Making YOU money

$$$$$$$

Mega Trends, Investments. Fundamentals, Technicals, Economic and Politics all interact. Checkout OVERVIEW LINK section of blog. You can agree or disagree with the politics, but you can’t argue with the results.

• FXI -our #1 position up over 50% this year
• EWZ – our #2 position up over 100% this year
• GLD – our #3 position – up over 20% this year
• 5 year record of beating the benchmark S&P 500
• See position section of blog below

American’s Just Don’t Get it

From Huffington Post – Fall of Berlin Wall

I don’t know if its ego, religious zeal, stupidity, greed or whatever.  We are totally out of step with the rest of the world on lots of major issues. One issue is especially relevant – 20 years after the fall of the Berlin Wall where supposedly Capitalism triumphed -

The BBC asked – Is Capitalism Working? Here’s the results from from 29,000 people in  27 countries – LINK

• 11% yes capitalism is working well.
• majority believe capitalism needs more regulation and reform – obviously not many members of the US congress seem to agree/
• 23% believe it is fatally flawed.

YOUR Comments

Checkout recent posts by Sherwehe, Bob Sadinski (always passionate), & D .  Sherwehe has an excellent follow up to what’s happening to our financial system. LINK

D worries “are our investments safe.” Short answer is always NO. Nothing is absolute. Israel could nuke Iran tomorrow. But the mega trends continue

Right now, in the short term, its starting to be is a better time to take profits than add to positions.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	+2.03%	up
NASDQ	+1.97%	up
S&P500	+2.22%	up
Russell2000	+2.06%	-

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

Another major rally in weak anemic volume

McClellan Indicator LINK Investors411 is going to include this forecasting tool far more often. There are other indicators that tell if a market is overbought or oversold, but this one is easy to understand and is really working well right now.

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. Yesterday the index moved from @-10 to +20

As stated many times before The new #1 forecasting tool is what happens to the dollar.= Yesterday the dollar dropped was huge so the stock market rally

FEARLESS FORECAST FOR WEEK -  It looks like we are in rally mode . The dollar rules and yesterday it fell to its major support level. Usually a major support level at least temporarily halts any fall. However, last week India spooked the entire investment world by buying $7 billion in gold. This has put added pressure on the dollar that basically crashed yesterday. Best guess – we hang on for a while but dollar falls and stocks rise.

——–

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 @ 18% 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 +87 points yesterday and closed at 3480. 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 1400 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 dropped a HUGE -0.92% yesterday. The dollar closed at $75.06 .  This is directly above its, line in the sand, support level.

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 $76.45 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.

Positions

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

Sorry have not had a chance to update this in over a week .

Investors

FXI – China – (now 25% of portfolio) At new high – up over 50+% this year

EWZ- Brazil – (now 20% of portfolio) At new high – up over 100+% this year

GLD (now 11% of portfolio) At new high – up over 20+% this year

Comments – All major positions have beaten the benchmark S&P 500 . With all our major positions.  This is clearly NOT the time to add to these positions.  Investors 411 buys the dips. Short term investors could even take some profits.

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.

SPX – Sold entire 20% position for 1085 (this was done to free up cash for other investments and take profits)

Traders (short term plays) These are no t 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

NVS – (5% of portfolio)  We’ve already sold 1/2 of this. Now up 15+% since bought

CSCO – (5% of portfolio) Flat since we bought position a few weeks ago.

AMZN – (10% of portfolio) Bought last Wednesday – Got lucky and this stock has risen 9% in less than a week. Going to sell 1/2 (hopefully into a rally today) and let the rest ride.

Long Term Outlook – The dolar looks like it may bred down through major support and the benchmark S&P 500 is on the verge of a yearly high – Outlook will change to CAUTIOUSLY BULLISH when this happens.

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!