Investors 411 Blog

Class Warfare – Editorial

The most important stat this week (see yesterday) was from Bill Mahr reminding us 1% of the USA had 8% of the wealth in 1980 when Reagan took office. Now that 1% has 23% of the wealth

There is class war fare raging out there as the rich and the uber rich have through excess GREED dramatically altered America’s financial & economic structure. They are toasting the middle and lower classes.  In other countries like China and Brazil wealth is growing among the middle and lower classes. Unless we can fight back and change this dynamic America will continue to fall.

One of the major trends in history is when the majority realize just how badly they’re getting screwed by an oligarchy and they fight back. Sometimes like in the heath care debate after all the shouting tea baggers people start to realize just how expensive health care has become and the wonder why other people abroad are living longer from infants to seniors. Why does  it cost so much less for a better quality of life/health in similar countries abroad?

Bottom Line – Capitalism is the best economic system we have on the planet right now, but it need regulation and if left to itself = people are people and GREED runs wild if we don’t enforce regulations.

Your Comments

Popeye joined D .& Sherwehe on trillions going to fight wars instead to other causes? Check out the comments and join the debate.

Several of you have privately mentioned that I’m too tough on Obama. Sorry I think he deserves it. Others want me to focus more on health care – will do.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0.15%	up
NASDQ	+0.04%	up
S&P500	-0.28%	up
Russell2000	-0.34%	-

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

Fearless forecast on earning season  from yesterday -“Expect other indexes to follow gold & Brazil. ” (Both gold and Brazil have broken out to new highs.)

Intel again hit a top and bottom line home run in their earnings report and forecast. Shadow financial - JP Morgan this AM seems to have also done better than expected. INTC up 5%+ in post market trading and JPM up 3%+ in pre market trading. Revenue for these companies is coming in better than expected. Its a regulatory and interest rate utopia for shadow banks/financials right now.

Perhaps even a bigger positive was the fact that tech giant Cisco bought a major telecom nuts and bolt company and actually went up. Almost always companies go down when they make multi billion dollar purchases. See Cisco buys Starent LINK A huge chunk of what happening is all those phones being sold in growing China market (and elsewhere) that seem to do everything including cleaning the kitchen sink.

CSCO fundamentally seems like a decent buy for those interested in stocks

Sure looks like he rally will get extended. Watch volume. Resistance levels Dow 10,000 could fall today and other major will probably see new yearly highs.

Put on your Rally caps and watch volume – Today should be the day that we know if the money on the sidelines is willing to start to get back into stocks.

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Significant forecasting tools/Indexes for stock markets

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

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

The BDI is @ 40% (I haven’t done the math) off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI nine day rally flattened out yesterday. It fell a -50 points yesterday and closed at 2646 . Even though a reversal seems eminent, we have technically achieved a higher high =  Bullish for stocks & world trade

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$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

The dollar reached a new yearly low (barely) last week and fell -0.45 % The dollar closed at 75.82. We have developed a support level just below $76 . The dollar closed below its support level. = Bullish for stocks

NB – Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.

Last year’s low was around $71, so there is a long way to go before the next major support level.

Positions

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

Our positions in gold GLD and Brazil EWZ are clearly out preforming US markets and our China/smaller S. Korea position. The later two are approaching new highs. Would buy more of GLD & EWZ on dips. On a purely fundamental basis financials should lead any rally and are therefore a decent short term trade

Added XLF (financials) yesterday (10%) of portfolio at 15.15. For traders I’ve also been playing FAS (3x financials) Bought the dip yesterday at 84.00 with a tight stop. Bought small position in MVIS (mentioned many times over last few weeks – recommendation sent in by one of you) – I missed the dip when away, so bought in advance of expected good earning reports.

Big banks and techs continue to be recommended areas. QID is an interesting play (2X NASDQ 100)

When/if the SPX or S&P 500 hits/gets close to resistance area of  1200 – would take some off the table. Long term ETF’s for China, Gold, & Brazil continue to be the best bet to buy on dips.

Right now GLD is the best position to buy on slight dips. – The G7 nations bill themselves as the world’s most powerful economies, but in the end the vast majority are turning out to be the biggest debtor nations – especially the USA. This growing debt is driving Gold fundamentally and technically it has broken out from a two year long resistance level.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 4 1/2 years of beating benchmark S&P 500

"The Family"

THE FAMILY – The Secret Fundamentalist Group at the Heart of American Power - is the title of a New Book by Jeff Sharlet.

This group of Congressmen and Senators has met secretly for decades and has a "C Street House" in DC where some members actually live. They believe that "they were chosen by God not the people for their leadership positions" They are " a Christian Mafia" that are answerable to each other and not the voters. Hillary Clinton has actually praised their leader Doug Coe .

Some high profile events besides Sharlet’ s book (who lived with this group for a year) have blown their cover.

• Philandering Governor Mark Sanford (R. SC) is a member of this group
• Philandering Senator John Esign (R. NV) is a member of the group
• Congressman Zach Wamp (R. TN) has recently partly broken the code of silence

When The Family members talk about accountability, they talk about accountability to this invisible group not to the voters. This is NOT democracy. The Family has existed for decades and was "deeply involved with lots of the death squads in Central Americas."

Rachel Maddow has an expose on the cracking the cover of this secret, mysterious, powerful, christian, fundamentalist cult who have secretly spread their tentacles throughout the world  here (video)

NPR also has interview with Jeff Sharlet here

Jeff Sharlet has his own site here

Your Comments

Check out the comments by Bob Sadinsky & "Confused Investor." on the comments section of blog.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	+3.07%	up
NASDQ	+3.51 %	up
S&P500	+2.96%	up
Russell2000	+3.85%	-

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

Technicals and Fundamentals

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

Markets exploded  higher in increased above average volume. Not quite kick ass volume, but decent volume, especially for the NASDQ. Finally volume confirming Bull’s Rule.

The benchmark S&P 500 broke through a resistance level and finished at 932 . The last resistance level is 956 – this year’s high. The NASDQ also financial broke a resistance level and ended the day at 1862 , The NASDQ high for the year is 1880 . Now reasonable to expect that this year’s high will be challenged – Bullish sign.

Financials/Shadow Banks are probably going to continue their charmed existence, because t he Obama administration & the Fed has deemed the big ones too big to fail and they keep kicking the can down the road on any major fix of the problems that created the economic meltdown. The NYT did an editorial on this (see yesterday’s updates) Yes fixing the problem could have a negative short term impact on financial stocks, but everyone would be better off with a more transparent & ethical banking/financial system in the long run.

All of this rally is probably a false sense of security, because the fundamentals that created the problems have not been fixed. But for now ride the momentum .

After Intel’s fundamentals surprised investors, the next two stocks to look at are Google & IBM. They report after the closing bell. Alcoa (commodities) was the first to surprise, but markets did nothing. Now investors are  expecting a better than average earnings reports from these two tech giants. If we get decent numbers or forecasts (it does not have to be a "grand slam,") the tech rally should get extended.

JP Morgan reported earlier today and did well.  Few expect other banks to have the blowout numbers that Goldman Sachs had.

Significant forecasting tools/Indexes for stock markets

BDI - The Baltic Dry Index measures the flow of goods (world trade) A massive 6+% gain on top of yesterday’s significant 3+% gain. So the prediction on Monday about a bullish turn has come true again.  Price rise here is bullish for stocks across the world. Bulls Rule – gaining momentum.

In a nut shell the BDI is

• short term - Bullish
  
• mid term -  Bearish pattern
• long term - Bullish pattern
  

$USD - The Dollar is on the verge of falling down through in its in its 5+ week long consolidation pattern between $79+ and 81+. Dollar closed at $79.40.

—–

Monday’s Fearless Forecast for week – So expect a rise with some financial stocks reporting early in the week and that rally to get tempered later in the week Intel surprise is a strong fundamentally Bullish factor

Changing Long Term Outlook back to NEUTRAL – Both the BDI (world trade) and technology are green shoots

Our Positions

Personally I’m adding to positions early this AM and/or on any dips. (5% to 10%) addition .

• Added another 2.5% to INF (see positions section at top of blog)
  
• Added 5% to QLD (see positions)
• For those traders (not longer term Investors) who bought recommended FAS made over +11% yesterday. This could go higher,  but no one went broke taking profits. So either set a 5% stop below current price or sell. I took profits at Adding the the close yesterday.

Adding another 5 to 10% today on any dip. Next two positions to be added on small dips.

• EWZ had huge volume behind its rally yesterday
• EWS (Singapore) NEW ETF not previously discussed. This market has outperformed all other major markets. It sits smack dab in the middle of trade routes and has a huge port facility. It is on the verge of breaking out of a multi month consolidation pattern.

If Google & IBM fail to deliver we can temper this move back into stocks.

From Yesterday – Rally ho

Note to Confused Investor (see comments on left hand side of blog) – Will clean up the Positions section this weekend. You’re right. Remember this is just one person writing, editing and publishing this blog.  Please allow for some foot dragging and especially poor grammar.

Note change in Long Term Outlook up ANOTHER level to CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 4 1/2 years of beating benchmark S&P 500

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Financing Health Care

Here’s the "Pelosi" or House Plan costs It has a direct impact on 1.2% of Americans.

• 1% increase on those earning over 280K to 500k
• 1.5% increase on those earning 500k to 1 million
• 5.4% increase on those earnings over 1 million.

The nuts and bolts (lower costs & greater choices) of the plan explained here

Bottom Line – The growing income inequality is one of the major economic problems that has done  seriously harm to this nation.  No matter what you feel about this imperfect plan the Republicans had 8 years and did nothing while health care prices skyrocketed. The Democrats and Obama are moving in the right direction.

Knowing that heath care costs are covered, 10’s of millions of Americans will be more likely to spend money.

Sotomayor Hearings

The Supreme court has become a highly charged political entity. The 5-4 vote for President Bush in 2000 proved this beyond any doubt.

So naturally the Sotomayor hearings are a circus of political correctness. The OWMP (Old White Men’s Party) or Republican’s are further alienating themselves from America’s growing non white community by going  after an eminently qualified Hispanic women jurist. In the NYT Maureen Dowd has a column appropriately  entitled "White Man’s Last Stand" here

Waiting Game

Huffington Post photo

The NYT has an editorial that reflects similar views of Investors411 over these past month. Why is the Obama administration waiting to act on some critical economic factors? See editorial here

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	+0.33%	down
NASDQ	+0.36 %	down
S&P500	+0.53%	down
Russell2000	+0.56%	-

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

Technicals and Fundamentals

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

Markets moved slightly higher after Monday’s big gains in reduced volume. A Bullish confirmation signal

Financials are probably going to continue their charmed existence, because t he Obama administration & the Fed has deemed the big ones too big to fail and they keep kicking the can down the road on any major fix of the problems that created the economic meltdown.

Intel’s earnings report  was a grand slam . Intel is the mother of all chip stocks and chips are the picks and shovels of technology. Therefore, this is a fundamental sign that technology is full of "green shoots," (green shoots is an overused term that of signs the recession is receding) At least technology is one sector of the worldwide economy moving forward.

Significant forecasting tools/Indexes for stock markets

BDI - The Baltic Dry Index measures the flow of goods (world trade) As predicted for the last two days the BDI has turned back and yesterday mover significantly (3+%)  higher. So the prediction on Monday about a bullish turn has come true.  Bulls Rule momentum

In a nut shell the BDI is

• short term - turning bullish
  
• mid term – clear bearish pattern
• long term - bullish pattern
  

$USD - The Dollar is still comfortably in its in its 5+ week long consolidation pattern between $79+ and 81+.

—–

Monday’s Fearless Forecast for week – So expect a rise with some financial stocks reporting early in the week and that rally to get tempered later in the week Intel surprise is a strong fundamentally Bullish factor

Changing Long Term Outlook back to NEUTRAL – Both the BDI (world trade) and technology are green shoots

Our Positions

Intel earnings positively impact four positions

• IFN – India We outsource much of our technology to India.
• QLD – This in its own right (not part of the "the Hedge" trade) becomes a buy the dip trading opportunity again
• FXI – Benefits less directly. But anything that helps the US helps China more.
• The Hedge – This should certainly help the QLD or tech part of this trade.

Personally I’m adding to positions early this AM and/or on any dips. (5% to 10%) addition.

This doesn’t mean that the worldwide recession is out of the woods – there are some long term problems that are no where near solved – but Intel’s news and the BDI turn should really  juice stocks.  The benchmark S&P 500 is at 905 and the next resistance level is 930 then the yearly high of 956. Rally ho

Note change in Long Term Outlook up ANOTHER level to CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 4 1/2 years of beating benchmark S&P 500

Financing Health Care

Poll/chart from Fivethirtyeight

Last week VP Biden announced $155 billion savings in health care with hospitals to help defray the cost of Obama’s heath care plan. This was a giant first step in financing heath care reform. Story here . The $155 billion story was a blip compared to our Michael Jackson/Sarah Palin media obsession.

When has any administration since LBJ come up with $155 billion in health care savings?

Perhaps the best analyzer of polls out there, Nate Silver (fivethirtyeight blog) has come out with a poll showing the way 68% of Americans want to finance health care reform. - Increase taxes on income earners over $250K, Increase alcohol taxes, increase cigarette taxes. See data above and a great analysis of health care reform here

So why isn’t this legislation popular among our Senators and Congressmen? So many are bought and sold by the health care industry.

The latest to get caught in influence peddling was a media outlet the venerable Washington Post. CEO’s and health care officials were among those invited to a sit down with the WaPo and administration officials for $25,000 to $250,000. This meeting blew up when it became public. Story here

If you sit back and do nothing health care costs will continue to rise over 100% a decade.  We will continue be, by far, the most expensive system and 30th to 40th when compared to other nations health care systems on results.

You can either sick your head in the sand, keep getting mesmerized by Michael Jackson/Sarah Palin or do something. Call your Congress person and your Senator. Join a group that promotes reform. I certainly am a critic many of Obama’s decisions, but I’m have no problem in pushing this cause

You can make a difference. But you have to stand and fight . The only way they win is if you do nothin g . Make the call, join the group or donate some $. NOW

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0.45%	down
NASDQ	+0.20 %	down
S&P500	-0.40%	down
Russell2000	+0.36%	-

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

Technicals and Fundamentals

Note - Repeated statements in brown.

After falling, as predicted, to the S&P 875 support level, the bulls have reinforced the barricades and held their position for the last two days.  The longer they hold out the stronger the bulls position becomes.

Volume our #1 forecasting tool has been almost totally useless.

Earnings week usually trumps everything else - Perhaps the biggest report is Intel on Tuesday. If the tech giant ’s forecast is positive we could see a rally continue. Financials are probably going to continue their charmed existence, because the Obama administration has deemed the big ones too big to fail and they keep kicking the can down the road on any major fix of the problems that created the economic meltdown.

Significant forecasting tools/Indexes for stock markets

BDI - The Baltic Dry Index measures the flow of goods (world trade) . BDI fell for the 8th day in a row.  However, the rate of decline has slowed dramatically.  This chart works a little different from most other charts in that it is a lot smoother and less volatile. The fact that the decline rate has dramatically narrowed is a positive for bulls

Unfortunately, over the last six weeks we have a series of lower high, lower lows, and a broken support level. That’s positive for bears. Over the last six months we have dramatically risen off the lows – Long term  Positive for bulls

In a nut shell the BDI is

• short term  - seems to be turning bullish (emphasis on seems )
  
• mid term – clear bearish pattern
• long term - bullish pattern
  

$USD - The Dollar is still in its in its 5+ week long consolidation pattern between $79+ and 81+.

—–

Fearless Forecast for the Wee k

From Last week – The S&P resistance level (@875 & SPX now at 896 )  should at least get challenged, especially in the beginning of the week. Watch BDI. Forecast – Bears Rule Investors411 shot and scored on last week’s forecast.

This Week’s fearless forecast – Remember this is reading tea leaves. So far investors have not reacted well (buying or pushed stocks higher) to some reasonably good news last week. There is a bias with the bears The bulls support level (SPX @875) gets stronger each day it holds.

The bottom line comes down to the mother of all chip stocks Intel’s  earnings forecast . Financials are going to do well (under the Fed’s Obama administration’s protection) The BDI looks like it may be turning higher. Both bulls and bears have some powerful weapons right now as stated above.

So when it come down to "there is no clear direction " you manage risk. If support levels fall for the bulls there is a big chance for a big fall. Good news has not pushed markets higher in the last week, so it looks like there will be no huge rally.

Often the bottom line is "Don’t loose money." – So Investors411 is just going to hold tight. We’ve sold a lot of positions recently and will have to play this day by day. If Intel rallies Investors411 will add to portfolio. Also a buy the dip opportunity may arise.

Fearless Forecast – So expect a rise with some financial stocks reporting early in the week and that rally to get tempered later in the week

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!