gapped 1% higher at open

• For shorter Term Traders here’s the  two indexes to watch. Listed in order of importance. (unless the Italian 10 year explodes over 7%)

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From Investors411

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Michael Moore is A Whimp

So is the Left in the USA

Why? They didn’t produce

This Video Ron Paul did.

Ron Paul also recognizes its the shadow financials that are crushing the USA. His solution – return to a gold standard and eliminate the Fed would solve the problem, but create a world wide depression.

Instead we need a Teddy Roosevelt to reestablish our rules, regulators, break up too big to fail banks & a government that does not go to war and cut taxes.

Right now we are playing financial football without most of the rules and far less referees. Pure Free Market Capitalism is playing the same financial  football game without any rules or referees.

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STOCKS

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Heroes

Part 2

Obama’s new CIA Director General

David Petraeus

Petraeus when asked – Who would be your person of the year? – answered Mohammed Brouazizi The Tunisian street vendor whose immolation sparked the Arab Spring. He also gave a nod to Steve Jobs.

What Petraeus has taught is the brute force, so beloved by the right wing and military industrial complex, doesn’t work. In Iraq progress was made when Petraeus endorsed sitting down and talking with former enemies and turning them against those who opposed US forces.

Winning the hearts and minds of an opposing side works far better than  brute force which created more terrorists.

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Jon HuntsmanJo

Jon Huntsman

John Huntsman, a true conservative, has taken some outstanding positions is his fight for the Republican nomination for President.

He believes in science – global warming (see below).

As former ambassador to China he understands foreign policy. Huntsman opposes Mitt Romney’s use of brute force and taking China in front of the world court on day 1 of your presidency. It’s  a horrible idea.  It would create a trade war that would lead to a massive recession or world wide depression.

But, by far his most outstanding attribute is Huntsman is the only candidate, including Obama, that has a clear and workable

plan to break up the too big to fail banks.

LINK to his plan

Obama’s plan leaves big shadow banks up to regulators under the weak Dodd/Frank legislation. Matt Taibbi and others have often pointed out regulators are corrupted by those they regulate as easily as congress is by lobbyist.

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Systemic Disaster

If a systemic plant wide catastrophe worries you in the slightest

DO NOT

Read this article

Continue to ignore the continuous stream of giant bursting bubbles of methane gas as they erupt into our atmosphere all across vast sections of the globe.

You can see them, smell them, die from inhaling methane gas

But do they really don’t exist?

Ignore  the science and reality that your children will have to face or read the article.

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STOCKS

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Fighting Crony Capitalism

Take the crony out of Capitalism – NYT’s Nicholas Kristof’s excellent defense of Occupy Wall Street

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Boycott BOA

10 Reasons NOT to Bank with the mother of all Bankstas

Bank of America.

From Nomi Prins at Truthout. Of all the ways  (hidden fees, lawsuits, nailing vets, over charges, pay’s no taxes) BOA charges vs other local banks I find reason # 6 the most compelling. They use your deposit to gamble hidden over leveraged derivatives.

“The total amount of derivatives in the FDIC-insured portion of B of A as of mid-year was $53.7 trillion, up 10 percent from $48.9 trillion the prior year, and up nearly 35 percent from its pre-fall [2008] crisis level of $40 trillion.”

Your over leveraged FDIC insured deposits at BOA  multiplied the severity of the 2008 housing/financial crisis. Who knows how deep BOA and other banksters (shadow banks) were into the European sovereign debt crisis? – Our Fed is not audited, US banks don’t have mark to market accounting, and the whole 500 trillion derivitives market hides its trades.

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Bankstas Take A Hit In Europe

Yes, over leveraged European financials did get a $1.4 trillion bailout fund. But they were also forced to take a “50% haircut”on the Greek bonds the held. How much of this haircut that will come out of their bottom line is open for debate. (See links in yesterday’s blog)

Bankers and Bankstas - There are normal Bankers who take our deposits and use them as collateral for loans that help people and small businesses. The good guys.

