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

NYT’s Frank Rich

-

-

-

Immigration

Once again the NYT’s Frank Rich has topped the list of editorials on the Arizona immigration laws that is causing outrage across the country. If only Arizona Were The Real Problem Some points

• The show me your papers law in Arizona is certainly reminiscent of having those who look Jewish in Germany having to show their papers.
• There has been such outrage over this that Major League baseball is considering pulling its All Star game from Arizona
• Directly after passing this legislation all Arizona Republican’s also voted that an American President must show his birth certificate. (Bithers – directed at Obama)
• Where is the virtually all white Tea Party on this?  They hate big intrusive government. Strangely the hypocrites are silent.
• There are some Republicans like Tom Ridge, Jeb Bush and others fighting back against this.

Combine this with Popeye’s documented comments of the 1,000,000 people now praying for Obama’s death.

Immigration is the next topic that Congress is going to focus on.

Oil Disaster

There have been 22 comments from Friday’s Oil Disaster/Financial Fraud’s post. You can check them all out by clicking on the blue Oil Disaster & Financial Fraud under any (the latest) of the posts and scrolling down on the next screen.

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

Stocks took it on the chin Friday in increased, above average volume. (Volume on the NASDQ was slightly lower) = Bearish

“Sell in May and stay away” is an old Wall Street saying. Will have to do research into validity, but it been said so many times it does spook investors.

The big swings up one day and down the next is usually the indication of reversal of trend.  Therefore, a least a short term top. = Bearish

Would be very concerned if we had a “follow through” day. The day after a big swing in one direction – in this case down- acts as a confirmation factor.

We have come to some resolution on the Greek debt problem – austerity measures in Greece and loans from IMF & European Union. = Bullish

United & Continental airlines have merged. They call it “merger Monday” = Bullish

Hard to see oil spill in Gulf as negative for markets. Thousands and thousands of working rigs and one thing happens to one rig = Bearish

Here’s a summary of what will influence markets this week from Seeking Alpha Big news for the week is monthly employment numbers on Thursday. Some news on China cooling down.

Fearless Forecast Last Week –  ”Up Week” This was wrong we were down.  All fundamental reasons two weeks ago – Greece, GS, Financial Reform seemed to spook investors this week. Paul R sent an email mentioning the chip stocks took it on the chin Friday (down over -4%) on oversupply issues.

Fearless Forecast This Week – Getting the fundamental issues right but the timing wrong. Honestly, have little idea of how employment numbers are going to go Thursday. Best read of the tea leaves is a rebound early as Senate dithers on financial reform, but jobs number holds the key. Best guess is we are due at least for some sort o dip. – down week.

Significant Indexes

• McClellan Oscillator fell dramatically  to -32.05 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is the third time the MO has fallen to the -33 support level. Breaking down through support would mean there is more downside to come.  However support levels do put up resistance to further falls.
• US Dollar – fell -0.22% Friday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important  Dollar closed at $81.83. The breakout of the trading range lasted one day  and the USD has fallen back from its new high into its old trading range. Rising dollar almost always = falling stocks. The dollar is rising and falling because of the fluctuations in European currencies = Greek debt.

Positions

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

Waiting on the MO to reach -60 before any major buy are made.  Looking for a dip to enter GLD again.

Caution – The stocks YOUR Stock list are especially vulnerable to a sharp correction in the market.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING