• “The flip-flopper tag he [Romney] earned four years ago is taking on new resonance”. “Afraid to Lead” FOX News

• Cain’s 12 year old harassment accusation seem minor compared to other political sex scandals.

• Comparison –  OWS has had over 3000 arrests while those calling for democracy in Syria have over 3000 deaths

• Syria responds to Arab League’s proposal to end violence in Syria with threat – “Volcano” of blood if attacked LINK

• OWS Oakland Thousands peacefully demonstrate, marred by no one hurt vandalism/arrests at night. LINK

• Poll 75% of Americans support Obama’s Leaving Iraq withdrawal LINK

• Fed downgrades future GDP and employment numbers. Stocks hold gains. LINK

• God in politics –  Obama on his jobs plan “Even God wants to put Americans back to work.”  LINK

• Split in Greece over referendum NYT

• Private ADP report shows 110,000 jobs added – juices stocks yesterday LINK

• Europe has an unfunded plan that involves a 50% bond haircut and Greek austerity. If December referendum in Greece fails, then a whole bunch of CDS’s (over leveraged gambling) blow up causing EU & US banks big big big trouble. How German Chancellor feels about the Greek referendum shown in her face below.

The Face

Meltdown!?

NYT has always been the #1 source for accurate news, Headline /story on Japan – Japan Says 2nd Reactor May Have Ruptured With Radioactive Release

Kyoto news agency – quoting the defense minister. A helicopter was unable to drop water to cool the No.3 reactor at the Fukushima Daiichi nuclear power plant probably because of the high radiation. This sure looks like a latch ditch effort to avoid some sort of meltdown.

Bahrain/Libya/Saudi Arabia

Three thugocracies dominate these countries. All involves in suppressing democracy.   Saudi Arabia has invaded Bahrain thugocracy to help out its oil rich dictator. In fact the Bahrain invasion has ignited Shia vs Sunni passions in Iraq

Yankee Bob has brought up the concept of  Where’s Obama? Democracy, freedom and justice are on the line.  What concrete action is he taking.?He talks the talk but is he walking the walk?  Where is the knight in shining armor? Is he acting to protect the people or fellow members of the ruling oligarchies?

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

Investors411 record - 6 years of beating benchmark S&P 500

BUBBLE-ICIOUS - Investors411 term for the stock market – We are all riding on the outside of an ever expanding &  Central Bank manipulated stock bubble. See Investors411 STRATEGY section for more

Japan is the trump card – Situation improves  so do stocks. Japan’s stock market closed up 5% overnight. This was due to $325 billion (3 day total) worth of market manipulating liquidity introduce by their Central Bank,

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Shorter Term Forecasting Indexes

• The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Chart for last three weeks still clearly bearish for dollar.    Flat yesterday -o,o2% Bearish longer term pattern. Chart shows dollar directly above a support level. = Neutral.
• McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] MO fell to--68.56. Clearly oversold, but news from Japan trumps everything =Bullish

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Reading The Tea Leaves

Japan reactor developments trump all technical aspects of the market

• Oil prices are falling because the thugocracies (dictators) in Libya and Saudi Arabia reasserting their control over region. - Bullish
• MO at oversold levels – Bullish
• Fed pomo market manipulation still happening – Bullish

If Japan nuclear problem shows improvement you’d see one hell of a snap back rally.

Bottom Line - Investors fear a double dip recession. If things do get worse all it means is more Fed liquidity which should drive stocks higher. Warning – if events get too extreme then this will trump everything.

What to watch today

• USO - ETF for oil - Oil up = stocks down – Now down below $100.
• UUP - (Tracking ETF for dollar) Remember - The dollar is a contrarian indicator. Bad dollar = good stocks
• AAPL -
• Japan Rector Developments

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Positions

NOTHING Long Term UNDER CONSIDERATION AT THIS TIME -Impossible to predict events in Japan.

However, short term, liquidity/manipulated driven rally is overdue. Good for a play with leveraged ETF’s.

UCO -(2x oil prices) Why not, its also a hedge against higher gas prices.

REMX (Rare Earth ETF) - Really believe this a good long term holding.

DGP – (ETF is 2X gold)also SLV (silver).

DBC - (Commodities ETF) For a more complete list of commodity ETF’s see POSITIONS listed at top of blog  DBC is tilted to energy.  A good alternative would be DJP that is more agriculture and metals - Both DBC & DJP are on breakout runs.

RJA (Agriculture commodities Index)An ETN, not an ETF. Hopefully longer term holding. .

UWM (2x small cap stocks) TNA (3X small cap stocks)

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

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The Winter Democracy Bloomed

The desire for self government, jobs and bread has exploded across the Arab world. In over a dozen countries people are demonstrating for basic human rights. Perhaps the biggest looser in all of this is Islamic fundamentalism and al Qaeda, because the cries of the people are not for religious fundamentalism, but for the common human dignity that we all share. Demonstrators are putting their lives on the line for democracy.

Libya and Iraq are the latest to have demonstrations. Today the NYT focuses on American reaction to Egypt, Bahrain and Iran’s demonstrations

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Shadow Banks Rule

The Chamber of Commerce and Shadow Banks were caught with their hands in the cookie jar,  just as a congressional committee was to convene to amend rules on “casino capitalism.”  How ironic it is that over a 1000 bankers were issued jail terms in the Savings and Loans crisis decades ago and NONE have over the 2008 meltdown.  That’s how powerful the shadows and their lobbyists have become.

Andrew Ross Sorkin from NYT story and MIT prof Simon Johnson. – Derivatives Industry Report Collapses.

But that’s just for openers – The Chamber of Commerce & their shadow allies are not beyond investigating the families of critics and printing false accusations. If you support Wikileaks or speak out against The Chamber, BAC or those who want to run capitalism in the shadows this could happen to you. Glenn Greenwald reports.

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 Analysis

Investors411 record - 6 years of beating benchmark S&P 500

Nothing’s change much in overall outlook since Monday. Short term because yesterday’s moderate loss the McClellan Index is at a  more buyable level of  +6.97. But not yet near levels bulls would like. The bubble-icious stock market continues.

So today were going to focus on technical analysis. I call technical analysis looking at the pretty pictures/charts of  a stock’s price and volume and being able to make a forecast of future directions from those charts.

Stockcharts.com, the best free site on technical analysis on the web has a school/tutorial that will help you learn more about it.

Technical analysis works best when the markets, the sector and then the individual stock are in alignment or moving in the same direction.  The sum is greater than the parts, but in most cases it the individual stocks that matters most.

So here’s a list compiled by Paul R who has oodles of experience in technical analysis and uses a powerful HSGI program to augment his technical analysis skills.

Below is Your Stock List #3 and Paul’s recommendations. Most importantly use this a a learning  tool it technical analysis. He published it in the comments section of the blog a day ago, so its a bit dated and I’m sure he wants you to read his mea culpa. You can look up each chart pattern by inserting appropriate ticker symbol at Stockcharts.com. (link above) - His comments in Green and technical analysis below.

“In no way am I recommending a buy or sell of any of these stocks. These comments are for education only. (Understand?)

BIDU – getting extended, a hold and not a buy at the moment.

NFLX – getting extended, a hold and not a buy at the moment.

BEXP – went through a buy the dip correction in late January. Broken out, buy if it dips.

JNPR – leader in it’s group, broken out from a strong base, extended now, buy if it dips.

SKWS - Good chart, extended, buy the future dip.

KSU - Good chart, extended, buy the future dip.

DECK – Gone through a correction as has it’s group, buy the future dip.

PCLN - good chart, buy any dip

COH – Gone through a correction as has it’s group, buy the future dip

IMAX – basing, buy any dip if you want as long as if it’s above the 50.

SOHU – broken out, way too extended for my stomach. Not a good chart, it needs to tighten up.

IVN – basing, buy at any time at current chart position

ALV – basing along with it’s group at the moment. NOT buyable at the moment.

SAM – basing, sitting on the 50, buyable at any time

SPRD – Good chart, wee bit extended, wait until it touches the 17 dma again.

FFIV – NOT buyable at the moment, chart needs some serious work.

These observations are just that, observations. My observations are usually worthless. If you buy any of these dogs…blah blah blah. Did I mention these comments are for education only? Pay attention for crying out loud!”