Bankstas take our FDIC insured deposits and use them  as protection to play casino capitalism, on bundles of mortgages, sovereign debt, student loans etc., called derivatives  or Credit Default Swaps.

This over leveraging is done in hidden transaction in an opaque $500 trillion derivatives market. The biggest poorly regulated bankstas are now too big to fail – Example BOA.

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STOCKS

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Reading Tea Leaves

• Our #1 technical forecasting tool, the McCellan Oscillator, is at +93.06 - OMG overbought = Bearish.

• Our secondary indicator, the Put Call Ratio is at 0.91. Well below its 50DMA which is at 1.15 = Bullish

• For more on MO & PCR see POSITION Section of blog (scroll down)

Stock traders/investors put their money down yesterday -  The proposed solution in Europe looks like it will have a somewhat similar impact on stocks that the  of 2009/2010 Obama/Bernanke bailouts did. In fact, traders/investors have been putting their money down since the lows almost a month ago.

It is rational to expect some kind of pull back today. But, there are lots on the sidelines who have missed out on the move looking to buy the dip. Volume was big yesterday, but not yet the huge kind of volume associated with a climax selloff.

Unfortunately, the bigger part of this move off the bottom is probably over, but it looks like we may be able to reach this year’s highs again.

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Positions

SPY – (ETF tracks S&P 500 or SPX) bought at 123.5, now at 128.63

Reminder – Your Stock List#5 – . 5 of our 14 stocks took  some big earnings hits (one on an analysts downgrade) So Paul & I have decided to drop TSU, RES, CROX, GMCR, & CPHD. . LINK to entire list (scroll down)

Under consideration.

SSO (ETF that is @2X SPX) Buy on dip. Investors411 uses a buy the dip strategy in markets that are trending higher.

EWG (ETF that tracks Germany) and/or EWQ (ETF that tracks France) Both are higher risk because they are on the cutting edge of what’s happening. A bigger technical breakout than US indexes. Yesterdays melt up was fundamentally focused on the fact that specifically German and French financial institution would weather the default crisis.

I favor Germany – better overall economic fundamentals. Buy the dip.

XLF (ETF for financial stocks) For those that can handle more risk UYG (2X financials) & FAS (3x financials) Several Investors411 bloggers have made out handsomely with gains of 50+% trading January Calls on FAS.

Mea Culpa – All of the above new considerations should have been listed Monday after the Upgrade.

Note – These are official Investors411 Positions – I buy each position mentioned.

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Long Term Outlook

3 to 6+ months

Investors411 upgraded its Outlook on Monday to CAUTIOUSLY BULLISH. Reasoning

• Technically, we broke out of this summers trading pattern. The resistance and now support level for benchmark S&P 500 is @ 1225.
• Fundamentally, the perception that European banks will survive (see Banksta at War) another over leveraged crisis
• A 2.5% GDP Growth in the third quarter is NOT a recession number.

CAUTIOUSLY BULLISH

Investors411 has 5 different 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

CHECK ALL DATA, I MAKE MORE THAN GRAMER ERRORS.

Springtime For Europe Then Reality?

We have another major solution to the Eurozone Crisis. German stock market up 4.84% at 8:20 EST and climbing.  So favorable reviews from Germany should transfer across other stock markets . Globalization at work. NYT’s #1 story today. Two biggest points.

• Greek’s default grows from 21% to 50% on bonds
• A $1.4 trillion bailout package to protect banks from  bad debt of all the debtor countries in Europe.

Zero Hedge (libertarian view) negatively dissects some of the details. - A Farce, & Springtime For Europe then Reality - Citigroup’s conclusion, does a good job at outlining what happened and next steps.

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The Lobbyists Dream Candidate

The lobbyists in Washington have chosen their Dream candidate - Mitt Romney

• He’s raised more lobbyist money than all the other Republican candidates put together
• 6 times the amount Obama raised from Wall Street

Mitt just had another Washington lobbyist fund raiser in DC and the invite list included the “Dozen” Biggest of K Street  lobbyists who run our government. Link and Link and LINK

Obama was the last presidential candidate that K Street showered  a just bit more $ on than the challenger  and the negative results are evident. This time around its not even close.

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STOCKS

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Reading Tea Leaves

• Our #1 technical forecasting tool, the McCellan Oscillator, is at +67.29 - overbought = Bearish.

• Our secondary indicator, the Put Call Ratio is at 1.01 = Neutral.

• The PCR is telling us that the professionals who use the Puts and Calls are Neutral. However, since the 50DMA of the PCP is not at 1.00, but much higher at 1.17 Sentiment = Moderately Bullish

As stated before the events in Europe trump this like they did after the 2008 meltdown.

Then, the MO fluctuated between +110 to +20 for two months. At that time there was the start of a set of solutions led by our Fed and Treasury that lite a fire under stocks for two years.

The MO should reach OMG overbought levels today (over +80). This may slow down the stampede and create some dips to buy.

• Now, it seems like the perception of investors is that  the proposed solution in Europe will do something similar tot he stimulus of 2009

• Stocks, especially financials should do better, but just like 2008 people/taxpayers will suffer in Western Democracies.

• The 25% of global growth this year that comes from China(Time magazine) is critical to bullish trend developing.

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Paul’s Corner

3 Days of Ian Woodward

This past weekend I had the great pleasure of attending the fall HGSI Workshop in Palos Verdes Ca. The workshop featured lecture by Ian Woodward and Ron Brown from HGSI. Let me give you a few of the details.

Ok ok, I can hear the moaning, “Oh no here comes more Ian Woodward and HGSI talk”. Please folks humor me, read on!

Ian and Ron’s discussion lasted for three days. Interspersed throughout the weekend there were several guest speakers who added to the value of the workshop.

Ian showed us his research behind HGSI investing and Ron gave live market demonstrations how to maximize using HGSI.  This meeting really helped us understand the undercurrent of the market. Ron and Ian showed us how to get insight using HGSI and related tools in a predictive manner.

Fred Richards – an HGSI contributor, Harvard Economics Professor and longtime expert investor gave us a great overview of the world economic stage and what to expect going forward.  Fred is a great CANSLIM type investor with decades of experience and great stories. A friend of his when growing up was William O’Neil of Investor’s Business Daily.   It was wonderful hearing Fred and by good fortune I sat next to Fred at dinner Saturday evening. Ian bought dinner for all at a wonderful Mexican restaurant

LINK

Chris White demonstrated his new software EdgeRater 5.0.   Chris demonstrated how using HGSI, one can do an end of day update across the market of index, ETFs and Stocks in just a few key strokes.  Perhaps the greatest benefit of using EdgeRater with HGSI is EdgeRater takes many of the tools developed by Ian and Ron and automates them in EdgeRater giving us a predictive look into the markets.

LINK

Chris Wilson an HGSI user demonstrated his techniques for Pairs trading.  Using HGSI and a non-proprietary set of tools using HGSI, Chris broke new ground with a technique based upon the changes in RS over time between an equity and a comparative index or ETF.

Dr. Jeffrey Scott, an HGSI user, presented stocks for consideration of our next JIRM index, our early warning indicator of a failing market.  For background, check out Ian’s blog, posted on the HGSI website: Stock Market: Doom and Gloom or Plain Sailing? September 25th, 2011.This exercise gave us early insight we are clearly seeing rotation into unusual leaders such as SBUX, KMB and MCD. This rotation reflects the current fear in the marketplace.  This was an excellent lesson in chart reading and fundamental analysis. We ended up selecting 19 high quality leaders in this exercise. Only attendees have this list and if you wish to see it you have to attend a work shop.

LINK

For me the highlight of the workshop was a brief lecture by Gil Morales (author of Trade Like an O’Neill Disciple) to review his tidea on current market conditions and update us on pocket pivots.  Gil was supposed to give an hour discussion but it soon turned into 2 ½ hour lesson of correctly shorting a stock. Gil also painted a concerned picture on the market and gave us some names to consider shorting.  Gil was an analyst for Investors Business Daily. He uses HGSI to scan for pocket pivots. A pocket pivot signal gives a very early signal that a stock is getting ready to break out. I have studied the signals for months now and they do appear to be a very good early indicator.

LINK

My wife joined me on this trip and we took some time touring Pasadena, Hollywood, Beverly Hills and Bellaire. She really enjoyed buying clothes! I was a great weekend.

We all like to talk about our best stock trade. The investment I made this past weekend with respect to time, air fare, hotel, Seminar cost has to be the best stock investment I have ever made. It was an outstanding weekend.

If any of you are serious about developing your trading skills, Ian’s next workshop is scheduled for March 24-26. I encourage you to join us.

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Positions

SPY – (ETF tracks S&P 500 or SPX) bought at 122.5 (See Monday’s blog for details)

Your Stock List#5 - Mea Culpa – Holding stocks through earnings season is always dangerous. 5 of our 14 stocks took  some big earnings hits (one on an analysts downgrade) So Paul & I have decided to drop TSU, RES, CROX, GMCR, & CPHD. Their positions will be closed at end of day. LINK to entire list (scroll down)

Future considerations – SSO (ETF that is @2X SPX) Buy on dip. Investors411 uses a buy the dip strategy in markets that are trending higher.

Bottom Line - It looks like a trend is starting. This is a significant bailout in Europe. There will probably be more. Little discussed China is the key to global growth and this trend developing.  The greatest risk is at the start of a trend, but also the biggest reward. Obviously the trend is NOT solidly in place.

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Long Term Outlook

3 to 6+ months

CAUTIOUSLY BULLISH

Investors411 has 5 different 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

CHECK ALL DATA, I MAKE MORE THAN GRAMER ERRORS.

Stocks

Friday, Saw a major short covering rally in US equities. The move off the summer lows has been led by financials (ETF = XLF) Up almost 20%.

The major issue in the short term is who is going to finance sovereign debt of Greece and other European countries.

The German banks are the largest holders of European debt. The Greek situation is crisis #1. Today

• At 8:00AM EST  German stocks up +3.55%
• Earlier this AM Greek stocks down -4.6%

This data trumps others and says the rally will continue even though our McCellan Ossillator is at overbought levels 69.87

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The Long Term Outlook has been upgraded to CAUTIOUSLY BULLISH because of a technical breakout in the trading pattern and what is perceived to be a victory for bankstas in Europe. (more explanation tomorrow)

Investors411 has a position bought Friday – SPY (S&P 500 tracking ETF) at 123.5 (see comments section of blog)

Traders – Shadow banks and financials look like they will continue to rally, but are very risky

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Long Term Outlook

3 to 6+ months

CAUTIOUSLY BULLISH*

*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

CHECK ALL DATA, I MAKE MORE THAN GRAMER ERRORS.

New Mexico

Move YOUR Money

The  state of New Mexico’s house voted 65 to 0 to move their money ($2 to 5 billion) from the big shadow banks to the local community banks. So why can’t YOU Write your state legislatures. Tell them what New Mexico did.  Tell them what YOU did. You can make a difference.

Elizabeth Warren Calls Out Wall Street

part 2

Great follow up by James Kwak editorial on how the Big Shadow banks will try to block Warren and reform. Obviously the entire Federal government failed to stop the Shadow banks bring this country to its knees.  All the TEA party people, Rush Limbaugh, Glenn Beck will rise up to  scream oppose to any attempt by the Feds to better protect the common working man and woman – They will call it socialism, big government, and stifling the markets.

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	+0.52%	up
NASDQ	+1.17%	up
S&P 500	+1.30%	up
Russell 2000-	+1.45%	-

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.

Technically, Volume. out #1 confirmation factor, seems to be turning in favor of the bulls.  For the last few days rallies instead of price declines seem to begetting the bulk of the volume.  While its too early to claim victory on this price roller coaster a bullish trend is developing. Perhaps the single biggest basis for this potential bullish trend are US equities are oversold (see below)

Fundamentally -Looks like rally may be starting and European countries are going to protect potential defaulting countries. Short term positive – long term negative. Here’s the question – Will Greek workers be happy with austerity demanded by German banks? Is Greece like the Countrywide Bank (first of the big USA banks to fail) of the USA?

US trade deficits just got bigger -$40.2 billion – for last month. A bigger than expected number probably due to strengthening dollar. Bearish stat

Significant indexes – Forecasting tools for market direction

• McClellan Index fell to -37.14 =Approaching Oversold. We’ve passed -60 or oversold levels twice. When the  McClellan Oscillator gets past those levels its a signal to buy.  The more we are over -60 the better at least a short term buy will come out successful. -37.34 is a better entry point than +37,34, but not as good as -60 and beyond.

Positions

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

SELLING & BUYING

These are YOUR selections

Stock Watch List

NB – I feel much more confident with ETF’s because they reflect global trends than individual stock. Too many things can go wrong with individual stocks. Click on ticker symbol for chart

Caution – You have to be careful that the dip does NOT break trough a major support level. Then the dip becomes toast

• SEED – A China related stock. Broke down through support levels and created lower low. Trend broken. removing from list
  
• AAPL - Formed a double bottom trading pattern @ 190 - a buy the dip opportunity
  
• CAAS – Broke down though 50 day, but has some STRONG volume up days. A China play that will follow FXI. Tempting
  
• PCLN – Fell below 50 day moving average. Formed a double bottom bullish trading pattern. A buy the dip opportunity
  
• F – Oversold, and well down from highs. Has formed a base at 10.5  - a buy the dip opportunity
  
• DRWI - Big exporter to China -  Sitting on 50 day MA support level  No big volume as stock dropped= good sign. Buy the dip .
  
• ENOC – New – Reduces costs for utilities 50 day MA acting as support Potential buy the dip
• IMAX – Great long term chart – Poor short term chart. Lower highs and lower lows  Investors411 has a 2% of portfolio position in this stock. Sell at least 1/2 into next rally

YOUR new Stocks (sorry several of you sent multiple lists and I picked what looked best)

• GS, Often considered the #1 Shadow bank seems to have formed base at @ 150 Tempting.
• CSCO, Techs new leader Moving up despite rocky market a by the dip
  
• SHOO, Great long term chart. Pulled back and is forming a base. Would like to see a bigger base, but tempting
  
• ICON, Did NOT form lower low over last two weeks as markets toasted a buy the dip
  
• VPRT Another stock that weathered recent pullback well a buy the dip
• DGIT Thinly traded, but potential winner – just broke above its 50 day MA a buy the Dip
• CTCT Rebounding stock, has a of good volume up days has breakout potential
• VCI Good volume, good chart Somewhat overextended A buy the dip underway
  

Bottom Line – We are oversold and ready for at least a short term run – Investors 411 opened a 5% position in TYH (3x financials) Friday at 117.14  TYH now at 123.56 Sold 50% at 124.85 on Friday for +6% gain.

Big Mistake here was not to commit more $ TYH to trade.

I’d much rather buy while the McClellan Oscillator is -37 than +37. But, the lower the McClellan goes the better the buying opportunity.

Lots of the above stocks have technical potential IF there is a rally

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Germany and Jobs

Berlin Wall Falls

The jobless rate fell again in Germany from 8.3% to 8.0% in Sept, then to 7.7% last month. LINK (World News Network which carries this story is a good source for news outside the USA.)

What does Europe’s biggest economy do right beside provide health care for all its citizens? Nobel Prize winner Paul Krugman points out some obvious differences in our economic systems. Basically, Germany has a more regulated free market/capitalist system. They take care of their workers. The rebound from recession is also evidence that outside the USA other countries (especially emerging markets) are recovering faster than ours. LINK

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0.91%	up
NASDQ	-0.83%	up
S&P500	-1.03%	flat
Russell2000	-2.09%	-

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

Dollar rose  a very significant +0.78 so stocks fell. The inverse relationship between the dollar and stocks is so strong it is easily the dominating factor in movement of equities.

List of best performing stock markets this year by country from Seeking Alpha – LINK

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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 @ 7% 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 VERY significant +206 points yesterday and closed at 3954. Up 12 days in a row. DANGER – This index is going parabolic – up too far too fast – building a bubble. A higher high price on its chart pattern has been confirmed The BDI has rallied about 1800 points since late September. =  Bullish for stocks & world trade right now. Especially good for our positions in FXI & EWZ

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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 was rose a VERY significant  +0.72% yesterday. The dollar closed at $75.68 . “ Usually a major support level at least temporarily halts any fall.” The $75 support level held and now the dollar is in the middle of its range.

The next important resistance level for the dollar is the falling 50 day moving average (blue line on chart). This is at $76.25 this AM . The support level is a little below $75.00 . Both are EXTREMELY important lines in the sand. A breakout on either side will move US equities in the other direction and the world will follow.

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

The index closed at -17.81, down 207% – If you look at the chart – once major momentum starts in one direction it usually continues. If stocks and this index close down  below  25/30  today the trend should continue until we reach oversold levels – below 60. (note -207% is significant,but not as big as it looks)

Key to chart – Zero  is roughly  neutral and when you approach to @ +60 you are overbought and approaching-60 you are oversold . Buy at oversold and sell at overbought. Nothing is absolute in this chart. In fact using the moving averages as a central point is better than using zero. Nothing is absolute about the minus or plus 60 number either.

Oversold conditions = buy Overbought positions = sell

Positions

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

Sorry have not had a chance to update Positions section in over a week

Investors

Comments – NOT the time to buy or add to recommended positions. (FXI, EWZ, GLD)  Enjoy the rally. Shorter term investors may want to sell part of the 3 major positions while they are at highs.

Going to add Indonesia & Vietnam ETF’s – but waiting for dips. Also going to add DGP (this ETF does about 2x what the GLD does) – More explanation later. As a trade like GS. Again, waiting for dips

Traders (short term plays) These are not ETFs, but individual stocks

Extra Note of Caution here – Even though I always warn you AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING! please note I’m far less confident in individual stock picks

CSCO – (5% of portfolio) Flat since we bought position a few weeks ago . – Going nowhere while markets have moved higher.  Selling soon for @ -1% loss – Hopefully into a rally. Sold 1/2 CSCO two days ago and the rest yesterday for -1 to 2% loss. Position CLOSED

Long Term Outlook – The dollar looks like it may break down through major support and the benchmark S&P 500 is on the verge of a yearly high – Outlook will change to CAUTIOUSLY BULLISH if/when this happens. Instituted change yesterday , but subject to further change back to neutral since breakout was weak.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

FEAR

Photo from great article “Fear is the Mind Killer” Link

Your Comments

This week many of you have offered very valuable comments and concepts on the health care debate. Check out the comments section on the side of blog.

The latest fear mongering is somehow “death panels” are going to be created if you pass a health care plan. LINK

The irony here is that insurance companies now have an army of agents who look for cracks in legislation (many consciously developed by corporate interests) to deny health care to those who need expensive often life saving procedures.

Why the far right Lies, Shouts down and tries to promote Chaos – It works! When you don’t have truth and facts on your side – you use fear to win.

