Investors 411 Blog

Will Any of YOU Defend Obama?

huffington post phot

Check out the last 4 comments on the right side of the Blog starting with Bob Sadinsky’s – “Republican Lite” Besides someone else would have done worse (McCain & Palin) is there anyone out there who will sing Obama’s praise?

D. pointed out Tom Friedman’s we need nation building at home not Afghanistan  -  LINK Popeye does damn with faint praise – Afghanistan speech was a brilliant political move for Obama & Abby Gold reminds us what’s happened in Afghanistan to invaders for the last 100 years.

One of you privately sent me an email of someone very significant who praised Obama on Afghanistan – Mike Huckabee LINK Huckabee was the leading Republican candidate for president. Unfortunately, he’s toast as a candidate. He granted clemency to the guy who killed the 4 cops sitting in a Washington cafe.

Huckabee might not have  been your political cup of tea, but he was a decent guy who, like Obama made overtures to fellow American’s who disagreed with him. The Republican’s leading alternative is probably Sarah Palin – God help us.

So here’s some Obama good news from me besides he gives eloquent speeches – Bank of America is repaying $45 billion of its TARP loan with interest, the economy is clearly stronger as measured by GDP (in part due to stimulus package) and the rate of job loss is declining.

Remember Larry Wilkerson’s words from yesterday’s Update -

“If you are a praying person, he {Obama} needs your prayers and support. If you are not, he needs your support. Because all of us Americans put him where he is–and I do not mean by votes. We–all of us–let George W. Bush and Richard B. Cheney set us up. Moreover, we all contributed to creating the perilous fiscal state that is now a more dangerous threat to our country than any terrorist could ever hope to be”

KISS & STOCKS

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0.18%	down
NASDQ	+0.42%	down
S&P500	+0.03%	down
Russell2000	+1.17%	-

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 dollar rose a modest +0.34% and this seemed to keep a lid on a growing desire for stocks to rally.  Were in December so I guess you can call it a Santa Clause rally led by internet retailers like recommended AMZN (at new high)

Bernanke’s confirmation hearing goes in front of congress today. No matter what you feel about the guy, if he does not get confirmed it will hurt stocks.

Jobs # for November on Friday.

Now going to get a bit more technical

If you don’t understand a term look in up at Investopedia.com dictionary 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 rose +82 points yesterday and closed at 3836. Technically  the BDI broke out through its major resistance level 4291 (this year’s high) over a week ago.  The BDI has rallied about 1700 points since late September. After 16 up days in a row, 9 down days in a row & down through the former resistance/now support level 0f 4291 . This is a chart that usually gives off signals – the rate of decline was slowing and yesterday turned.

What it means – Long term we created a higher high on the chart = Bullish. The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets. Recent price drop-Nothing to panic about yet

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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 rose  +0.30% yesterday . Anything close to or over +/- 0.50 is significant  The dollar closed at $74.64 . 

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

The index closed at +25.24 This is a slightly Overbought Position . This chart is showing we seemed to have reached a plateau. It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 .  There has been no clear buy or sell signal for over a month,. Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell

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

Positions

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

This section need to be updated – Sold 8% (24 to 16 % position in portfolio) of FXI and all of DGP. Taking profits was a mistake and bought back all of DGP (Double gold) & 1/2 of FXI.  This all happened because yours truly got spooked over the Dubai crisis.

Recommended ETF’s

Gold (GLD & DGP) – (recommended positions) is also at a new high. Warning – this ETF is starting to go parabolic (up too far too fast) Perhaps we have reached the top of the parabola. If  we have another day or two of volume increase and major price move (above 1%) we will probably get at least a short term hit. Long term holders – the fundamentals are still good. Traders and shorter term investors keep a close on this growing parabola. Time to take some profits – now or in next few days (depending on escalation of price & volume)  Sell into the parabola

MOO – Our new agriculture ETF is also at a new yearly high and on a breakout run.  Each of the recommended ETF (except anything that is 2x or 3x a sector or country) is hopefully a long term position.  This stock is fundamentally aided by the growing middle classes of India and China eating better and a falling dollar.

EWZ (Brazil) – Again at a new high.

FXI – Overall excellent for the year, but lagging right now and within a few percentage points of new high,

NVS -(A stock, not an ETF) Our swine flu play – we had a nice run with this stock now up over 20% – It is a solid company, but it was mainly a swine flu play.  Our town is getting out shots on the 7th.   We already took 1/2 the profits on NVS and will take the rest in any slight rally. The scare is diminishing. This stock had a big volume decline yesterday. Looks like the momentum players are heading for the exits.

Long Term Outlook = CAUTIOUSLY BULLISH

Let Them Eat Cake

“Marie Antoinette à la Rose”

Harry Ried and the Democratic Senators have come up with  a Health Care plan that insures an additional 31 million Americans and closes some coverage loopholes -  Even though this plan is far weaker than other plans that have been voted and kept in place by the voters of other civilized industrial democracies the left wing Huffington Post seems to be happy - LINK

Michael Moore and others call this a giveaway to the health insurance industry LINK

The Marie Antoinette crowd who would rather tell the children, those seeking employment and others to “let them eat cake” have come up with nothing to help even the uninsured.

Global Trends & KISS

(Keep It Simple Stupid)

Yesterday, Investors411 went over an obvious global trend - sex , from politics to economics, sells . Incidentally, all the stores I went too were sold out of the Newsweek  magazine with the hot Sarah Palin cover. It probably went as fast as the  Washingtonian magazine with the hot Barack Obama cover.

In the Overview Section LINK of the blog, written a year ago are outlined 4 major trends that that greatly influence economics and the stock market.

Relative to all the major investors out there, I’m for lack of a better word stupid . They know more, have armies of help and banks of computers. So I’ve identified 4 major mega trends that not only make YOU and me better investor, but helps understand or relates to all things from economics to politics. It’s worked for the last 5 years so there is probably something to it. In short they are -

• Globalization
• The shortage of commodities (Peak Oil)
• Spread the Wealth
• The Great Recession

Yes,the  Overview Section which covers this in more depth, should get revised or updated.

In a narrow sense, they are investment tools that have given Investor411 the ability to outperform the benchmark S&P 500. In a broader sense, they make the world more understandable.

KISS & STOCKS

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0.11%	up
NASDQ	-0.48%	up
S&P500	-0.05%	up
Russell2000	-0.36%	-

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

Volume – Volume or how many people buy/sell a stock on a given day his usually the #1 confirmation factor of a price move. That’s why in the above chart the price and volume figures of the major US stock indexes are used. When lots of investors buy or sell the price move becomes more significant.  Kind of like a crowd that rushes through the front door (the door would be called technical support or resistance level in stock market terms) on the day of the big sale.

Today even though the volume was up from the previous day its NOT significant because it is still below the average volume.

If you get lost with a term or want to know more use Investopedia.com dictionary and other help programs or Stockcharts.com tutorial programs.

Why Stocks Are Moving Higher – There are several major reasons and lots of those reasons relate  to the 4 mega trends.

• Many emerging markets like China never entered recession. They have managed or regulated capitalism, not our unregulated free market system.
• Stimulus programs around the world in all the G 20 countries. Basically governments printing money, cutting taxes, low interest loans etc. Stimulus works best if you have lots of money saved (are a creditor nation) and badly if you are in debt. (you are a debtor nation)
• While the financial meltdown caused by not regulating the US financial system  did spread and impact the world. Countries that bought into the US “free market” or “greed will regulate itself” system were hurt the most. Therefore, there are some heathy countries.
• The US government/taxpayers socializing the risk of the shadow banks and let them remain in the shadows by eliminating mark to market accounting and has NOT offered any real solutions. The same bubble is building again and stocks ar rising.
• Zero interest loans by US government creates a whole bunch of cash that has to go somewhere – Under the sofa, collateral for bad loans, and/or into the stock market.  So stocks look relatively cheap.

Now going to get a bit more technical

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

——–

Significant forecasting tools/Indexes for stock markets

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

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

The BDI has broken out to new yearly high

The BDI rose a  HUGE +258 points yesterday and closed at 4643. Up 15 days in a row . Technically it broke out through its major resistance level 4291 (this year’s high)  The BDI has rallied about 2400 + points since late September.

The BDI is starting to go PARABOLIC – starting to move up too far too fast-inevitable result is a crash and burn. DANGER for Bulls

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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 fell  -0.32% yesterday. The dollar closed at $75. 06. This is back above the major $75.00 support level. 

CAUTION – The first breakout (up or down) is often false. This happened two days ago Right now the momentum (since the long term trend is down) is with the Dollar bears and consequently stock bulls

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

The index closed at +12.85 This indicates stocks are slightly overbought 

Even though the Dollar Rules consider overbought levels (60+) on this index a point to lighten up on stocks)

Key to chart – Zero  is roughly  neutral and roughly 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 well over a week – see past updates

Investors – Folks who buy and want to hold for months/years.

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.

Repeat – Clearly NOT the time to be adding long positions.  We’re close to new highs in major positions and the BDI looks like its started a parabolic run. (GLD might be an exception here and buying a small dip still makes sense)

MOO agriculture ETF has just broken out of its trading pattern to the upside and a minor position could be started. (more later) Still considering minor position in  VNM (Vietnam ETF – has dipped recently)

Obviously would like to buy more but waiting for a more oversold environment. Looks like we may be starting a correction.

Traders – Folks who day trade or are in and out of stocks within a month or two

AMZN & NVS positions are on hold right now. We’ve already sold 1/2 these positions.

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. But subject to further change back to neutral since breakout was weak.

Long Term Outlook = CAUTIOUSLY BULLISH