“Applauding Death”

The Onion

A quote from The Onion has created a massive controversy.

The words “Jon Huntsman Onion” have 453 references asking about the validity of the quote and article, including the first one from ABC news.

Many thanks to RF who often updates us with the Borowitz Report. The “Huntsman quote” below -

“When I saw the numbers and realized Republicans weren’t embracing my message, I breathed easily for the first time in months…They’re terrifying. We’re talking about people who blame the unemployed for their own predicament and literally applaud the idea of letting those who don’t have health insurance die. What would it say about me if they gravitated toward me personally or approved of my political principles?“

The Reality

In the  America I grew up in you cared about your neighbor, community and country.

Today we sanctify greed.

Instead of shared self sacrifice, that person in the voting both could really “blame the unemployed for their own predicament and literally applaud the idea of letting those who don’t have health insurance die.”

The facts on health care aren’t a parody.

We live in the richest country in the world. A country where the 400 wealthiest people have as much wealth as the poorest 150,000,000 Americans or 80% of households.

The Organization for Co-Operation and Development OEDC is 34 nations banded together to promote just what their title says.

Their 2011 Report based on 2005 data show the USA with  far more expensive health care system and we narrowly edge out one other country for dead last in life expectancy. Just like the previous UN study.

LINK To Charts and editorial

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STOCKS

The Bulls are Back

The Cute white bear cub no longer leads the Stock Section of Investors411.

The short term bearish trend could not hold on

China leads and they are going to be around for a while. While US markets have moved @ +20% off their early Oct. lows China has moved @ +40% [FXI] FXI -ETF for 25 Chinese stocks – is on the verge of a breakout.

Yeah, Europe still matters, but China alone counts for 25% of worldwide growth.

“Wall Street Profits at Record Levels So Why Aren’t Stocks?” CNBC - CNBC sanctifies greed, so another headline might read “Wall Street Profits are Back So Why Isn’t Employment?”

Stocks rallied into the close on some pretty bad Euro/Italy bond data. Rallies in good news put the bulls back in charge – at least for the short term.

Our two forecasting tools remain in NEUTRAL – So there is plenty o room for a move either way.

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

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

Investors & Traders- One way to quickly skim the stock section of Investors411 to see what’s happening is to count the number of Bearish, Neutral & Bullish signals. These are short term trend indicators. If all capitals are used BEARISH or BULLISH put far more emphasis on that forecasting tool. Reading The Tea Leaves will give a daily overview. The Long Term Outlook at the bottom is a forecast of where we will be in 3 to 6 months.

The Good News Message

Two days ago it was the bad news, today its the good news. Overall you have to wonder Why can’t Obama get the good news out?

• Today’s GM IPO (see below)happens and 2 weeks ago it had the best in the auto industry quarterly report. is certainly evidence that the loan by the taxpayers worked. Yes bondholders got a bigger haircut than others involved, but a rebound (think sales in China like other car companies) in such a short time is outstanding.
• Remember we did not fall off an economic a cliff When Obama took office and even the CBO worried about the second Great Depression.
• TARP – “Two years later, the big Wall Street banks have fully repaid the government with interest, and TARP, in the end, could generate a profit”  Problems exist, but big progress has been made.
• Nobody knows – The number of illegal immigrants declined last year by 800,000 (11/15 Time mag. pg.29) last year under Obama
• The $780 billion dollar stimulus plan contained a $288 billion tax cut for working Americans. Who knew? In Sept a poll showed 8% of Americans knew there was a tax cut. (see 10/28 blog post)
• Obama did get some restraints placed on Wall Street – who even knows what they are?
• Heath care reform contains many positives like closing the donut hole in medicare for seniors, additional coverage for young adults at home and much more. Why have the positives not been articulated. Who even knows what they are?
• Health care reform according to the non partisan CBO will save 10′s of billions over a decade & a trillion over 2 decades according to the non partisan CBO (see 10/28 blog) Yet Dems ran away from this legislation.
• Obama entered with a jobless rate per month near -750,000 and this month it increased to +150,000
• Obama,Dems, and a handful of Republicans passes a A $17.5  billion small business jobs bill on 3/18 and $42 billion Small Business Jobs Act bill on 9/27.
• The stock market Benchmark S&P 500) is up from a low of 666 to 1179. Amazing +77% gain off the low – yet Investors seem to hate Obama.