Likely Course of Health Care Debate

Most Likely the House will have some sort of Heath Care Plan with a public option and the Senate will pass another watered down plan without a public option. Then there will be discussions.  Bottom line comes down to this – Are the Democrats willing to make the vote a simple majority rules vote rules? They have the power to do this or allow for  a Republican filibuster in Senate which will probably get less than a handful of Democrats to join in and therefore kill the public/private plan

The issue at stake is will we have a Public system like all the other industrialized Democracies who have for decades voted to keep them or will we have some watered down untested health care system.  Neither result will be universal health care. One plan may be a slight improvement, and a public option a significant improvement.

Cancer Breakthrough

Scientists at MIT have developed a ” a drug that can selectively target and kill the stem cells that drive the growth of tumors has been identified for the first time by scientists who searched more than 16,000 compounds to find it.” Story link here

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	+0.39%	down
NASDQ	+0.53 %	down
S&P500	+0.69%	down
Russell2000	+0.53%	-

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

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

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

Technicals and Fundamentals

Fed meeting this week went pretty much as expected – they’re pledged to keeping interest rates low and that’s good news for stocks.

France and Germany announced positive GDP growth in last quarter (+0.3% ) meaning they are no longer in recession. Good news for world’s economy. Their banks were far less involved in financial weapons of mass destruction (CDS’s) than ours. So in addition to more managed economies like China and India add France and Germany instead of the more “free market” USA economy as leading us out of recession. The far right should cringe because this looks like the socialists leading us out of recession.

One of the keys to keeping this recovery on track is mortgage rates . Rates below 5.5% = decent and the lower the better. Here’s a decent chart and story LINK

Significant forecasting tools/Indexes for stock markets

BDI - The Baltic Dry Index measures the flow of goods (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern .  After a ten day drop the BDI has turned back higher  – up +78 points yesterday. The mid term trend since early July is clearly bearish, with a series of lower lows and lower highs. Bulls need a good long run here to break out of the bearish trading pattern.

In a nut shell the BDI is

• short term - Bulls are back (for now)
  
• mid term -  Bearish pattern
• long term - Bullish pattern

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.  What has become quite clear is that the dollars 50 day moving average has become and ultra strong resistance level . This is signified by the blue line on chart . Every time prices close to this descending line since the end of June they have failed to break out higher.

Once again we tested that 50 day moving average this week and failed to break out. The dollar has fallen the last three days in a row since the test. Down -0.61% yesterday. Long term the dollar is in a bearish trend and the short term bearish trend has returned. Mantra – Dollar down usually = US stocks up

A gradual reduction in the price of the dollar is part of the solution to global worldwide recession n

Positions

The whole Positions Section has been revised (Click on “Positions” at top of blog). Check it out

The Positions section will be revised this weekend to show new positions in SPX 10+% EWZ another 5+ % FXI another 4% and more.

Personally I have been day trading US financials (FAS &FAZ) – I do not list day trades in Positions

Sometimes it’s surprising at just how long a trend last. But buying dips of trending sectors still works. -We are coming up on historically the worst two months of the year for stocks Sept. and October.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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

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"That Big Sucking Sound"

Some of you might not be old enough to remember Ross Perot’s famous line about globalization (in this specific case it was about a treaty called NAFTA) "That big sucking sound " was jobs getting sucked outside the USA.

Globalization is a multi edged sword. For more on the good, bad and ugly of globalization see Investors411 here Globalization helps developing countries (think China, India , etc.) explode in job growth, but it sucks jobs out of the USA at all but the very top levels of American business.

One of the biggest economic lies you are constantly overwhelmed with is – Cut taxes on private business and this will mean more jobs .  This is a pure Bulls__t . The jobs go overseas . Everything is outsourced and practically all that remains is the tip top upper management.

It’s "Shocking" just how little jobs growth in the USA was created by the private sector over the last decade. Michael Mandel , the Chief economist for BusinessWeek chronicles private sector jobs growth over the last 10 years here

Some rough quotes

Private sector job growth rose by 1.1% in the last decade…the worst decade for private job growth since the Great Depression…a lost decade for the American economy…big job growth in health care (mainly government funded) , education, and government…this growth was funded by growing trade and government deficits…Its just horrible, just horrible… private industry is just not a jobs creator… and manufacturing is in free fall… an unalloyed bad.

Needed to be done according to Mandel – Innovate, help keep manufacturing jobs, take a step back and look at what  globalization means to us.

Take a look at a country like Germany that protects and builds it’s manufacturing/export sector. Germany is seeing the light at the end of the recession tunnel here.

• I nvestors411 can’t emphasize enough what a bad investment the USA is relative to counties like China and India because of globalization. This mega trend will continue until the dynamic of globalization change.
• This economic meltdown is not going to significantly recover in the USA until there are some dramatic changes in both financial institutions (see past Investors411) and how we look at globalization.
  

Many thanks to one of you who spent 30 minutes going over this with me yesterday

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index	Percentage %	Volume
Dow	+0.18%	flat
NASDQ	+0.06 %	up
S&P500	-0.17%	flat
Russell2000	-0.94%	-

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

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

Technicals and Fundamentals

Finally above average volume.  A major battle yesterday between bulls and bears . We hit the 875 support level of the benchmark S&P 500 and there was blood (volume) everywhere .  For a while the bears crashed through the barricade, but the bulls fought their way back and the index closed above 875 .

As predicted at the beginning of the week we are already challenging the major support level.

We did briefly establish a lower low, but the bulls held.  This is significant because of the volume.

Reading of the tea leaves – The longer we stay above 875 the better a chance of a rally has of getting started.

Huge bullish factor – No matter how you think this impacts the USA in the future. The Obama administration is NOT going to let any big banks fail. Also, they keep kicking the can down the road on any major fix of the problems that created the economic meltdown.

Earnings season around the corner.

Significant forecasting tools/Indexes for stock markets

Note - Repeated statements in brown.

The BDI has become the best of these three forecasting tools .

BDI - The Baltic Dry Index measures the flow of goods (world trade) . BDI fell for the 6th day in a row. However the rate of decline decreased slightly. After a 5 month rally the last six weeks have seen a decline where the BDI,technically, has had lower highs and lower lows.   We are currently establishing a lower low for price. WARNING -  The breakdown in trade is very significant to any worldwide recovery . BEARS RULE

The BDI is now the first chart I look at each day. – Globalization has greatly added to the interconnectedness of the world’s economies. It’s a worldwide recession, and if trade prices break down so will individual economies.

$USD - The Dollar was flat yesterday -0.07% The strong inverse correlation between the dollar and stocks has existed for many moons. Dollar up = markets down. Dollar closed at $80.66 and has been trading for  a month between @$81+yesterday= and $79+. So the dollar nearing the top of its consolidation range. Long term Bearish pattern for Dollar ( bullish for stocks ) We bounced off the lows in early June and are now in a consolidation pattern .

WTIC – Oil dropped a huge -4.43% yesterday, and 15% over last week+. (see chart) The 6 day fall has been significant and has NOT been accompanied by a significant rise in the dollar. (dollar works inversely to oil prices) What oil markets seem to be saying is demand is weak out there and the world’s economic picture is less bright than traders thought. The entire move higher for oil prices may have been manipulated. (see above WSJ article)

Therefore, Oil prices are no longer accurately acting as a decent tool in forecasting stock prices. Investors411 will keep an eye oil prices, but no longer use it as a forecasting tool for stocks. In fact, right now falling oil/gasoline prices are good for the overall economy, but bad for related companies (energy & alternative energy)

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Our Positions (For more see Positions section of Investors 411-scroll down)

I plan to buy back all recommended foreign ETF’s – just hopefully at a lower level. Perhaps when  S&P dips to support level @875. Perhaps lower. Wait on Brazil EWZ – too tied to oil prices

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING