James Verone

Sorry Server was down most of the morning  - so here’s a quick mix.

• Markets rallied in pathetically low volume.  Our MO indicator says thing are not oversold and back to neutral. Financial stocks took a hit yesterday.

• Greek gov’t has confidence vote tonight. It will pass. This should rally stocks. Key is the size of demonstrations in front of parliament. Greek people feel banksters share responsibility for crisis and should be held accountable not just people of Greece.  This crisis through out Europe is going to be twisting in the wind all through summer and beyond. Besides its debt problems Greece now has to pay almost 30% interest rate on its bonds.

• Banksters are calling the shots in Greece as they have since the 2008 meltdown. “The epicenter of the new crisis is Greece, which epitomizes the folly of banker rule.” - Bob Kuttner

• SHIBOR rockets to 8.6% – Translation =  China has a significant exploding inflation problem that crucial to economic worldwide growth.  Not good news.

• Lots of blogs headlining how you can get health care for $1.00. Story of James Verone who desperately needed medical attention so he held up a bank for $1.00 then say in a chair to wait for police.  He now gets free medical care. – The money quote from Verone - “When you don’t have your health you haven’t got anything.”

• Read of tea leaves – short term rally continues on Greek news. No change in long term outlook or strategy.

Paul’s Corner

1^st Official Day Of Summer! Wow! Market futures are up, time to jump back into the pool?

Yup at 6:30 this morning market futures are up and you know what that means, once the market opens at 9:30 all bets are off. Great place to put your money, eh?

Yesterday was an up day and many of the indexes finished up but it was done on low  volume.

The bulls are trying to make a stand but there appears to only be a few bulls ready for action.

David Garlardi, an HGSI user, posted a link to an interesting article “Economies are slowing around the world…

LINK

The last line is important “The US dollar gained against the Aussie dollar and other major pairs as investors’ risk appetite diminished following the minutes. ” If this indicates a change in the direction of the US dollar, a strong dollar equals a weak market. (Interesting, the world economy is slowing, I GUESS Obama’s policies really don’t work)

Bio-Tech led the way yesterday in the high demand stock search, 2^nd and 3^rd have some of our old favorites:

Apparel Accessories & Luxury Goods (5.00%, 5 securities)

• Fossil  Inc. (FOSL)
• Lululemon Athletica  Inc. (LULU)
• True Religion Apparel  Inc. (TRLG)
• Under Armour  Inc. (UA)
• Warnaco Group  Inc. (WRC)

Specialty Stores (4.00%, 4 securities)

• OfficeMax Inc (OMX)
• Signet Jewelers Ltd. (SIG)
• Tractor Supply (TSCO)
• Zale Corporation (ZLC)

So what’s the market going to do today, futures are up this morning, is this a new morning in America or another fakey before the BIG crash? Let’s load up Quote Tracker………here we go folks another day of fun!

Remember, you are responsible for your investment decisions, and I am not.  Please do your diligence, and please take ownership for your actions because I‘m sure not going to.

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Longer Term Outlook

Neutral/CAUTIOUSLY BEARISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

Robert Reich

Economics in Two Minutes

In two minutes 15 seconds a Rhodes scholar, renowned economist and former Labor Secretary explains the structural economic problem of the USA – LINK

The video does a much better jobs than the points listed below.

• Since 1980 our economy has almost double in size, but (adjusted for inflation) salaries have barely increased. Where did the money go?

• To the super rich (top 1%) who used to take home 10% of the wealth & now take home 20%. It’s given them a total of 40% of today’s total wealth in the USA.

• With the wealth they buy political power. In 1980 their tax rate used to be 70% and now its 35%, and a major major portion of that wealth is taxed at 15% – the tax on capital gains. The wealthiest 400 only pay a 17% tax

• This created a huge budget deficit. Schools, roads, and many safty nets that protected the middle class have and will be further cut

• America’s middle class no longer able to survive on the scraps left by the wealth  turns on each other. The flames of hate are even fueled by the wealthy. – Union against non union, native born against immigrant,  one race against another, one religion against another, public employee against private.

• The middle class no longer able to borrow as before  and diminished in assets = an anemic recovery. The only way we can have a strong economy is to have a strong middle class.

We all want government to be more efficient, but its long past time for the USA to start building its middle class like Brazil, China and so many other countries are doing.

Thanks to several of you who sent me this video and Paul for posting it in the comments section.

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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!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

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Technicals, Fundamentals & Analysis

• The Silver Lining - If some sort solution to the Greek crisis occurs, all those put buyers will get caught with their pants down and we will have one hell of a rally. Usually this number of puts indicates a market reversal. However fundamentals over Greek debt rule.

• The McClellan Oscillator (MO) chart rose to -31.20 ( below -30 = somewhat oversold, below -60 = oversold, below -90 OMG oversold) The lower the MO goes the more the chances for some sort of rebound. Stocks are now moderately oversold.

• $USD The Dollar fell a significant -o.79% Friday. ( +/- 0.50 is a significant move) There have been many major moves in the dollar as the Greek crisis builds. Although we had a big fall Friday, the last 7 weeks are clearly bullish.  This is money coming out of the Euro (because of Greece and into dollar) and moving into the dollar. For stocks trend = Bearish

• Reading The Tea Leaves – The training wheels come off the US economy June 30th as QE #2 ends. Greece’s debt crisis overshadows Irelands (just as bad) and Portugal, Spain and Italy follow. All this is exacerbated by unregulated derivatives that the US introduced to the world’s banking system. It’s impossible to to call exactly when Greece defaults (some say it may not default) and how the panic will spread.  However there is great downside risk.

• Reading The Tea Leaves - Longer Term (repeat) -  ”See May 20th blog for forecast for this summer.“

Our bull market has survived a a catastrophic nuclear disaster, bank foreclosures, unemployment, shadow capitalism, revolutions and a whole lot more as the Fed had our backs with liquidity. Now that liquidity (QE #2) is over in two weeks and if Greece collapses Investors predicts – the bull will die.

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When Bears Rule

Right now, instead of  joining the Chicken Little’s running around with their heads chopped off many sophisticated investors are protecting their assets

We’ve learned from experience everything from cash to housing values can go down in value. There seems to be NO financial armageddon looming, but their are ways to buy insurance or hedge against bears ruling. Investors has recommended several and they are listed in the POSITIONS Section of the blog and below

If the markets go down you can make money by using ETF’s (market baskets of stocks) that short the market (they go up as stocks go down). Here’s a list of some from the least risky to the most.

• SH (Short the S&P 500)
• SDS (2x short S&P 500)
• TZA (3x short small cap stocks)
• More sophisticated investors can place calls on these three ETF’s or puts on long ETF’s, or use puts,spreads etc.

By no means is Investors411 recommending that anyone go all in any of the above positions. But they can help if bears rule. You can also follow Investors411 hypothetical portfolio below. Since Investors made its May 20th negative call on the US stocks the benchmark S&P 500 has gone down from @1340 to 1270 or lost about 5%.

• SH gained @+5%
• SDS gained @+10%
• TZA gained @+17%

Simply put stocks go down and you make $. Investors has outlined some of the risks since 5/20 (today – see Silver Lining and Greek debt above for updated risk assessment)

Obviously some strategies can get complicated and difficult. You have to choose just how much  you want to risk. Do you want want to hedge/insure against a small portion of your assets,  go all in or something in between.

Bottom Line - Using an ETF that shorts the market is no different/riskier than using one that goes long. The skill/luck is choosing the right direction and evaluating how much to risk.

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Positions

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

NLY - Annaly Capital Mgt. Ultra high dividend stock. Bought about a month ago.

TZA - ETF that is 3 times short small cap stocks Bought 1/2 TZA position at 39.75 about  10 days ago. Have already cashed in a 6% gain in TZA.  Hope to buy more today in rally.

Repeat Strategy remains

• Short any rally - Investors411 will use TZA (3X short small cap stocks) and SDS (2x short S&P 500 more conservative) .
• Sell long positions into any rally -

Disclosure - I own NLY, & TZA as well as a group of dividend stocks – I buy all stocks mentioned in the hypothetical Investors411 portfolio.

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Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative comments section every day.

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The Fed has moved from an expanding money supply to a neutral – No QE #3. Congress is threatening to contract the money supply. “We [the USA] need to grow at this point more than anything else.” Investors411 outlook will remain negative on the USA unless the Fed and/or congress return to more pro growth policies and/or Euro defaults are solved.

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Longer Term Outlook

Neutral/CAUTIOUSLY BEARISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

A TV AD

Why start with A TV ad? Because its the most memorable minute long TV add I’ve ever seen. Its based on a movie The Exorcist. Many Thanks to subscriber ER for sending it in.

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#37

This is no surprise – Another major scientific study of our health care system in the USA ranks us as #37 in the world WE, again no surprise, pay 50% more for this health care than the European Democracies. If you can get into one of the top hospitals you’re in luck, otherwise hope you are in another major democracy that has decent heath care if you get sick.

If independent scientist study something, mainstream media almost always ignores it.

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England Get’s it Right

Congratulations to England –  “Finance minister George Osborne announced a major overhaul of Britain’s banks, approving a separation of their retail and investment businesses to help avoid another global financial crisis.”

Major investment banks backed up by CNBC, Fox News and others are screaming at Obama’s weak financial reforms here. Political candidates are falling all over themselves courting Wall Street banks. Chances of reform like this happening here are about the same as either the Red Sox or the Yankees NOT making the playoffs.

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Greece

Almost the entire investment world’s eyes are focused on when will Greece default. Some key points.

• The major point here is this will be no ordinary default – There are trillions in derivatives on Greek loans that will have to be paid when Greece default. Like the Lehman collapse this multiplies the seriousness of the situation.
• All major banks are trying to find others that will buy their toxic Greek derivatives. Perhaps a major reason this process is going so slow.
• Ireland is in the same boat and perhaps Portugal (China seems to be backing them)
• The chances of Greece NOT defaulting about as high as the Philadelphia Philies NOT getting into baseball playoffs.
• Another reason to be bearish on US markets - The dominoes – Greece defaults = Euro falls = dollar rises = US stocks go down. Also – Who knows how many derivatives any bank has on Greek debt?

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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!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

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Technicals, Fundamentals & Analysis

• The McClellan Oscillator (MO) chart rose slightly to -51.27 ( below -30 = somewhat oversold, below -60 = oversold, below -90 OMG oversold) The lower the MO goes the more the chances for some sort of rebound. Obviously, we’re now close to -60 so pressure for rebound/rally is building

• $USD The Dollar rocked higher two days ago +1.83% and was flat yesterday +0.01% (consider that Investors uses +/- 0.50 as a significant one day move) It broke out through resistance and formed a higher high on its chart two days ago. Yesterday  confirmed the massive move higher. . Big time bullish for dollar and for stocks which usually move inversely to the dollar = Bearish

• CHART OF THE DAY – show inverse relationship between the dollar (UUP ETF) and the S&P 500

This is a 6 month chart. Dollar up usually means stocks down. Dollar down usually means means stocks up. Hopefully you can see why Investors411 uses it as a forecasting tool. The big volume shown under the end of April/beginning of May low makes that figure a strong support level.

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• Reading The Tea Leaves - Short term (repeat) - Staying with the same dead cat bounce pattern of lower highs and lows till it breaks down. Pattern in place since early May The dead cat rally bounced Tuesday and fell Wednesday and held/confirmed those losses Thursday = Bearish. Investors411 predicted an MO of -90 to -120 this summer. It may come sooner than expected.

• Reading The Tea Leaves - Longer Term (repeat) -  “See May 20th blog for forecast for this summer.“

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Positions

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

NLY - Annaly Capital Mgt. Ultra high dividend stock. Bought about a month ago.

TZA - ETF that is 3 times short small cap stocks Bought 1/2 TZA position at 39.75 last Thursday.

Gold/Silver - Repeat - No trends except gold is out performing stocks and silver. A major editorial on this in near future.

Repeat -  More likely to add TZA than subtract. Would buy more TZA in small rally. I’ve been preoccupied with grandkids so have NOT had a chance to trade. I would have bought TZA yesterday and will try today to add to TZA on dip.

Repeat - Investors411 recommends using TZA or SDS as a hedge/insurance against losses in high dividend stock NLY and especially if you own other dividend stocks (see past month+ blogs on dividend stocks.)  This way you protect prices of dividend stocks against falling prices and still collect the dividend.

Repeat Strategy remains

• Short any rally - Investors411 will use TZA (3X short small cap stocks) and SDS (2x short S&P 500 more conservative) .
• Sell long positions into any rally -

Disclosure - I own NLY, & TZA as well as a group of dividend stocks- I buy all stocks mentioned in the hypothetical Investors411 portfolio.

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Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative comments section every day.

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The Fed has moved from an expanding money supply to a neutral – No QE #3. Congress is threatening to contract the money supply. “We [the USA] need to grow at this point more than anything else.” Investors411 outlook will remain negative on the USA unless the Fed and/or congress return to more pro growth policies.

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Longer Term Outlook

Neutral/CAUTIOUSLY BEARISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

Hope symbol from Iran’s Green Revolution – See Iran quiz below

Financial Hypocrisy

Investors411 has thrown a lot of venom at deregulated, over leveraged, opaque, Shadow Banks. However, the reality is the Pied Piper that led the Shadows down their path is a conglomerate of US politicians.  These same politicians are the ones who have been spanking Goldman Sachs and attempting financial reform.

The head line on lefty blogs is something like Republicans Filibuster on Financial Reform Crumbles. However Popeye in the comments section of the blog recognizes the enormous conflict of interest the leading Senate Democrat Senator Dodd (Chair Financial Committee) has. What good is breaking the filibuster if the end result is going to be milquetoast?

Tuesday, Investors411 referenced Luke Wilson’s (from Seeking Alpha) grading system for financial reform Today Peter Schiff (Yahoo Finance) Slams the Senators trying to reform the system.

Iran Quiz

On June 14th 2009 Investors411 began along  series on Iran’s election results. “Democracy Hopes and The Dictator Replies.” The dictator, of course was holocaust denying Ahmadinejad &( supreme leader) Khemenei. The whole world watched in horror as the dictators slaughtered innocent demonstrators in the Green revolution. Obviously Iran is the #1 country in the world you’d least likely want to see have nuclear weapons.

In the USA many stereotype, fear monger, and over generalize – Examples – All Arabs are the same, Let’s go war against Islam, The only good Muslim is a dead Muslim.  So lets take a pop quiz.

1. Is Iran an Arab country?
2. What percentage of students entering university in Iran is female? (be within 20% of correct answer)
3. What percentage of the Iranian population attends Friday prayers? (be within 20%)
4. What percentage of Iranians in 2008 said they had an unfavorable view of the American people? (be within 20%)
5. True or False: Did Iran considered the Taliban to be an enemy after the 9/11 attacks

I’ll Publish the results later today in the comments section of the blog.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Markets recovered a small portion of the previous days losses in decreased volume = Neutral/Bearish

The Fed came through – held interest rates and issued basically the same we are going to keep interest rates low a long time statement. This plus a ever so slight improvement economically had the support of all but one Fed governor who also in the past has been somewhat more aggressive in raising rates.

The big news was still the Greek debt crisis. Massive indecision over what the future holds – See the dollar below. = Bearish

XLF - The Financial sector ETF is the indicator to watch as Senate begins to debate Financial Reform. XLF is dominated by the big shadow banks – If it goes down that means financial reform is going to force transparency and actually make a significant difference. If not the shadow banks and their lobbyists have won.

The XLF could also be impacted by the widening Greek debt crisis.

We’d need some continuing bad news on the spreading Greek debt to stop the bulls. When all is considered (Yields on 2 year  Greek bonds are 20%) the fact that major US indexes are a few points off their highs is remarkable = BULLISH

Stimulus packages across the world, emerging markets improving GDP are still driving markets higher. = BULLISH

Significant Indexes

• McClellan Oscillator rose slightly to  -24.82 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is  NEUTRAL territory, but we are closer to oversold than overbought.
• US Dollar – broke out to a new yearly high yesterday. Up +0.24% yesterday. The trading range was a huge 1.75% This indicates huge indecision. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules. Is very important.  Dollar closed at $82.33. This high is virtually entirely due to problems coming out of the Greek debt crisis. Rising dollar almost always + falling stocks.

Positions

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

Waiting for a lower reading in the McClellan to invest. Although for traders who can tolerate the risk (not longer term investors) a -25 is better than 0. A risky buying window is open. Long term  Investors should wait for more oversold conditions. .

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Goldman CEO Lloyd Blankfein in front of congress

A Second Global Meltdown?

“Clearly the World Needs More Regulation” - Lloyd Blankfein CEO of Goldman Sachs

Well, its at least gratifying to see Blankfein join former Feed Chair Greenspan in the realization that Capitalism can’t regulate itself. Goldman’s CEO and executives testified in front of congress yesterday. Meanwhile across the pond Greek derivative debt crisis was expanding. (See more analysis under KISS Stocks – TF&A below)

Goldman’s is taking it on the PR chin from the clowns in congress who deregulated the financial industry. The Democrats have a weak financial reform bill and are getting pressured by everyone from Republicans to Warren Buffett (see yesterday’s Investors411) to water it down.

You add the Greek derivative meltdown, & the fact that this is likely to spread to most of the countries that bought into the over leveraged unregulated American capitalist system = a possibility of a second meltdown. Countries facing same kind of unresolved problems include PIIGS – Portugal, Ireland, Italy, Greece & Spain, plus most former Russian satellite countries.  That would be one massive default if it comes to fruition.

Look at what it took to bail out the USA and the world from the first meltdown.  Remember fear spreads about twice as fast as greed according to behavioral economics.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Big time toasting in big time volume for stocks across the board. All major indexes moved @ 1/2 way back toward their 50 Day Moving Averages (see charts on right side of blog for 50DMA)

Financial Pandemic is spreading.  This is centered on Greek debt and seems to be spreading to the PIIGS (Portugal Ireland, Italy, Greece & Spain) The whole world will be impacted if it gets out of hand.  Last week Investors411 expected this crisis to explode. The call was just a bit premature. How this is going to impact markets and the world from CNBC & NYT & Seeking Alpha

The last of the above links also focus on Goldman Sachs which is starting to unravel some more in front of congress. Title of this editorial should give investors pause  - As Scary as it Seems, Greek Debt Crisis Won’t Spawn Second Global Meltdown His stock solution for investors is buy if Greece defaults – But what if all the PIIGS & all the former Russian satellite countries also default? = A Second Global meltdown!?

Fed announcement on interest rates today at 2:15 EST -Will they in some nuanced way change the language of their statement on interest rates? Best read of tea leaves NO = Bullish Will this make us forget the problems across the pond or our own mess – NO = Bearish

Best read of tea leaves - Yesterday’ stock drop was a bit of a short term over reaction to a much more serious long term problem. For US & markets markets outside Europe the key technical indicator is the dollar (% other currencies outside Europe) keeps going up our goods will cost more to exports and profits will shrink.

All of this is in directly and indirectly related to Goldman Sachs.

• Directly – GS is involved in trading derivatives on Greek debt
• The whole issue of transparency & corruption evolved from American shadow banks and is a huge factor in Greece and the USA’s fiscal viability.

Significant Indexes

• McClellan Oscillator fell dramatically to  -33.55 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is  NEUTRAL territory, but we are approaching oversold.
• US Dollar – had the largest gain of the year (maybe #2 -I’m eyeballing a chart) +0.93% yesterday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules. Is very important. Remember, dollar down almost always = stocks up and visa versa. Bottom Line – Dollar gain was HUGE and we are now just below breakout levels for a new yearly high. If this breakout level falls and the dollar soars stocks will take it on the chin.

Positions

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

Check the Positions section for changes in longer term trades. As mentioned yesterday TEVA had broken support so was sold.

Investors 411 is still long IMAX, EWZ, ESRX & CNK

Investors – Be Happy – If we get a meltdown and the McClellan reaches oversold – its time to buy again.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Dr Delos Cosgrove – From Fortune Magazine

The Cleveland Clinic

There is something in this Fortune Magazine interview of  Dr. Delos Cosgrove, head of the world famous Cleveland Clinic (#1 ranked in cardiac care for last 15 years – yet charges much less than other major hospitals) for all sides in the Heath Care debate.

How does he get his world renowned doctors to work for salaries? His concepts on health care? His ROI (Return on Equity) No yelling, screaming and politically motivated statistics.  Agree or disagree with Dr. Cosgrove – but the 40,000 who work for the Cleveland Clinic get results.

Nothing else, this one editorial is worth focusing on.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

A significant rally (all major indexes up over 1.00%) collapsed in the last hour of trading. Biggest single factor behind the fall was the rise in the dollar against other currencies. The last two times we had a breakout of the dollar (click on chart to see trading pattern for early Dec. & mid Feb. below) the dollar rose another 2 to 4% after the breakout.  The dollar rising historically is NOT good for stocks.  We had our rally of the last few weeks when the dollar was flat.

The problem specifically is Greece, but other European countries are in trouble. (Portugal, Italy,Ireland & Spain plus many former USSR satellite counties)  A third cause of Greece’s problems not mentioned yesterday is corruption or total lack of transparency.

We also have a significant problem rising and that is in long term  government bonds. A sale of 7 year Treasury bills did not go well. CNBC analyst gave them a D. The 10 year T bill has exploded higher the last two days and broken out of its trading pattern. Notice strong positive correlation between the 10 year and dollar.  Basically interest rates (yields) on the ten year are going up. T bill now at 39.01 which roughly translate to a 3.9% interest rate.  Over 4% or better 4.25+% and the whole recovery is in trouble.

The world’s economically interconnected. The fact that our stock market stayed strong despite a rising dollar shows strength, (hope this is what JAB is trying to say in comments section) but its starting to wobble.

Two fundamental factors may help stocks - We are nearing the end of what looks to be a relatively good quarter for stocks and the monthly jobs report late next week has three reasons to expect a decent number – new government census jobs, snow distorting calculations, and some recent weekly gains.

Explosive situation could go either way The rise in the dollar/10 year treasuries almost merits taking out the “Lost in Space” TV show robot with all the bells and whistles and shout DANGER WILL ROBINSON DANGER DANGER As many of you know the DANGER signal is  as loud as I shout about impending doom. If the dollar & 10 year treasury yields move higher (so will interest rates) not only are stocks in trouble, but so is the whole economy.

We are running up to a cliff.  Today and next week are critical for the dollar and the 10 year Treasury bond. Therefore also critical for stocks and the economy.

Significant Indexes

• McClellan Oscillator fell to -16.92 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 - rose another +0.32%. This confirms the breakout and huge move of two days ago. Dollar closed at $82.16 = Bears Rule
  

Positions

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

All our 3 D stocks, the ones Investors 411 owns and hopes to own are significantly outperforming the overall markets.  Short term – Dreamworks Dragons movie opens this weekend and Titan’s next weekend are adding fuel to their rally. AIWL is still packing them in at IMAX, but How To Train Your Dragon starts today.

Going to take profits on long term holding FXI

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Democratic congressman Jim Clyburn

“Baby Killer”

YOU, in the comment section of the blog, have had a rational debate over the tax implication of the health care bill starting started by John Sovjani and now ending with a NYT article from Ewanapat that shows, in part, who benefits and who pays. The rest of the nation has not.

One Texas Republican congressman screamed “Baby Killer” while a Democrat spoke on the heath care bill. Later he apologized, but this calculated move will bring huge amounts of cash into his campaign for congress. Across the country Death Threats, vandalism, break ins, gas lines cut, and even photos of hang man nooses have been sent to at least 10 Democrat congressmen and women who voted for the health care bill.

Here’s a report from yesterday. From today, where families of Democratic congressmen who supported health care are moving out of their districts because of the death threats. Sarah Palin’s website is painting bulls eye’s on targeted democratic congressmen CBS reports

When Black Democrats like congressmen Jim Clyburn (D – Majority Whip) gets a noose & death threats faxed to him it is exactly what happened to those who dared stand up for civil rights in the 60′s.

No matter what side of the health care debate you are on – if you do nothing you condone the behavior. At least tell a co worker or friend that this kind of tactic is unacceptable.

Chimerica

(part 2)

The USA has lost 2.4 million jobs because of the trade gap with China -Study reported in WSJ. Yesterday, our House Ways and Means Committee, announced it was holding hearings China artificially keeping her currency pegged to the USA’s. Niall Ferguson is a most outstanding source of info on this.

Bottom Line – We need many of those 2.4 million jobs back in the USA, but a trade or economic war with China would be devastating to the world’s economy.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

The US dollar exploded higher breaking out of its trading pattern. The strong inverse correlation between US stocks and the dollar once again took hold pushing US equities lower. Stocks fell in basically higher volume.

What’s happening is that Greece and some other European countries involved in the Common Market have weak currencies and the relative to them the dollar is stronger. These problems have two root causes -

• The same financial meltdown that hit us is hitting them. Remember, the reckless lending of super banks/shadow banks was a global phenomena. In this case the Greek government aided by Goldman Sachs covered up their debt.
• Greece and some other European countries have swung too far into socialism – example may can retire at 50 in Greece with almost full benefits. This is the exact opposite of the USA which has swung too far into greed based capitalism.

Expect a rebound as momentum is still clearly with the bulls and the McClellan oscillator turned red (below zero)

Significant Indexes

• McClellan Oscillator fell to -1.66 yesterday. +60 or above = Overbought -60 or below = oversold. StockCharts has a better version of the McClellan chart ($NYMO) LINK. – Investors411 manta is its much better/safer to buy when stocks are over sold and sell when they are over bought. When the $NYMO is around zero those who can accept more risk can nibble on stocks & ETF’s.
• US Dollar - Exploded higher +1.34%. Anything over 1.00% is considered a huge move and this move was also a breakout to a new high.

Positions

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

Our remaining China position FXI (Also EWZ & MOO)

Over the course of the last few months Investors has decreased FXI holdings from a high of almost 25% to the current 5%. China has been an investment mainstay of Investors411 for many years. Unfortunately many imbalances (see yesterday’s Chimerica piece) especially with the US and a over supply of public and retail housing is clouding the future.

This is also true for emerging markets that have been under performing US stock markets.  Technically after years of out performance this was bound to happen regardless of the fundamental problems in China. Our other major foreign investment. Brazil, EWZ is also under performing. Again over many months we have reduced holdings from a high of almost 25% to 5%. Brazil has a presidential election and the economically successful “socialist” president of the last 8 years is not running. Markets hate change.

The overall problem is does China have a soft landing or a hard one?  Yesterday, our House Ways and Means Committee, announced it was holding hearings on  China artificially keeping her currency pegged to the USA’s. Niall Ferguson is a most outstanding source of info on this.

MOO is an agriculture ETF whose growth relies on emerging markets buying US agricultural products and equipment.  Investors has cut this from 10% to 5% position.

Strategy – Bottom Line – Will drop remaining 5% in FXI into a rally.  Investors is building it own market basket of 3D stocks and health care stocks. (see past blog posts) Investing in ETF’s  (example TYH) that do 2 & 3 times what US indexes do when they are oversold.  Also considering YOUR stock list for investments.

Apologies for everyone who just wants to buy and hold forever.  It’s just NOT your parents market. Blame technology.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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Greece, Debt and YOU

You may or may not know Greece is having a problem with its financial debt. (NYT article) This small country, thousands of miles away is the tip of the iceberg of unsolved problems that directly relate to YOUR financial well being. Let’s put this in Bullet points

• A major reason Greece is in such trouble is because, like AIG and so many homeowner mortgages, Credit Default Swaps were placed on their debt. They still are being place on them today by shadow banks and hedge funds (Aside – hedge funds – are the equivalent of “economic hit men” and are perhaps even worse than  shadow banks – more later)  So there are a whole crew of hit men or CDS traders who will make money or are investing to see Greece fail and default on their debt.
• If Greece goes down, a lot of other European countries, who are in an almost similar situation, could follow. The list includes Ireland, Portugal, Spain, England and former Russian satellite countries. “Economic hit men” (Harvard/Oxford prof Niall Fergeson’s term for hedge funds) are the vultures circling here waiting to make money off the kill.
  
• California, Michigan Rhode Island and many US states are likewise in the same boat. Without the Stimulus package they could have gone under already.
  
• So is the USA – Except we have printed, & borrowed over S10 trillion to temporarily fix our problems.

This recovery, so far, is based on smoke and mirrors – Not transparency and rules that keep economic hit men like the traders at from AIG, or hedge funds from bringing the financial world to its knees.

Investing bottom Line - For years it was easy to recognize that globalization economically favored both emerging market growth and the privileged/wealthy class in the USA. Investors411 was very successful and careful in choosing investments outside the USA.  That potential still exists. However, an unregulated shadow financial system full of roving economic hit men exits. So, we have to move more cautiously, because the chances of economic bubbles growing and bursting is still INCREASING.

Therefore, using technical shorter term oscillators like the McClellan makes more sense right now.  It, no longer your parents buy and hold forever market.

Coming next – Economic Hit Men – Hedge Funds

Bloom Box (con’t)

About the most discouraging news, when you separate the hype is that the Bloom Box has not yet been built as an “in home power plant.” The technology may not be revolutionary, but who cares as long as it works and can be put into production sooner rather than later.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

The day started out as a disaster for US equities and recovered a lot of those losses. Even though we closed down in higher volume bulls had something to be happy about because of the recovery.  It seems like this market is looking for an excuse to rally.  It’s fundamentally hard to understand why, but some pretty bad news recently including weekly jobless data, Greece (see above) increased housing problems, & double dip inflation fears  yesterday, doesn’t seem to be able to sink stocks. Markets holding their own or have slight losses on bad news is a bullish sign.

Therefore, best read of the tea leaves is that we will hit +60 on the McClellan before we hit 0.

Significant Indexes

• McClellan Index fell to +28.62 We are somewhat oversold, but have a ways to go to +60 Oversold territory.

In answer to an email question – how did I come to determine +/- 60 as overbought or oversold? The McClellan Oscillator on the NYSE is one of dozens of indicators that show the market oversold or overbought. I like it because it is relatively simple.  Most stocks follow the trend of the entire markets. (say @ 80+%). This is especially true for, the ETF’s which are market baskets of stocks.

Click on the chart of he index above and adjust it to 2 or 3 years.  Note every time chart went over +/- 60. What I did then was also put up a chart of S&P 500 adjusted to the same time and compared the two. It’s not a perfect correlation, but if you go long (buy) when the McClellan dips to -60 or below you or sell (or go short) when it reaches +60 you would have done better. There are some weaknesses in just using the +/- 60 system that I’ll go over at a later date.

Positions

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

Will be lightening up when/if positions reach oversold 0n McClellan Oscillator.

As stated on Tuesday –

I’ve also set what’s called a stop/sell orders  on at @ 2% above what it was bought for

• recently bought (added to) EWZ
• 1/2 of MOO, a longer term position.
  
• The remainder of THY

Came very close yesterday to reaching stop/sell or selling TYH. This AM I raised stop/sell order to about 3% above what they were bought at. Will also, preferably, sell these positions if/when stocks are overbought.

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.

Other stocks on YOUR watch list – the earliest I would nibble is when the McClellan Index falls below 0 (zero)

Not adding to any major positions until markets become oversold again.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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Health Care Debacle

There’s something in human nature that loves it when you can say I told you so.  Health Care reform attempts are crumbling and just like the greedy Wall Street Shadow bankers Anthem Blue Cross of California can’t wait to raise prices 39% on March 1.

Everyone knows that our long term debt problem is centered on a massive growth in military expansion and health care. Obviously unsustainable if you keep cutting taxes. The problem in health care is we spend far more on health care than we get in outcomes There are over two dozen industrialized democracies who pay far less and live far longer.  There may be problems in their heath care systems, but nobody’s voted to go back to a system like the USA’s.

One wonders how much of this 39% increase did Anthem use to defeat health care reform.

71% of Americans – Palin NOT Qualified to Be President

Latest WaPo/ABC News Poll shows Sarah Palin is NOT qualified to be President.

But,  according to those of you who comment on this blog – Is Barak Obama Qualified to be President? – Yes, this blog has been tough on Obama, but does his latest attempt to “begrudgingly” support  big bonuses on Wall Street in the very companies that help cause the meltdown  bring his credibility into question?

Paul Krugman – ” I’m with Simon Johnson here: how is it possible, at this late date, for Obama to be this clueless?“

Greece

The whole world waits to see what’s going to happen with Greek debt. Thee is a big meeting today in Europe. As far as stocks are concerned the sooner this is settled the better.

Greece like the USA and many European markets ran virtually “unregulated free markets”. Credit Default Swaps are still being traded on the bonds that Greece uses to finance its debt.  Someone has to pay for Greece financial system going overboard. Once again the end result will be Socialism for the rich and the working poor will feel the heat.

Dubai had the UAE to bail them out and Greece has France/Germany.  But there are lots of other countries out there who will feel the aftershocks of 2008 USA “unregulated free market” meltdown. Once again socialism for the rich and capitalism for the poor who pay and pay and then have their children pay and pay.

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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!

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.

Basically a nothing day.   The whole world waits to see what’s going to happen with Greek debt. Thee is a big meeting today in Europe. As far as stocks are concerned the sooner this is settled the better. We have a concept, not a specifc plan.  When a plan comes expect a short tem rally.

Greek bailout – Short term good news, but long term bad news. The more the Euro countries have to bail out the lower the Euro goes. Therefore relatively the dollar goes up. This costlier dollar makes our goods cost more in Europe and hurts US exports.

Oversold market’s natural direction is up.

Significant indexes – Forecasting tools for market direction

• McClellan Index fell to -32.47 =Moving away from Oversold. We’ve passed -60 or oversold levels twice recently. 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. -32.47 is a better entry point than +32,44, but not as good as -60 or higher and beyond.

Positions

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

Thinking about nibbling on ETF’s & stocks (see yesterday) as long as McClellan stays in the red.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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!

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