An additional comment from Paul on how to Buy the Dip

Always watch the comments section for different ideas and comments on stocks, economics, trends and politics.

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Positions

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Look for Paul R‘s always enlightening remarks on stocks and sectors in the comments section of the blog. See ”POSITION“ section of blog (at top of page) for lists of potential stocks & ETF’s including “YOUR Stock List.” (YSL#4 is under construction.)

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From yesterday – “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.”

The Truth & It Hurts

How the rest of World reports a story – WikiLeak’s on Iraq war -

Iraqi Father and Daughter

On Friday at 5:00EST the largest leak of classified military documents ever was realeased on the Iraq war by WikiLeaks. They covered the Iraq war from 2004 to 2009. Here’s WikiLeaks war logs referenced & outline (400,000 classified documents to browse)

This is the major international headline throughout most of the world. Our media (covers only 4% of the world’s 7 billion people) as you might guess is downplaying this document dump with – other data, stories, personal life of Wikileak founder etc..

So, since you get those sources, lets look at what the rest of the world sees and reads

• Al Jazeera –  This is their English/International version.
• Le Monde (in French)
• The Guardian (English)
• Der Spiegel (Germany)

These are 4 of the 5 (The last was the NYT) that were given the documents in advance. You can’t deny what Sec. of State Clinton said in condemnation - “in the most clear terms… the disclosure of any classified information that will put the lives of Americans and others at risk.”

Some rather obvious observations

• The extent of torture, war Crimes, murders, civilian deaths were far greater than originally reported in Iraq.
• Dehumanizing the other side is pretty standard in war, but 96% of the world that’s not American gets to see the Muslim parents and children suffer. Most American’s  don’t.
• The single largest cause of creating  Islamic terrorism since 2003 has been the “unjust” (word of UN secretary General) invasion of Iraq & war on terrorism

American (including me) will go back to our football games, digesting political fabrications, and our lives. But Remember YOU are paying for all this.

The father, brother, son, daughter, relative or friend of those who are murdered, tortured raped and assaulted can and do turn into tomorrow’s terrorist.

How would YOU react if it was your child???

Photos from IrregularTimes.com

Was getting Saddam worth it?

Blood, Sand & Dollars

Obama last night gave a major address on Iraq as we have decreased the number of US troops (private mercenaries?) to 50,000 supposedly “non combat” troops. One can give Obama some point because he brought the troops out faster than McCain would have.  But lets look at the fractured mess of blood, sand & dollars left in Iraq and its impact on the US & the world.

• The fractured coalition of former US support and condemnation by UN for this war has seriously undermined our worldwide credibility
• How many lies, distortions and fabrications told by the US government to its citizens and the world?
• The strengthened positions of Hamas, Hezbollah, Iran, & the Taliban as US occupation acted as a recruiting tool for every terrorist group in the world and kept troops tied to Iraq.
• 75,000 US troops killed or wounded in both combat & non combat rolls. Many more coming home with deep psychological problems.
• Costs on the ground will go over $1 trillion and according to nobel prize winner Joe Stiglets and additional $2 to $4 trillion caring for those returning etc.
• Up to 4 million displaced Iraqi’s. 1.7 million still living abroad. Who really knows over the  projected 100,000 dead Iraqi’s there really are?
• Stalemate in Iraq elections for over six months and majority of officials friendly to Syria or Iran.
• A country in shambles, corruption rampant, and police stations still getting blown up. (level of violence has decreased from two years ago, but still higher than when we first invaded.
• The damage to our constitutional laws and international laws were deeply wounded in this disaster.

The list could go on & on. Nailing a brutal dictator that was an insignificant threat (the Germans’, French, Russians, UN and others realized this) to us was simply not worth the cost.

Israel & Peace

It’s fashionable for some to lay the blame on Israel in the upcoming peace negotiations. They have made mistakes. But how do you make peace with Hamas when on the verge of peace talks they ambush 4 civilians (one pregnant women) and hold a 3000 person joyous rally in celebration of and taking credit for the “heroic “massacre of civilians?

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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!

Technicals, Fundamentals & Analysis

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

Mantra for the month - The Black Box/High Frequency Traders BB/HFT control the majority of trades. Jim Cramer -”BB/HFT make up 80% of trades.”

Sure was a whole lot of volume going on for a flat trading day. In Wall Street technical language they call this “Churning.” More often than not a big battle like yesterday between bulls & bears means a reversal in direction. In this case that would be a rally.

YOUR stock list is now contained in the POSITIONS section of the blog. It’s at the bottom.

Another strategy that some of YOU are using is more conservative and it involves buying stocks with high dividends. Here another list of the top 10 dividend stocks of the Dow. The obvious benefit of these stocks is the second revenue stream from dividends for long term investors. Example CVX offers 3.4% or VZ 6.3%.

The same, but longer term buy/ sell strategy can be used. But when conditions are oversold and the Dow is lower and at a certain date in the future sell when conditions are overbought. Use the MO as a guide.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar rose +0.03%. and closed just above its falling 50DMA. For Stocks = Neutral
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Again rose a marginal +o.04%. After a 5 week rally the BDI has flattened out. Now consolidating. = Neutral
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose  to -32.52.  We’re on the minus side of Zero, but not yet near -60. Therefore = NEUTRAL

Reading Tea Leaves

Sure looks like the calm before the storm – flat markets & neutral forecasting indexes. One anomaly was a massive -3.33% drop in the price of oil yesterday.

Overall think the BB/HFT’s are setting up for a rally. Flat dollar & MO on the negative side of zero. The “churning”  has also been a fairly reliable indicator.

Nation Building in Iran, Afghanistan etc. is a trend that’s is is doing serious economic harm to the UA.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions - Small position in EWS (Singapore)

USO (commodity-Oil) hit the stop I had placed on it. This position is now closed with no gain or loss. Still plan to buy USO & UCO (ETF that is 2X USO) on dips lower.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Iraq

The USA is pulling combat troop out of Iraq by end of August & only 50,000 to remain. “No combat troops will remain.”

So without the bells, whistles, victory celebrations we’re kind of  leaving Iraq. Like Osama Been Forgotten, Iraq Been Forgotten. Here’s what remains.

• The Sunni’s got toasted in the civil war and there are still probably millions of refugees in Jordan, Syria, & Iraq
• There has been NO resolution of an elected government in Iraq for 5 months. Two leading sides each have @ 90 members of a @350 member parliament.
• American’s & Saudi’s back Allawi faction. Iran backs Maliki (current PM) faction.
• Kingmaker seems to be Sadr (actively courted by all) who fought Americans and hid out in Iran. Sadr likes Maliki’s side but hates him because he imprisoned his followers.
• All that oil, everyone own a gun, religious hatred/killings and huge amounts of corruption. Not a good mix.
• July was deadliest month in two years according to Iraq government. But this is still down from 2008 levels.

Reasonable to assume as US withdraws and no or a weak governing majority formed - violence will grow. If the Allawi faction gains power the Iraqi dinar could pop higher.  Obviously great risk here. But where there is great risk there is great gain.

Best place to go for more is Informed Comment blog.(scroll down)

For the US this obviously was an oil war (the peak oil mega trend). It is in the US interest, and that of all the corrupt officials no matter what side they are on, to keep the oil/money flowing. However the hatred is very very deep and religious between Sunni’s & Shia. The other major group – Kurds want the same oil that the Sunni’s claim. This is all very very confusing and I could go on & on.

Bottom Line – Dinar pops on Allawi taking over (most likely winner because Saudi’s & Americans will fix it for him) Then you have a power vacuum with US leaving and all those guns, hatred, and money/oil. Violence already growing and the kingmaker is the most radical Shia religious leader (Sadr) in Iraq. Not a pretty picture.

So if you love great risk buy now on the hope of Allawi forming a government. But I’d sell into Allawi taking power because American’s don’t want to go back.

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!

Technicals, Fundamentals & Analysis

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

Same Mantra for this week -The Black Box/High Frequency Traders BB/HFT control the vast majority of trades.

Last big week for earnings reports.

Significant Indexes-

• McClellan Oscillator (MO) fell  to +42.72 over the last few days [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. A minor price fall ( yesterday’s -38 Dow points) creates a major 24 point move on the MO vs. a major gain (Monday’s +200 Dow points) creating almost the same move higher. When the MO falls 24 points on such a small loss its usually bullish. Again “wiggle room” has opened up for the MO to go higher – High two weeks ago 90 minus 42,.72 = @ 47 points or wiggle room for bulls. NEUTRAL
• US Dollar –  The dollar  fell  -0.43% yesterday [Anything over +/- @0.50 is significant.] The dollar/stocks relationship is strong – Dollar up = stocks down and visa versa. Dollar  is in a two month long fall and is divectly above a major support level.(its 200 Day Moving Average – see chart) The fall for stocks = Bullish
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also, good proxy of China.) BDI was in free fall from a high of @4200 to 1700 . This was a huge -60% drop in 8 weeks is very bearish Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI has staged a two week rally and is up +17% rally and is at 1977 Monday. Yesterday the BDI fell slightly to 1964. We’d have to break support at 1700 to turn really bearish or go back up above 1977 to turn bullish = Neutral

Reading Tea Leaves-

Investors purposefully chooses the three indexes that have perhaps the most significant impact on the market. They all measure different areas. Here’s the BASICS

The McCellan Oscillator -MO BASICS (see above)

• The MO measures if the market is oversold or overbought.
• It does NOT use volume to caluculate this (see above)
• The BB/HFT traders are making day and swing tardes that almost ignor old technical rules like volume as a confirmation of a market move.

The BDI – BASICS (see above)

• Measure costs to ship goods worldwide.
• Transparent figure – Unlike many economic figures – think shadow banks.
• Without exports/inports our globalized economic structure collapses.
• Lower prices = less goods shipped. Higher prices = more goods shipped & good for stocks.

The Dollar – BASICS (see above)

• The BB/HFT pay close attention to what the dollar does.
• Currency markets dwarf stock markets.
• When the dollar falls it means all those companies that export US goods will make more profits and markets will move higher. (& visa versa)

Analysis –

The US Dollar is in a two month free fall. (see below) . Today’s a big day because the dollar’s price is right on its 200 Day Moving Average. It certainly looks like the 200DMA support level is going to fall and therefore stocks will move higher. If you want to track (or invest) in dollar daily see UUP (Dollar Bullish index) This is where the action is.

Bulls are still in charge of mid term trend and we have more “wiggle room.”

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

EWZ is the only long position at this time. Will sell 50% at 5% gain or if it returns to the price it was bought for.

Interested in buying more (ETF’s based on major US indexes) on any further dip. Especially a dip in stock prices as the dollar rises like yesterday.

YOUR Stock List

BIDU, AAPL, SNDK, PCLN , F, CREE (8/10), SAM , GMCR, HMIN (8/10), SWKS, RADS (8/5), SKX, VCI, UFS, IMAX, UPS.

Paul R has posted some information on some of these stocks – see comments section of blog. Will get to in depth analysis next week.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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Bulls & Bears

The case for a rising or falling stock (not economics) market

The Bears

• At best unemployment in the USA has stabilized around 9.5%. The stimulus that has caused the reversal will soon run out and employment will grow.
• Housing prices have at best stabilized. 90+% of mortgages are now in some way backed by the US government  (Fannie & Freddie)
• Not only is the middle class in the USA shrinking, most people are saving more than they used to. Money flows are therefore diminishing.
• The European bank stress test was at a best a PR exercise. US banks are not loaning like they used to. They’d rather make more profit in other areas and are still in after shock from the original crisis.
• European Union with the world’s largest GDP, has many shattered economies (PIIGS &  Eastern Europe) and the others are no better off than the USA.
• The US has an exploding military budget $1,003,000,000,000 ($1.03 trillion) last year. If you count all our military expenditures it is over 60% of the world’s military budget.
• Iraq ‘s March elections created a stalemate with no government. The two leading candidates lavishing praising Hezbollah’s founding ayatollah and meeting/praising  Sadr (anti American ayatollah in self imposed exile in Iran) to beg he joins their side in new government.
• Afghanistan – WikiLeaks has just released 90,000 documents showing “devastating portrait of the failing war.”
• China, the leading emerging market has a housing bubble.
• Stocks are overbought according to the MO (see below)

The Bulls

• The dollar is falling and close to breaking out of chart pattern to downside. Lower dollar = higher US stocks because US goods will cost less overseas.
• Oil prices near breakout to new 3 month highs. Higher oil shows greater consumption = bullish, but not if you’re a consumer.
• Shipping prices have rebounded and are moving higher. See BDI below.
• According to International Energy Agency China surpassed the USA in energy consumption in 2009.
• Most US companies that reported better than expected profits cited emerging markets (China specifically) as where they were growing the fastest and creating jobs.
• China will spend $738 billion over the next decade on clean energy. = growth. The USA can’t get a weak climate or energy bill passed congress.
• Unless you want to invest in some European bonds (example Greece) there is almost nowhere to go besides stocks to get more than a couple % growth for your $.
• Black Box/High Frequency Traders dominate the market and they are ONLY concerned about short term results. They can go long or short.
• Weak banking reform means shadow banks can again get over leveraged.= more profits=higher stock prices till another crash.

I’m sure I missed some. To see the positions Investor’s411 is taking see Positions below and also click on POSITIONS at top of 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!

Technicals, Fundamentals & Analysis

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

Mantra -The Black Box/High Frequency Traders control the vast majority of trades.

The NASDQ volume was slightly above average, but the other major indexes had a typical light volume rally that has become the norm for the Black Box traders that control the markets.

News on the earnings week ahead

Significant Indexes-

• McClellan Oscillator (MO) rose dramatically to +79.48 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. 79.25 = BEARISH
• US Dollar –  The dollar  fell  -0.16% yesterday [Anything over +/- @0.50 is significant.] The dollar/stocks relationship is strong – Dollar up = stocks down and visa versa. The Black Box traders, have used the inverse relationship of the dollar as a key part of their trading system. At bottom of trading range. = Neutral/Bullish
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also, good proxy of China.) BDI was in free fall from a high of @4200 to 1700 . This was a huge -60% drop in 8 weeks is very bearish Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI has staged a 6 day +7% rally and is at 1826 = bullish

Reading Tea Leaves-

The McClellan Oscillator at +79.46 shows stocks as being overbought. I’d be just a little more cautious about using short ETF’s too early because of the strong bullsh sentiment right now among Black Box traders. But, its clearly time to think about using those ETF’s that short major indexes. Click on POSITION at top of blog for more info.

The MO has not been above 80 since the big spring rally in April of 2009 – then it reached @ 105. In early Jan. of 2009 it did reach 120.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Updated over weekends Investors411 holds ONE position in SDS at this time

Strategy – From Thursday - The same as before - If/as US major indexes become more overbought the more ETF’s that sort the market will be purchased. Starting out with SH. Then the higher above 60 the MO goes, the more SDS (200% short the S&P 500) and other even 300% short ETF’s will be used the higher the MO goes.  See POSITIONS section at top of blog for more. Therefore what is happening is a series of trades (Short ETF’s) the more overbought the market becomes.

The same entry/exit strategy applies. Considering dropping exit/entry point to 4 instead of 5%. See Friday’s Investors411 for more. The following trades were made Friday.

• SH (ETF that shorts the S&P 500) was sold for 51.26 – a -2% loss. The other 1/2 of SH was sold earlier for a 3% gain
• SDS (ETF the shorts the S&P 500 at 200%) was bought at 32.50 Nibbled with just a 2% of portfolio position.

Reasoning - The majority of technical analysts seem to be bullish, the BDI has reversed its 8 week fall & the dollar is right at its major support level.Therefore they may be room for 3 week bull rally may continue. We could reach a high above 100 on the MO. However the MO chart has not gone over +80 (where it is now) since April of 2009. Translation – There is some greater risk in this trade than if we had long term bearish outlook. However the more overbought thing get the safer the trade.

Longer term investors may want to wait to see of the MO goes up another 20 points before nibbling. Please recognize that right now this looks like it may only be  a trade  and NOT a long term investment

EWZ (Brazil) an ETF Investors411 owned for years is again outperforming and is a buy the dip opportunity.

GLD – (Gold) has come down off its high and any further dip Investors411 will buy.

The Long Term Outlook has been changed to NEUTRAL from Cautiously Bearish As explained/predicted Friday, the benchmark S&P 500 broke through the first of 4 different resistance levels. Another 3% move higher and the remaining 3 levels will fall.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

The Dynamic Duo – Petraeus & Bush or is that Obama?

The Afghanistan Quicksand

Please tell Tea Party Patriots the three single largest reasons the deficit has grown over the last decade are

• The 2008 meltdown and consequential bailout/stimulus.
• The Bush tax cuts
• The Iraq/Afghanistan war spending and consequences.

General McChrystal yesterday became the fall guy for the failed surge stratagey in Afghanistan. In effect his insubordination was like taking a hit for the military industrial complex. The new chief in Afghanistan is General Petraeus. Petraeus/Bush planned the first troop surge in Afghanistan. Petraeus/Obama surges two and three.  All have failed But American media is dares not state this reality.

Remember when American media was falling all over itself because American caualties were down due to a surge in Iraq? Now that casualties are up with the 3rd Afghan surge you hear almost nothing. Interesting!?

OK Obama looks tougher because McChrystal got canned. Big deal. Has this changed anything? Pehaps - Petraeus and Obama get to dump blame for their failed Afghan policy on McChrystal. The military Industrial complex grows stronger as does the call for more violence (deficit spending) as the solution.

Informed Comment blog by Professor Cole paint a picture of today’s Iraq (where less American’s are dying) as a failed state with @ 4 million refugee’s, a hung government,(elections were last winter) and an ongoing Shia/Sunni civil war killing at least 300 people per month.

Your deficit dollars continued to be poured into both sink holes.

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

Repeat – ” Any analysis of stocks has become an analysis of what the “Black Boxes” of  huge institutions with their high frequency trades & computer algorithms are doing.”

The new homes data for last month was much worse than expected. Worst fall in 4 decades - 33% Everyone expected bad numbers because stimulus was withdrawn, but the news drove the Dow over 100 points near the open. The fact that stocks recovered to slight losses in , of course light volume, is Bullish

Technically the fact that stocks held onto Tuesday’s more significant losses is Bearish

The Fed announcement was nothing new – Interest rates are going to stay between o & o.25% for a long time & Europe has hurt things here.

The dollar started out the day higher and fell. This is what the Black Boxes saw and the reason stocks moved higher throughout the day. Right now, the Black Boxes have focued with lazar like intensity on currency fluctuations.

Significant Indexes

• McClellan Oscillator (MO) fell a smidge to -2.25 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works.NEUTRAL
• US Dollar –  The dollar fell yesterday -0.30% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Dollar up = stocks down and visa versa. The one day the trend = Bullish
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped. BDI is in free fall from @4200 to  2515 yesterday. This is a huge -39% drop in 5+ weeks.  Often a leading indicator for stocks. Now at/just above a major support level. Rate of fall declined again yesterday. This index often makes slow changes, so diminished decline (@40% less) could be the start of a reversal. However, clearly long term  = Bearish

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekend

Have not yet had a chance to Update over last weekend but there are NO positions held at this time

From Yesterday – “DGP is ETF that is double long gold. Investors411 plans to buy the dip in this ETF.”

Big Black Storm Clouds - Every major stock indexes 50 day moving average is heading lower. Right now it would take a pretty massive rally to change that direction. Every “Old School” technical interpretation of this is  Bearish.

However, Currency markets are the dog that’s wagging the stock market tail. If the dollar falls stocks will rise. Black Box traders control what’s happening not “old school” analysis, so for now the long term outlook for US stocks is still NEUTRAL

CAUTION – At some point the Black Boxes are going to stop looking at the economic relativity between Europe and the USA. Unfortunately, when this happens the realization they come to may be the USA is growing weaker too, just not as fast as Europe.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Football lover Karl Marx

Football and Karl Marx

Football is America’s #1 sport. The Superbowl where (economically shattered) New Orleans Saints beat another small market team the powerful Indianapolis Colts, was watched by more viewers here than any other American sporting event.

Football reins supreme because there is parity in the league or socialism. There is a market cap which no team can go over in payment for all combined players, and a draft for new players where the worst teams choose first.  This is a socialist goose that has been laying GOLDEN revenue eggs for the NF. Unlike baseball that’s hurting for revenue and is in decline because of a less balanced revenue program. In Baseball any team outside major media markets has a far less chance at winning. Each stadium gets packed in football, while only a half dozen do in baseball. Karl Marx would clearly be a football fan.

Now owners and players both want to change the system in a rush of unregulated capitalist greed. So if anyone asks you if socialism works in the USA – you say it sure does – its called the National Football League. Socialism Makes Everbody Rich. Why change it?

Elections – Iceland/Iraq

Two major elections took place late last week

• Iceland – Remember Iceland was perhaps the country worst hit in 2008 meltdown because their shadow banks believed in Greed based capitalism. Over 98% of the voters there voted to renegotiate loans of foreign investors who had put their $ in Icelandic banks.  Seems they did not want to pay back billions with their tax dollars.
• Iraq – Over 2 million Iraq refugees voted from Foreign countries. They are too afraid to return. Still the world’s largest refugee crisis. Even with the elections there are many signs that the different religious/ethnic factions have no intentions of compromise. Oh well, neither do the two major parties in the USA.

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)

US equities rallied significantly on Friday. but volume was just a wee bit higher. Long term capital is just NOT flowing into equities in the USA. Unlike the start of the bull market in 2009 when we saw massive amounts of volume. Investors are staying on the sidelines. Volume has been for decades the #1 confirmation factor of a price move. However for the last 6 months its been pretty anemic & useless as a forecasting tool.  Basically this looks technically like we are building a bubble and obviously investors are doubting the rally

The Russell 2000 has already broken out to new highs

Overbought US markets (SPX up 6 days in a row, and up 11 of the last 14 trading days) are all close to new highs. The NASDQ is o.o2 points away from a breakout to a new high.

Last Week’s Fearless Forecast

Investors411 predicted a rally at the week’s start that would get sold into because of an overbought market & the unemployment report – Therefore a “flat week” As stated last Friday - ” The unemployment numbers Friday were as good as it gets for US stocks.” The fact that employment is NOT declining means interest rats will stay low and the Fed will keep flooding the economy with money. From Friday AM -  “Expect a rally.”

Miscalculation about the jobs number (I expected worse than a flat -9.7%) and ignoring looking at the exploding BDI (see below) were the reasons for last week’s miscalculations.

This Weeks Fearless Forecast

The McClellan Oscillator hasn’t been this high (+75.33) since last April. We are also approaching a major resistance level – the January  high of 1150 on the benchmark SPX or S&P 500 (now at 1139).  It seems likely that this level will get challenged.

• Fundamentally it sure looks like the FED has reason NOT to raise interest rates (employment numbers) and that will keep interest rates low – great for stocks.
• The BDI is exploding higher. (see below)
• The Gree debt problem seems to have settled and “will not spread.”
• Any serious attempts at financial regulations seems to be disintegrating.

So fundamentals are moving in one direction against strong technical resistance. Look for a week where at least the NASDQ joins the Russell 2000 and breaks out to a new high, Even though volume is lacking – momentum should make this an up, but volatile week.

Significant Indexes

• McClellan Oscillator jumped significantly to  +75.33 yesterday We are now well above +60 or Overbought territory. StockCharts has a better version of the McClellan chart ($NYMO) LINK. The only other time we saw numbers on the McClellan move higher than this was three times from November to March 2008/2009. The all time high was +121.86 in the last week of last year.
• BDI – The Baltic Dry Index, which measures the cost of world trade (also a good indicator of how China is doing since they are huge exporters/importers) has exploded higher in the last few weeks = Bulls rule
  

Because Investors411 recently changed the Long Term Outlook to Cautiously Bullish - any pullback in the McClellan Oscillator to say +20 would be an opportunity to nibble again.  This market wants to move higher.

Positions

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

Wish Investors411 had more stock positions (only @20% invested in stocks because of overbought technical situation) Will keep selling into any major rally the remainder of the portfolio.  Certainly a breakout over SPX 1150 would be one of those situations.  Right now what to look for is are stocks going to go “elliptical” (continue to move higher at a rapid rate) and blow through last years high.

Would sell more into that rally and buy/nibble more on any drop in McClellan to @ +20.

IMAX – 3D Alice in Wonderland had a HUGE $116 million dollar opening. Avatar’s opening weekend was $55 million.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING