Investors 411 Blog

Guest Editorial – A Call to Arms

Let’s march on Washington! – By Bob Sadinsky

What good does it do to keep calling or writing to your spineless legislators! For decades now starting with the Vietnam War,public opinion has been aligned with stated Democratic positions but the GOP with help from ConservaDems has thwarted  Progressive issues. The GOP has fought tooth and nail to prevent,Unionism,the 8 hour work day,overtime, Equal pay for equal work.  They fought to deny health insurance for decades and seat belts and mining regulations. They defanged OSHA and the EPA and beat back the ERA! They fought against Medicare and Social Security,viciously. Nixon actually ran as a peace candidate for his second term. He promised to end the war and then he tried to obliterate SouthEast Asia and only ended the war when we had actually lost.

The GOP revisionists today  like,the swiftboaters ,say we lost because we lacked the political will to win. They can’t answer simple questions like what was our strategic interest there and why did you ask Johnny to fight and to die there?  Kerry tried to do that and the press allowed the swiftboaters to make the real War Hero look like a wimp  and a traitor next to Bush and Cheney,the draft dodgers. No one can answer that today about Afghanistan or Iraq yet we are again expanding an unpopular war! The GOP has been so wrong for so long,it’s amazing they are still around.

Unless it violates someone’s rights,in a democracy like ours,the public sentiment of the majority should rule! It doesn’t!! Oh,I’m wrong. If you have enough money to spend you can legislate to strip a hated minority of their basic human rights under the Bill of Rights! Today it’s Gays. Tomorrow,it’s you!

Bush and Cheney declared you are with us or against us and proceeded to muzzle our rights. They demonized the Press. The Right Wing Liberals demonize Liberalism and Progressives. Their ability to turn the US into a Fascist State,….grows. I shudder to think what will happen when the Dems lose Congress the next time. I don’t think the Dems will be left with the ability to filibuster to prevent draconian measures.

Progressives and Liberals have to take to the streets or we will be marginalized and swept aside! Use your voices before we lose the ability to do so.

Bob, an old friend and fellow artist, is a frequent critic/commentor to Investors411. Read his comments on right hand side of blog.

Your Stocks Picks

Perhaps you want to put some of these in your holiday portfolio stockings. I do NOT recommend any but can give you a little fundamental and technical analysis . That said, some many look like pretty good buys. Remember this analysis barely skims the surface and professional investors have a big advantage because they have banks of computers and armies of people going over each investment they make. You can see the Chart by clicking on the ticker symbol. The following are stocks that only got 1 recommendation. I’ve changed charts to 1 year charts to get a long term outlook

• MVIS – Microvision Inc. – This stock has gone all the way from below 1 in March to above 5 and has settled at just above 3. This is exactly where its 200 day moving average support line is. MVIS (laser projection devices for head mounted displays & hand held devices) is at its inflection point and I don’t know enough about the fundamentals to even make a guess on their future. However technically there has recently been one strong volume rally day and that’s bullish.
• SEED – Origin Agritech LTD – Talk about shooting up. SEED, a top player in the seed industry in China went from 5 to 14 in late Nov. in truly massive volume on mews of its genetically modified corn being approved in China. It has  now settled at @10. Really tempting buy the dip opportunity. Still a long way from 50 day moving average at @7.5. This stock often mentioned with another – FEED
• NVS – Novartis – Drug maker that Investors411 owned.  The swine flu added to the value of this European stock. We got out at the high and NVS dropped and is now flat. Rising dollar may be hurting the stock price since this is a European company. Done for now – too many other fish in the sea.
• FCX – Freeport McMoran – Copper and Gold – Basically a commodity or China play. Copper and Gold supplier. This big company has outperformed China and gold. I’d rather own the ETF that tracks copper, but a decent play. Right now it has retreated from high and forming a base.
  

Some of the stocks from yesterday and today may be hidden gems for traders. Tomorrow – The stocks that got more than 1 vote

KISS & Stocks

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage	Volume
Dow	+0.50%	down
NASDQ	+0.67%	down
S&P500	+0.36%	down
Russell2000-	+0.81%	-

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

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

Technicals, Fundamentals & Analysis

Stocks rose for the second day in a row despite a rising dollar. Bullish news for stocks despite weak volume. Traders, more and more, look like they are coming around to the belief that we will have a V shaped recovery in the USA.  Emerging markets in the shorter term led the world. Now the USA seems to be the locomotive.

Caution – These are not big games and especially VOLUME is weak. However, the cumulative move is bullish especially for USA. Short term bullish move here will positively impact world.

McClellan Oscillator at +31 (“a bit overbought” – see below) gives us some wiggle room for stocks to move higher before we reach overbought levels of +60 = Santa Clause Rally caps

A Santa Clause Rally strictly defined is the period after Xmas till 2 days into New Year, Historically S&P 500 is up 1.5% in this period since 1960

NB – There is an important distinction between short term traders and long term investors

FEARLESS FORECAST – Again, Up to flat week . Lobbyist for health care & insurance companies have won  Their stocks should lead market higher. Dollar may take a breather before climbing again.

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 & China ). -91 yesterday. Clear mid term bearish trend accelerating. Long term trend since late last year still bullish (see chart) Right now the BDI is in free fall and this is not good for emerging markets & especially China. World trade is decelerating as the dollar rises. Perhaps a new link between the rising dollar and falling BDI is establishing itself.  (see 8/18 explanation  of fundamentals behind falling dollar)

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The Dollar is currently the #1 forecasting tool (now breaking down as a predictor)

$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 +0.26% . Anything close to or over +/- 0.50 is significant. Over 1% HUGE The dollar closed at $78.28 . The dollar is breaking down as a predictor of stock movement. Stocks are moving higher on a stronger dollar. The second day in a row, = Bullish for stocks

Lots of the European countries are having problems with debt that are worse than ours. This makes the dollar a whole lot stronger relative to the Euro and former Russian satellite countries currency. The mid term trend is now bullish and the long term trend (looking at weekly or monthly charts of price) is still bearish

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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 +31,30 This is a bit Overbought Position. We have a ways to go till we reach overbought (+60). This means rally could continue for at least a few more days.

It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 for a month+ =  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 (Updated over weekend)

These are positions I actually own

ETF’s and Trades

SELLING & BUYING

Big Mistake – Back on 12/8 (click on calendar date on top right of blog and scroll down) Investors411 announced to buy IWM & UWM (@2x what the IWM does). For some reason (too busy with other stuff) I never pulled the trigger on this trade. Big Mistake! Both indexes track small cap stocks and the UWM is up 10%+ & IWM 5%+ .

Bottom Line – Waiting for McClellan Oscillator to get close to + or – 60 before making a major move. Traders (not investors) may be able squeeze in a quick trade on the above UWM or IWM if we get a short dip.

Long Term Outlook = CAUTIOUSLY BULLISH

We’re moving -  Downstairs in a two family home – So Investors411 may not go out a few times this week

Guest Editorial by

Sugar Free Bob/Bob Sadinski

Bob is a former artist and who now farms in North Carolina. He is a frequent contributor to the comments section of the blog .

Is it possible that despite our excitement at seeing this historical fight played out before our eyes that this is NOTHING NEW!

Is it possible, ney, is it probable that because Winners Write History, that we have swallowed American Mythology  as History and that this dirty fight we are witnessing is not something really special but,…Just more of the same. Teddy Roosevelt first called for it. Can we imagine the War the corporations waged then was any less vigorous or disingenuous then as now? Or the titanic struggle against Unionism or against the New Deal? We have seen this struggle before,..many times. It’s about time that we viewed it not as partisan politics having a debate over public policy. It is class  against class, funded and led by corporate interests that will stop at nothing to get their way.

Under our legal system,a defendant is innocent until proven guilty. The Defense has to create a window of doubt  about the guilt of the client to avoid a guilty verdict. They don’t have to prove innocence. They only have to create doubt in some of the jurors minds to avoid losing.

Same with the health care fight. The corporate interests are free to lie and distort. They can intimidate discussion of the issues and the corporate interests that own the MSP are free to promote the impression that they are right to be angry. They are promoting doubt about the Obama plan and doubt leads to clinging onto the known rather then take a chance on the unknown. They are being sleazy and on ethical but,they have taken over the media focus and message and appear to be winning.

The question is: Are the corporate interests so Large and in Charge that we can’t beat them?!
Is this new or something we sadly had not learned from our history?!

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0.34%	down
NASDQ	-0.40 %	down
S&P500	-0.33%	down
Russell2000	-0.09%	-

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 and Fundamentals

Volume fell dramatically as US stock’s posted very modest losses.  Volume is the #1 confirmation of a price move and when bulls see stocks fall they want volume to fall with it.

Fed meeting Tuesday & Wednesday this week.

AIG -Up another +5.75% in declining, but still huge volume.   Scroll down to weekly chart here.

Why AIG is so important -  it was the last in the long line domino shadow banks that insured/bet on credit default swaps. They received 10′s of billions from the US government or the taxpayers to keep the company afloat starting almost a year ago.  If AIG had fallen both the insurance and credit industries would have gone over the edge of a cliff in cascading debt obligations. This would have started a economic collapse.

It’s starting to look like we may get all our money back, plus interest. On the surface this would make these bailout programs a financial success for US taxpayers .  AIG stock is now at $28.70

The entire financial sector is up almost 200% since the lows. See chart of XLF here (scroll down to weekly chart) Both the Fed and the Obama administration have continued to insure that the shadow banks remain solvent through TARP bailouts, discounted Fed loans, simply printing money and doing nothing about the factors that caused the problems in the first place.

Simple reality is banks need to loan to make the economy grow. But if we leave shadow banks to regulate themselves inevitably the same lack of oversight will create the same problem. We all seem to have forgotten what happened last September and are moving forward using even less regulations – not even using mark to market accounting rules.

Bottom Line – History repeats itself.

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 . 2975 is the major support level and the BDI closed at 2689 - down last eighth days in a row. 

In a nut shell the BDI is

• short term – Bears rule
  
• mid term -  Bearish pattern
• long term - Bullish pattern

The BDI has formed a series of  lower highs &  lower lows – a bearish chart pattern since early June. BDI fell 135 points Friday and 8 3 on Monday. So, the rate of decline/change is diminishing. Since the BDI chart flows more smoothly than stock prices we could be seeing a turn around because the rate of decline is diminishing. However, clearly still = Bears Rule

Simply put – if the cost to trade is breaking down between countries, so is the amount of goods that flow between countries.  One of the greatest dangers to a worldwide economic recovery is the breakdown of buying and selling goods between countries.

$USD - The dollar rose +0.32% Here’s a multi year chart of the US dollar Dollar up usually = stocks down. That correlation returned yesterday. However, we have established a series of lower lows and lower highs  on the chart pattern and that is bearish . If the dollar could rally above its resistance level (see chart 50 day moving average and an old recent high – both less than +0.50% higher then the rally could have some legs.  This would be in the short term bearish for stocks.

Positions

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

Adding to EWZ (Brazil)

Bought SPX yesterday (@5% of portfolio) (see yesterday’s post)

Would treat any dip in prices as a buying opportunity.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!