So you tell me why can’t the message get out?

Reading The Tea Leaves -

Do dead Cats Bounce – NO. You can tell I’m a dog person. The chart above shows what a dead cat is – a short small rally in the middle of a longer meltdown, Oversold markets, confronted by major support levels have flattened or rose a bit.  The question is – is this the bottom or the start of a small dead cat bounce?

Three paths in descending order of preference.

• Yes the bottom -TJX (Target) had a great earnings report and outlook. Oversold markets & 50DMA support levels hold. GM IPO energizes markets
• We’re in for an acceptable 5 to 10% consolidation after a nine week bull run with a S&P support level of 1130. (SPX now at 1179)
• A double dip recession is out there and Investors will soon realize the horror as foreclosures rise, Europe falls apart

The problem here is – if you combine choices the more bearish choices #s 2 & 3, are larger than #1.

The GM deal with a potential strong Christmas season and QE2′s print & dump could swing an oversold market.

Positions

• EEM –  position bought at 45.23 yesterday.

Traders. Yesterday we had a better potential for a short term trade. But the same senerio of an oversold buy the dip exists.

Investors. The MO goes below -60 buying becomes an option. Twice in the last 3 years the MO has reached -130. So you could loose out especially if there is a double dip recession. So I started small and nibbled on a little EEM (emerging market ETF) A  position at 45.28 Willing to accept a 7 or 8% loss on this. If we keep going lower I’m going to add some more EEM and country specific ETF’s on dips. (See POSITIONS Section of blog.

I think the chances of a double dip recession are remote, but a flatline US economy coupled with (right now over heated) growing emerging markets is more possible.

I hope the change to from CAUTIOUSLY BULISH to NEUTRAL was premature and this is NOT a dead cat bounce.

Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including ”YOUR Stock List.” -

Paul’s having computer issues and has been off line for a while

Frankly, The American Public got it right. If we don’t fix JOBS and the ECONOMY the rest is NOT going to matter. The Tea Patry’s feeding frenzy over the deficit is almost totally irrelevant now.

What will Obama do? History;

• Caved into generals/military industrial complex over endless wars – Iraq, Afghanistan, War on Terror and probable future wars Iran Pakistan etc.
• Caved in to Insurance companies on Health Care. FYI – Repealing Heath Care law would mean Insurance companies would loose cash cow of @30+ more Americans covered. Hard to see a total repeal.
• Caved into shadow banks over stringent reforms that helped cause global recession.

Think its a safe bet here that Obama will cave in or nicer word compromise (then cave in) to some major industrial sector or their media outlets (Fox news etc) decide.    What should Obama, who has spent the last 10 days outside the country, do ?

• Focus on Jobs, Jobs, Jobs.
• Reincarnate Teddy Roosevelt as listen to him
• Learn to communicate your successes.

Tomorrow – What Obama/Democrats has done and failed to communicate.

All this is bearish but tempered by light volume.

Reading The Tea Leaves – 8 Charging Bears

There are about 8 bearish signals flashing in today’s Investors411 vs. 2 Bullish signals – Light volume show not much panic over 8 charging bears and the MO is almost oversold.

If 8 bears were charging me I’d run and hide behind a support level – In this case the 50 Day Moving Averages for the major stock indexes. Who knows what’s in the minds of the High Frequency Traders. Perhaps faith in QE2 is built into a lot of their algorithms. However, they did NOT even attempt to rescue stocks at the end of the day. Bear # 9

Most significant forecasting ETF to watch

• The dollar (UUP the tracking ETF) - Most likely the significant resistance level will hold,
• Overbought commodities - (USO the tracking stock)

Threw in the towel on long positions after markets started to deteriorate (see above) yesterday.

Investors411 has No long positions at this time. Even our YOUR Stock List is under construction.

Traders. There was no big dip (Dow down 100+ points) to buy on yesterday. I’d be more cautious about going long today. (see 8 charging bears above) Personally I’d use positions like ROM (2x techs) & UWM (2X small caps) to start. TYH (3X techs) l& EDC (3X Emerging Markets) seem too risky right now.

Investors – Lets wait for the MO to close below -60 before even considering buying. Right now it looks like bears are going to run right through -60 and @-130 was the May low for the MO.

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• Your First Stock List made @ +24% from 2/11 to 5/20 vs @ +11% for the S&P 500
• Your Second Stock List made @ +26% from 8/4 to 11/5 vs @ +9% for the S&P 500

Paul & I will be going over the list and coming out with YOUR Stock List #3 by next Monday. We have about 30+ stocks to choose from and the eventual list will be from @ 12 to 15 stocks like the last lists.

Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including ”YOUR Stock List.”

The problem Obama has is twofold – Its a whole hell of a lot easier to sell fear and Americans want it NOW. Long term objective critical thinking and rational debate is a temperament and skill many Americans lack.

Tomorrow – Where Obama has failed

Bulls are getting edgy

Again from previous days – “Not making any specific move until dollar breaks out of its range. I would look at a breakout higher for the dollar, and a corresponding fall in stocks and the MO to oversold as a buying opportunity for long term investors.”

Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including ”YOUR Stock List.”

Trust Buster president Teddy Roosevelt – Will Obama show us the same tonight?

Tea Party

“The tea party’s exaggerated importance” is the headline of the  major independent blog editorial blog Politico’s this AM on the “anti Obama rage group” .

Mea Culpa – I do respect the Tea Party because at Investor411 they have won. By focusing attention on their white (in the words of the old Ivory Snow commercial this group is 99 44/100% white)  rage I have taken it away time from facts on the deficit or Health Care.

The NYT’s lead editorial yesterday was on Massachusetts heath care system “which 1/2 of Scott Brown supporters and 2/3 of all Massachusetts residents like.”(paraphrase) according to a poll. 97% of MA residents are covered. For more see “Reform and Massachusetts.”

BRIC

The Economist has a  has an in depth look at the top emerging markets as a real alternative economic force to the European Union & America.  BRIC = Brazil, Russia, India, China whose leaders are or just finished meeting together in Brazil.  “The Trillion Dollar Club”

The Obama Speech

Tonight’s speech on financial reform is a defining moment. Will Obama be the next Teddy Roosevelt ? (A Republican Trust buster) The short answer is NO. Senate Democrat Ted Kaufman (Dem. DE) is our Teddy Roosevelt – Here’s part 2 of his speech on Wall Street and the Rule of Law

One piece of encouraging news is Senator Blanche Lincoln (Dem  AK) committee has a Republican onboard (Grassly- R IA) for her legislation on derivatives. Lincoln has come up with a stronger bill than other proposals.

NYTs headlines Obama Issues Sharp Call for Reforms on Wall Street If this is true you’ll see a 2 to 5% decline in shadow banks tomorrow. It Teddy Roosevelt or Ted Kaufman gave the speech you’ll see a 5 to 10%+ fall in shadow financials tomorrow.

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

Market went nowhere yesterday in increased above average volume. What Wall Street calls “churning.” Usually considered a reversal of trend = Bearish

Yesterday’s grand slam earnings reports by giants APPL & BAC (thank you taxpayer bailout, Fed 0% loans, & elimination of mark to market accounting) did little to move markets higher. US markets have reacted poorly to great news indicates  = Bearish

Seeking Alpha this AM has a big section on the problems  China has. Here’s one article . Investors411 has closed its entire China position (FXI).

Earnings reports continue to pour in.

Significant Indexes

• McClellan Oscillator rose slightly to -4.91 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. - This is almost right in the middle of NEUTRAL territory
• US Dollar – rose +0.19% 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. The positive earnings reports are overshadowing the dollar which is in the middle of a consolidating range between @$80.00 & @$82.20. Dollar at 81.18. If it moves to either side of that range it will impact stocks.

Positions

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

Both Comments from The Critic & Paul R were incorporated in the strategy section of the blog. You can see them by linking here or at any time in the future going to the top of the blog and clicking on the word STRATEGY

Caution – I do on occasion day trade. None of this is part of Investors411. Almost all of you are looking for something to hold for a period of time.

When to Buy? – McClellan Index - Only 8 times in the last year did this index reach below -60 = oversold = a time to buy. Even then tow of those tomes were within a few days of each other. Therefore the total was only 6 times. The last time was back in early February. Its frustrating not to buy or sell, but Investors411 is going to wait till we are oversold to commit major amounts of capital.

UWM – [ETF that does 2x what small cap stocks do] UMW is back in the black and at a new high although only up a couple %. Almost closed this position. Going to sell at or near open today.

IMAX – imax hit a new high yesterday in a “pop and drop” (see yesterday’s Investors411) At one point in time it was up almost +9% and end the day at +2.94%. Volume was @ 3x normal.  Some entity perhaps more than one broke Imax out to a new high. All the day and swing traders jumped in after the break out. There was some China news,but this turned out to be not as big as its headline.  Then the dropping or profit taking came as IMAX fell up to 8%.

IMAX has had  some other pumps and dumps over the last few months. Investors411 called this pump and dump yesterday. This kind of trade is only for day/swing traders (not investors) who know what they are doing and can handle the risk. Not a recommend trade by Investors411 Yes I bought some Imax to day trade early yesterday and made a 5% profit on this.

Paul R on comments section recommends VCI,, that’s held onto its breakout from a consolidation period yesterday. Volume not strong,but it has possibilities for longer term investors

Monitor Likes SHOO – more a short term trade because it is too far extended from 50DMA (Day Moving Average – If you do not recognize what 50DMA was you should NOT be trading these stocks!)

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Those of you who are on the private email list got the news yesterday that YOUR Stock List was up +23.7% since February 10th. (38 trading days) More below under KISS & Stocks. [If you'd like to be on this email list you can find my email under Home/Editor]

Targeted

was the headline on the major Left of Center Blog the Huffington Post & a front page story in the WaPo this AM. It referred to the threefold increase in threats to congress. This Intimidation and more was covered yesterday.

Bottom Line – The Intimidators or Bullies are winning because instead of having rational discussion of the facts behind health care, our financial system, economics, jobs, forgotten wars – all we have is the “entertainers” from FOX News encouraging intimidation because it makes money.  The left wing justifiably responding. But lost in all this is the facts and our ability to be civil to each other.

The last 2/3 of this video (Chris Matthew’s – MSNBC) deals with some of the facts rather than the shouting & threats that gets over covered on heath care. Investors411 is going to focus on some of the facts next week like the one below from Congresswomen Debbie Wassermann Schultz. (see video)(photo below from CBS)

“No one is going to force you to have health care.” – You will be treated differently on your tax form if you do not have health care – just like married/unmarried people, renters/homeowners, kids/no kids etc.

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

Another up day as volume decreases. Tired of telling you historically volume is the #1 confirmation factor behind a price move and this market is therefore acting irrationally.  However that’s the trend, and the trend is your friend.

Our #2 factor -how markets are reacting to news is bullish. Markets seem to be reacting positively to good news and negative news only slightly halts progress.

Earnings week starts next week and Mondays are usually the best day of the week. So expect some short term traders to get long today to cash in on the Monday trend.

Ed Hoffman (photo above) is one of the better editors at Seeking Alpha – here’s how he sees Friday and the near term future

Significant Indexes

• McClellan Oscillator fell  to -9.81 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. – This is still NEUTRAL territory – technically neither overbought or oversold.
• US Dollar – basically flat  -0.02% yesterday. [Anything over +/- @0.50 is significant.] Dollar closed at $81.54 and the line in the sand resistance level is @ $82.2 Closing above this level and moving higher would be negative for stocks. Mantra -right now The Dollar Rules

Positions

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

+23.7% Profit in 38 days

Before we go over these figures and answer there are 3 important points.

• Caution Don’t let it go to your head. For the most part these stocks were chosen when the US markets were oversold, other reasons, plus we were lucky
• Many many many thanks to Paul R for this data and contributing lots of stocks on the list
• Re-read points 1 & 2

The dumbest thing you could do go out any buy on the stocks on this week’s list.  Your Stock List – you send in the stocks – many are fine stocks, but only some get chosen for technical analysis because I do not have the time to go over a list bigger than 10 to 15 stocks.

Question’s answered.

• No Investors411 is NOT turning into a day or swing traders site. The basic formula of following trends will NOT change. IMAX’s 54.3% gain was the top stock on the list. It following an understandable trend in 3D technology.
• Yes you can copy or find old copies of the list usually each Tuesday (Wed. this week) by using the calendar at the top of the blog.
• Yes you can give a copy to your broker or file them in a circular container.
• I  can’t stress enough to learn something about technical analysis and have a fundamental concept of why your stock will be higher in six months.
• For a list of stocks Paul used to compute this see comments section on the right hand side.

Because your choices are mostly high beta stocks or those that are growing faster than others certain conditions must exist to put the odds more in YOUR favor.

• A bull market
• Oversold conditions – Investors uses the McClellan Oscillator or as Monitor named it the Mickey O. The more oversold the better.
• In general technically the stock has to be dipping, consolidating, or breaking out. (Its not quite this simple)

Our form of  unregulated capitalism has negatively impacted trends.  These trends are reestablishing themselves. The major technical trend now in US stocks is we went too far to the downside and will probably go too far to the upside.  The cloud and cause over all of this is the lack of regulation. This pattern will repeat itself until fixed.

Individual stocks are riskier and what Investors411 will try to do is to cut down on that risk.

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

Dr Larry Brilliant

Historic Heath Care Legislation Passes

Whatever side your on this was HISTORIC. Congressman’s Alan Grayson’s HR 4789 (public option) was far preferable to what passed.  The NYT editorial here. An obvious political win for Democrats. If I were a Democrat congressman I would be sending out to seniors why AARP’s endorsed the bill and explaining what closing the doughnut hole in medicare coverage means. The vast amounts of hyperbole and rhetoric on both sides is obviously exaggerations.

For the shorter term impact on stocks – see Fearless Forecast and Positions sections below

“America’s Real Dream Team”

Some times Tom Friedman hits a grand slam – This editorial is one. Can you guess his “Dream Team” and why despite all the political partisanship they give us hope for the future?

How African Poverty Affects YOU

Because of the poverty in Africa (most scientist attribute a major factor – drought brought on by climate change) Africans have started to eat more meat (from monkey’s to lions) because crops have failed. This over the last few decades has led to 30+ communicable diseases transferred from animals to people and spread world wide. This arguement is often used by Epidemiologist Dr. Larry Brilliant who is the forefront of pandemic research. One of his TED award lectures.

Many of  these horrific diseases have reached our shores. If anyone dares mention how useless the UN is you tell them the impact it has had eliminating communicable diseases that affect billions around the world. (see above link)  Also when someone tell you we should cut aid to Africa or poverty does NOT impact you remember where and how AIDS & Ebola began.

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. (No changes this weekend)

Friday markets were down in significantly higher volume.  Some of this volume is due to quadruple witching/options expiring on Friday and some of this was due to momentum growing for passage of health care.

Over the last 4 months Monday’s have usually been very good for stocks.  However those or you who have followed Investors411 for a long time know sometime technicals rule and sometimes fundamentals. (see Fearless Forecast below)

Fearless Forecast for  Last Week – “up week” – All US major indexes moved higher. We lost about 1/4 to 1/3 of those gains on Friday.

Fearless Forecast for  This Week – “down week” – Health Care reform was dead and Obama/Pelosi brought it back to life. Even though Democrat Senator Chris Dodd has a very weak bill to reform shadow financing and increase transparency, Wall Street will probably be spooked by the passage of health care. Investors will reason that more rules will get put into the financial system by Obama/Pelosi and the financial sector will lead stocks lower. Like health care, financial reform of “greed based capitalism” may return to life.

Short term expect stocks to get hit.

Significant Indexes

• McClellan Oscillator fell again significantly to -1.26 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

Positions

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

Let’s let the dust settle – (see this week’s fearless forecast)  However, outside financial stocks, an oversold buying opportunity should present itself.  Also expect high beta - lots of the stocks on YOUR watch list – to take a hit.

If stocks do not take a hit Monday, on worries over potentially more stringent rules in financial sector, we have one strong bull market and get on the train.

Paul R -(see comments on right side of blog) has mentioned that Health Care stocks have already rallied into this weekends vote. They might “sell the news,” but in the long term heath care stocks like Express Scripts (ESRX will be on YOUR watch list tomorrow) should really benefit from the Obama/Pelosi vote.

Short term traders – ESRX will probably go elliptical over the next two days. Jump in early or buy the dip.

Health Care, Hospitals and Drug stocks should see their stocks soar. They were just handed 32 million new customers.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING