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?

——

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!

Mea Culpa – They changed the Cancer Sexy Bra site on me. Link HERE

Israel & Iran

Let’s forget the Islamophobia that’s enveloped the USA. The fear monger’s couldn’t even tell you that the two largest Islamic nations are democracies or know nothing of the patriotic fireworks and 4th of July parades in Dearborn MI (40% Moslem).

The #1 predictable  foreign policy problem is the fanatic religious zealots in Iran possessing nuclear bomb capability. In June Secretary of War (sic) Gates said this will happen in 1 to 3 years. “To Israel that means 9 months .” [From a must read article in Atlantic]

Yes, the bombing of the nuclear facilities in Iran will create a whole dynamic of new problems, but if I were an Israeli I’d toast the nuclear facilities just like they did in Syria. The questions are when, and what will the US do? For latest odds see Intrade (bid 25.2% ask at 30.0% by 12/31/11 and increasing since last time I looked – click on current events)

• Jews were powerless to stop Hitler & 6 million died, “Never Again.”
• One or two atomic bombs would decimate Israel.
• Iran is the most virulent anti Israel nation on the planet and look what they did to their own freedom loving Moslems after the religious zealots stole the election. Trusting Iran current government is laughable.
• Israel can completely shutdown Iran in Cyber Warfare like they did to Syria when they destroyed its potential nuclear reactor. Russia did this to Georgia in their war. Richard Clarke has a book out on Cyber War. (Thanks to Robert H for info on this)
• Obviously, it would be better if Iran stopped producing more weapons grade material NOW.
• It would be better for Israel if the USA and  the world if we toasted them first. Might not be better for USA.
• Remember in this Iranians are Persian not Arab and they are Shia not Sunni Moslems.

This is Obama’s problem, The Israeli’s are coming. The window on a diplomatic solution is collapsing. I wish this were not so, but its reality.

Bottom Line for Investors – When Iran ’s potential nuclear bomb making sites get hit, stocks are going to fall off a cliff. Oil prices will rise dramatically. (part of the reason Investors411 has started to buy oil commodity ETF’s on dips). GLD on dips is the #2 play.

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.

Stocks held onto/confirmed Thursday’s major move down. Earnings season is behind us and economic news dominates.

Small investors are still leaving the stock market in large numbers ($32.7 billion domestically YTD) and fleeing to safety of bonds. This means that the BB/HFT’s (the uber wealthy) are dominating/manipulating even more.

Most technical analysts are hyping 1070 as THE support level for the benchmark S&P 500. We traded below it  Friday but closed at 1071.69. = Bullish

Significant Indexes

• The Dollar (USD)  [Anything price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar rose +0.74% yesterday.  Almost two week trend higher. Now facing resistance at 50DMA = Bearish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rally +4.22% Friday. 5 week Rally trend is strong = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO fell to -34.69 Starting to approach oversold, but still= Neutral

Reading Tea Leaves

The good news is the BDI (see above) in a strong 5 week rally. Very positive for economies of emerging markets. Also, we did hold onto major support levels on Friday.

The bad news is, even though emerging markets are rapidly catching up, the Big Kahuna is the USA. Stimulus funds/additional Obama tax cuts are running out. Without any additional stimulus to small business its going to get worse economically in USA.

Even more importantly for stocks the dollar is rising despite poor economic news here. The +0.74% rise Friday is too big to ignore. Unless, there’s some sort of reversal early this week Hemet Kitty turns into Danger Will Robinson Danger Danger Translation for first time readers – bad to really bad.

Index to watch is the dollar (ETF – UUP)

Of course if the MO drops down far enough a decent trading opportunity will exist. See YOUR Stock List Below.

*YOUR Stock List*

These stocks are chosen on their technical basis first. They must also have a fundamental growth story that would make investors want to buy in the future. Many are more influenced by major mega trends than others. YOU have sent in these stocks and both Paul R & I have gone over them, weeded out some and added a few. Explanations are purposefully very short and assume you have some knowledge of fundamentals and technicals. Paul will probably have additional information in comments section.  I have tried to make this as simple as possible.

Additional notes

• Ideal conditions to buy would be when the MO is overbought (@=60 or greater).
• Ticker Symbols are linked to charts. DMA = Day Moving Average.
• All stocks chosen must be outperforming major US indexes.
• This is a traders market and NOT safe for buy & hold investors (It’s possible some trades might turn into longer term trades)
• If you buy any stock you need to know when you’re getting out  & how to use stops

BIDU – [Baidu]

• Fundamentals (F) – China’s Google.
• Technicals (T) – Broke out to new high 8/1 and currently fallen to back to breakout point. Not overextended from 50DMA. Has potential.

AAPL – [Apple]

• F – The innovative top dog of American Tech companies
• T – Closer to bottom of 4 monthlong consolidation pattern
• T – More comfortable if AAPL was above its 50 DMA

PCLN – [Priceline]

• F – You’ve seen the Captain Kirk adds. Great earnings report
• T – Breakout gap higher in big volume and still climbing. Too over extended right now from 50DMA.

F – [Ford]

• F – Didn’t take bailout $. Good but #2 to GM in China.
• T – Fallen back recently and is directly at support/50DMA.
• T – Probably will build a base at this level

SAM [Boston Beer Company]

• F  - Great Beer – Barr’s favorite. (Wish I knew what beer Chinese drank because they just surpasses the USA as the world’s overall #1 beer drinking nation)
• T -After major rally run near the bottom in a three month consolidation pattern.
• T – Another stock that would be in a better position to buy if it was above its 50 DMA

GMCR [Green Mountain Coffee]

• F – Great tasting Vermont based Coffee
• 3 month rally to new high in moderate volume and has just pulled back into consolidating pattern. Now somewhat over extended from 50DMA,

HMIN [Hotels Inns & Hotels Management]

• F – China based hotels
• T – 5 month long rally. Near new high. Just a bit over extended from 50 DMA.

SWKS [Skyworks Solutions]

• F – Leading semiconductor company that benefits from trend to high end multi band width mobile phones
• T – Since 2009 in an uptrend. Last 3 months higher highs and higher lows with big volume up days. Dipped and is now moving along its 50 DMA
• Like to see upward some upward movement before buying

RADS [Radiant Systems]

• F – Global provider of innovative tech to hospitality, entertainment and retail industries (China penetration?)
• T – After 4 month consolidation big break out with volume on earnings report. Has dipped & now at new high. Bit overextended right now.
• Paul  will have some interesting posts on this

VCI [Valassis Communications]

• F – Market and media services in America’s & Europe. Think coupons
• T – Had a great 6 month run,but for last three months just marginally better than US Indexes and echoed their performance.
• Too volatile/risky to buy now

UPS [United Parcel Service]

• F – Huge package delivery service with exploding growth in emerging markets.
• T – Not a major mover, but solidly outperforming US Indexes. After move higher looks to be consolidating over last month. A bit overextended from 50DMA

IMAX [Imax Corp]

• F - Innovative 3 D technology & moving into China market.
• T – Big drop from May to July. Reached short term high on 8/1 and since formed lower high and Friday a lower low.
• T – Wait for it to form a base.

UFS [Domtar]

• F – Paper producer /packaging
• T – After rally has formed a three week base. Has potential

Paul will have additional information on many of these. So check out the comments section.

Positions

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

Current positions - EWZ (Brazil) & EWS (Singapore) & USO (commodity-Oil) The later was bought Friday at 32.75.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

See Stocks Below for Hindenburg Omen

Pakistan Disaster

“The magnitude of the problem; the world has never seen such a disaster. It’s much beyond anybody’s imagination,” – Pakistan flood where over 7 million are homeless UN President Ki-Moon.

When Bush/Americans sent Tsunami relief to Indonesia American popularity soared. Today America has far better relationship with the world’s largest Muslim democracy. Indonesia is not without problems, but it’s a whole hell of a lot harder to Islamic Jihadist to recruit where the population is pro American rather than one that hates Americans.

Someone is going to step into the vacuum created by Pakistan’s economic disaster in the world’s second largest Muslim country and  Democracy (@170 million people) Will it be the Islamic Jihadist’s or Americans? Obviously, right wing politicians are absorbed with trying to limit religious freedoms of all Muslims and fear monger political advantage. Its hard to be tollerant when so many on all sides are shouting hatred and fear. Also many of you want the $ to stay at home (unemployment and/or the deficit)

In this case not only will you be helping those in need, but you’ll also make it a whole hell of a lot harder for the lunatic Islamic jihadist to gain support. Here’s a list of places you can donate or simply donate by texting “SWAT” to 50555 to donate $10

Bombing Iran

Intrade puts the odds of the US or Israel bombing Iran at @22% by the end of 2011. Atlantic’s Jeffery Goldberg says odds are much higher (50+%) & In Asian Times Gareth Porter says Goldberg’s wrong.

Investment Bottom Line –  Stocks would obviously take a huge hit on this event.

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. Paul R in the comments section has found a great source describing the BB/HFT traders and consequences of what they do.

Emerging Markets [EEM] turned positive on Friday while US Indexes took a hit in extremely low volume. Emerging markets are once agin outperforming major US indexes and the trades/country ETF’s that Investors411 has used seems to be working again. = Bullish

If you look at the DOW Transports (Friday -0.83) instead of Dow Industrials (-o.16) you’ll find even a gloomy senerio than in last week’s losses. = Bearish

The Hindenburg Omen

Named after the blimp that crashed in 1937, The Hindenburg Omen, is a somewhat accurate predictor technical analysts use to forecast a market crash using the McClellan Oscillator. The WSJ and many other financial outlets picked up on the fact that we had a Hindenburg Omen last week. Here’s the bottom line from the above Wikipedia source. Within the next 40 days the chances of the following happen (using back testing) are -

• a 5% loss = 77%
• panic sellout = 41% & stock crash = 24%
• every NYSE crash since 1985 has been preceded by a Hindenburg Omen

Since we just had Friday the 13th, September is historically the worst month for stocks, you know how susceptible American’s are to fear mongering, I thought I’d let you know what’s in the back of the minds of every technical analyst including those who run the BB/HFT’s.

Significant Indexes

• The Dollar (USD)  [Anything price move over +/- 0.50 is significant] The dollar rose +0.38% Friday. This confirmed Dollar on a week long bull run. For US stocks = Bearish
• The Baltic Dry Index (BDI) [measures cost of world trade/proxie for China & emerging markets] Rally +1.27% Friday. Has broken up through 50 day moving average. But upside momentum slowing shows possible trend reversal. Overall trend still = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO fell to -40.98 Approaching oversold, but still = Neutral

Reading Tea Leaves

No mater what help we get from emerging markets, the dollar is still key to stock prices and  has shown no signs of slowing down. Closest resistance level is about $1.00 away (50DMA). Monday’s recently have been the best day of the week and Chinese markets were up +2.11% overnight.

However, dollar bulls & stock bears rule,  the MO has yet to reach -60, and the BDI rally is slowing down. Bulls seem safely locked in the corral.

Positions

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

Current positions - NONE

NB – The whole Positions Section was updated over the weekend. (see top of blog of link here.) I’ve listed many emerging market and foreign ETF’s with links that are again outperforming US markets. Also, references to ETF’s that do +/- 2 & 3 time US indexes and links to YOUR stock list.

More aggressive traders could start to buy/nibble the dip. Longer term investors may want to wait for stocks to move lower. The MO is at -41 and ideally you’d like to see at least -60 before buying. It has reach @-120 in the past. None of these figures are written in stone.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

-

Financial Reform

From high Frequency trading to opaque credit derivatives our financial system is broken. If we go forward with this over leveraged opaque system it would be like never fixing BP’s gusher in the Gulf. We have the Tea Party members who want virtually no government oversight to the Obama administration who keeps saying, “go softly, go softly.”

Dallas Fed Chair Richard Fisher is another whose is standing for reform.

Turkey/Israel/Gaza = Crisis

Turkey, has called for Israel to join all kinds of international inquiries into what happened. Ranging from a joint US/Israel/Turkey group to one set up by the UN. The Turkish foreign minister said, unless they accept “it shows, they have something to hide.”

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

The Bears Growled Friday. Major meltdown Friday in above average increased volume. (NASDQ volume less of an increase) = Bearish

Fundamentals behind meltdown-

• Less than expected in over hyped (by Obama administration) jobs report
• Hungary announces economic troubles
• The Big News is France“

Troubles in Europe again causing major currency shift – Euro falls and dollar to rises. = Bearish

Market Leader -AAPL - still haing in at 258 = Bullish

Technically – The area around 1040 on SPX (S&P 500) is the line in the sand. SPX now at 1065 – Beyond 1040 the Limbo Line breaks down.

Fearless Forecast Last Week – “Down Week“ Unhappily right

Fearless Forecast This Week - Down Week – See Tea Leaves section below – Basically investors fearful of more problems in Europe will have traders selling into rallies.  Partial success with Gulf spill, Central Banks propping up Euro, Government officials saying things aren’t so bad in Europe could give us an up week. But, traders will probably sell into rallies. Eventually, the Euro, China’s problems & casino capitalism will take its toll.

Significant Indexes

• McClellan Oscillator fell dramatically Friday to -30.48 [+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. Momentum down/Bearish, but in not yet oversold = NEUTRAL
• US Dollar –  The dollar rose a massive +1.20% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Massive breakout to new high is bullish for dollar and for stocks = Bearish

Reading the Tea Leaves All those former communist countries of Eastern Europe who bought into the American capitalist “free market” over leveraged, shadow system starting with Hungary are in economic trouble. France has problems and together the Western and Eastern countries of Europe have a bigger GDP than the USA. More shoes will drop before this gets better.

Its no longer a question of if but when will these shoes drop. This week, next week, next month.

Positions

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

Bought SDS (2x Short S&P 500) at 34.52 Friday. Will sell 1/2 for hopefully 5% profit. Have stop/loss at 34.52. Its contradictory, but willing to buy more in any large stock rally. (S&P rallies, this stock goes down)

Small remaining 1% positions in VCI & ESRX – Also considering selling into rally

Invetors411 main strategy remains wait for the McClellen Oscillator to fall below – 60 before going long.

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

What’s happened to the Change We Can Believe In?

Obama – “I was Wrong”

Obama has admitted he was wrong to trust BP in his mea culpa on the gulf oil disaster. He’s obviously also wrong to trust that shadow banks will act in the interest of the USA. Even Apple or Google (for all their good PR) bottom line is their profits. What we need is a regulator of regulations that prevent greed from running wild. (See Popeye’s comments)

So Obama – Do something and stop dithering. There is a myriad of choices besides correctly blaming BP/Transocean for the disaster.  Solutions from take them into temporary  receivership to adding a tax on gasoline to pay for the clean up. You could create hundreds of thousands of jobs hiring more people to clean up the mess.

Fed Manipulation of Currency

The admission that our Fed is manipulating the currency market is really no surprise. Investors411 has suggested this for weeks. What is a surprise is that the German Finance Minister Rainer Bruederle has openly admitted it.

Bottom Line is Bernanke manipulates currencies. This may be totally unconstitutional. Stabilization of the dollar/Euro relationship is in short term = Bullish

Turkey+Israel+Gaza = Crisis

Israel has boarded Turkish ships 80 miles from the coast in international waters. This was much publicized relief effort for Gaza. 9 protesters died including Turkish citizens. Some ships were taken to Israeli post. Turkey is a member of NATO who has very specific treaty obligations about “acts” committed against its members.  This includes treaty relationships with the USA. Reports “Total Rupture” of Turkey/Israeli relationship possible. Other ships on the way to same area. = Bearish

This situation is developing minute by minute Google “Turkey Israel” for more

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

Markets down in light pre holiday trading and news of lowered Spanish bond rating = Bearish

The admission that our Fed is manipulating the currency market is really no surprise. What is a surprise is that the German Finance Minister has openly admitted it. Stabilization of the dollar/Euro relationship is in short term =  Bullish

Fearless Forecast Last Week = “Down Week” Dow was down, NASDQ was up.

Fearless Forecast This Week – Fed manipulation of currency make a forecast almost impossible. North Korea, BP oil disaster, and now Israel/Turkey/Gaza makes for a lot of negatives = Down Week.

Significant Indexes

• McClellan Oscillator fell to -26.55 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is in NEUTRAL territory, but we are now out of WAY oversold territory. How the MO works.
• US Dollar –  The dollar rose  a significant +0.54% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Currency markets are now being directly manipulated by out Fed and other central banks. This manipulation to keep the Euro from falling = Bullish.

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own

Have NOT had a chance to update last weeks trade.

So far for YOUR stock List OSTK (Overstock.com) BIDU(China’s Google) & SAM (Sam Adams Beer) have all received at least three votes to be new stocks in YOUR stock list.  Last chance to submit  entries. Room for a couple more.

See Paul R’s insightful comments on SNDK and other stocks in comments section of blog.

.

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

The Empire Forever-Photo from Atlantic

Israel’s Knife in Biden’s Back

VP Joe Biden, who many consider the greatest friend of Israel ever had  in the US Senate, has spent about a week in Israel.  He opened with gushing words of support for Israel. The next day Israel announced 1600 new homes in what Palestinians believe is their land. The far right Israeli government put a knife in the American backed peace process and basically said F— Y– to Obama. Laura Rosen from Politico on reaction

Janet Yellin for Fed Vice Chair

The Fed has an enormous influence over YOUR life. Janet Yellin has been leaked as Obama’s choice.  Almost all extremely well qualified choices like Yelin are quickly approved. But times have changed and politics rule. Experience, Intellectual rigor, have become secondary to political views.

Insults in Afghanistan

Iran’s Ahmadinejad (Add 911 was a CIA conspiracy, plus the old holocaust didn’t happen to his list of pronouncements) and Sec. of Defense Gates traded insults while both were in Afghanistan. Both visited so called “President” Karzai. Story link from foreign press.

A BRIC Wall

BRIC = the emerging market giants Brazil, Russia, India and China who many seem to think are taking an opposing view to US policy – On the front burner, see National Interest piece, on blockingsanctions for Iran

Public Option’s Last Try

Bernie Sanders will introduce the public option sooner rather than later

Empire Forever

Robert Kaplan has an outstanding piece in the Atlantic on Afghanistan & the American Empire.

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)

Almost the exact same as yesterday-” Another melt up day in decreased volume.” This is now a mantra. Volume is NOT confirming the move higher.

Again same as yesterday – “As suggested yesterday the XLF (ETF for financial stocks) was one of several possible catalysts for continuing the rally. As the chart shows, its broken out to new highs over the last two days in increased volume. Basically, any meaningful attempt to shadow institutions and bring transparency to related markets is getting crushed. Therefore, it sure looks like the shadow financials  will add fuel to the stock rally.” This move higher is being led by Citigroup which move up &% yesterday and traded an overwhelming billion+ shares again.  This stock, like IMAX,  is going elliptical and expect it to run out of juice today.

The benchmark S&P 500 closed directly on its 18 month high. Obviously, momentum is with the bulls.

3 positions are open on the Fed and Janet Yellen has been leaked as the choice.

Retail numbers [just came in much better than expected = rally ho] and consumer confidence this AM – Both significant fundamentals that can move the market.

As long as mild melt ups continue outlook remains bullish.

Significant Indexes

• McClellan Oscillator fell a bit to +60.06 yesterday. We are still well above +60 or Overbought territory. StockCharts has a better version of the McClellan chart ($NYMO) LINK. Last week the NYMO reached a high of 75.33. It looks like we could get above that. So there is room for a short term trade, but longer term overbought = sell
• 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. After flattening for a few days it is once again moving higher = Bulls rule

Positions

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

From Yesterday “ IMAX – has exploded higher in HUGE volume.  It has “gaped” higher three days in a row.  In short, its going elliptical. That means expect a pull back. IMAX also reports earnings today.” IMAX “gapped” higher at the open again and was up over 7% and ended the day down 1.00% in HUGE  volume.  Best read of tea leaves is IMAX will take another day or two to settle then consolidate of move up. 

Mistake was to not sell some IMAX when stock “gapped” higher.(Up 7%)

From yesterday “Shorter term traders – Even though we are overbought, it sure looks like the McClellan will reach above 80 sooner rather than later. You might want to go long with TYH(3X technology) or FAS (3X what financials do) Buy a dip and keep tight stops.” Bought a 10% (Of portfolio) position in TYH at 151.50. Put stop at that 151.5 and may sell 1/2 for 3 to 5% gain hopefully today. TYH closed at 154.99

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Iran Day 11

Iranian protestors – Photo from Andrw Sullivan blog

Neda Agha-Soltan has become the hero of the Iranian revolution from American media (LA Times here ) to Arab media here In fact al Jazeera has a whole section devoted to "Iran in Crisis" here Al Jazeera is an outlet for mostly Arab Sunni’s and Iran is Persian Shia’s. No love lost between these two groups. You heard and saw Neda’s story at Investors 411 3 days ago.

More of the same in Iran. Less on street demonstrators and more violence. Previously listed best  sources are still telling the story to the world. Some predictions from BBC – What’s next for Iran here

One issue that many on the far left are not going to like to hear. Israe l has certainly made mistakes in its two recent wars with Iran and her proxies (Hamas & Hezbollah). But seeing how the Iran’s "Supreme Leader" treats his own people you can see how hard it is to make some peace with him or his clients. Of course, the first the recognize and lavishly praise Ahmadinejad’s & "Supreme Leader’s" victory was Hamas (here) and Hezbollah (here )

Barack "Hoover" Obama?

Yesterday Abby posted an article by Kevin Baker on Obama from Harper’s magazine. Unfortunately you have to be a subscriber to reference the article. You can view some excerpts here The focus is that Obama has not and may not be able to change the strong intrenched interest that created the economic mess we are now in. President Hoover (his picture above) did nothing and the Great Depression grew.

Context We tore down the regulations on "free" markets and developed a massive credit debt over the last decade that has exploded. Yes, Paulson, Bernanke (more the previous Fed chair Greenspan) and Bush were leaders in creating this mess, but late last year when we stood on the edge of economic catastrophe they (PB & B) instituted a plan and prevented world economies from falling off a cliff. Bernanke, Geithner & Obama have followed through and added to that plan

Remember Lehman Brothers cause over $400+ billion dollars of debt to spread throughout the world when it went bankrupt. People were lined up in panic at insurance companies and banks. What if AIG, CitiBank, Merrill Lynch Fannie, Freddie. AIG and so many others had followed Lehman. The end result would have rippled through out the system and economic catastrophe would have been the result.

How Obama handles the economy is priority #1. Because it is the world’s economy and he is easily the most important/influencial figure. Unlike Hoover whose inaction significantly added to the Great Depression Obama has acted. But its those entrench interests that have dug in. Time will tell.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

-

Technicals & Fundamentals

US markets took a major hit on a bad economic forecast from the World Bank.

The volume was again below average. It hard to be sure about making a forecast when our #1 forecasting tool – volume – gives no indication of which way prices will flow.

Major event – Fed Meets today and issues statement on Wednesday

Yesterday’s major event was The World’s Bank lowered its outlook for the world’s economy this year from -1.7% to -2.9% .  This is some truly bad new s for long term investors.

Since volume is out as a forecasting tool right now, today’s price move will act as a confirmation of yesterday’s move. Do we fall further (bearish) or rebound (bullish)?

Significant forecasting tools/Indexes for stock markets

Note - Repeated statements in brown

Right now, there are two indexes that are significantly influencing stocks in the USA & world. The US dollar in the short term and the BDI in the longer term

$USD -  The dollar is the index to watch. Dollar went up +0.57% yesterday. Any move over 0.50 is significant.  It looks like the dollar may be establishing a short term bullish pattern (see chart)  of higher highs and higher lows. Still to early to tell.

All together now -  our mantra – when the dollar goes up stocks go down . This strong inverse correlation has existed for many moons.

BDI - The Baltic Dry Index measures the flow of goods (world trade). 24 up days in a row, 6 down day in a row,  a 6 day rally and the BDI fell minimally on Friday and significantly yesterday. This is a very important chart that has just rolled over. It usually moves in one direction for an extended period of time.  If it moves past and creates a lower low than it had eight days ago it would be a serious sign of trouble Right now, the momentum is with the bears.

If trade is diminishing through out the world then a worldwide recovery is in big trouble.

You can play with the chart and create different settings to get a better idea of what’s happening, (the same with all other links to different charts)

Reading the Tea Leaves

Still think this market has moved too high to fast and is a technical rebound. As stated two weeks ago we may see a 5 to 10% technical fall or consolidation. This week fearless forecast – Another down to flat week. The benchmark S%P 500 has already broken through support and fallen 6 to 7% from its high to  893. Next significant support level is 875 to 880. As stated above volume is NOT confirming (or has yet to confirm) the downside move. So far this still is a technical correction of a market that went too high too fast.

Both the dollar and the BDI have started to trend in the wrong direction (If you’re a bull on stocks) Add the World’s Bank prediction and you have lots of reason to hear the bear’s growl.

Got burned with this the last time I did this, but buying a little protection on any minor rally. Adding small position in SDS (ETF that does 2X the opposite of the S&P 500)

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

What’s Up - Pakistan  - Are we making the same mistakes? ; Israel/Palastine - an ineviable war and a path not taken; Polls and Avaaza; Markets continue low volume & low volatility. Stocks held onto Monday’s gains; Volume and volatility continue to fall. Bulls with the football

Refugees (Photo LA Times)

Pakistan

Are we going to learn from the mistakes of the past? Right now the Pakistan government is fighting the Taliban in certain areas of Pakistan. This has created a refugee problem of  almost a million people. 

One report shows the same old counter productive results. Each day the Pakistan military announces the # of Taliban killed. Each day in the massive refugee camps full of people fleeing the violence, Taliban allies offer food and help to those whose lives have been shattered. Add to this often unmanned Ameirican planes blast the Taliban and there is significant civilian collateral damage.

There are some signs that things will be different. For now the Pakistani clerics are supporting the government denouncing the Taliban tactics. Also, Hillary Clinton has asked for $110 in humanitarian aid. Perhaps this time the focus will be more on winning over the hearts and minds of the people instead of focusing on body counts. Only time will tell.

Netanyahu  (Photo Google images)

Israel/Palestine

This is a minefield whenever its brought up.  So let’s take Obama’s Notre Dame advice and look for some common ground. A recently conducted poll of Palestinians and Israeli contained the following results.

• 70% of the Palestinians and 65% if the Israeli’s wanted Obama involved in the peace process.
• 59% of the Israeli’s think Obama is trustworthy  vs. 31% think Bibi Netanyahu (Israel’s PM) is trustworthy 

The Bottom Line here is the USA/Obama should get more involved in the peace process. If this situation is allowed to fester another war is inevitable, perhaps within a year.

 Avaaza (Voice) is a multi national group of 3 million members that is trying to get Obama more involved in the peace process. Check  out Avaaza.org. and their add.  Another way, if Avaaza is not your cup of tea, is obviously to directly contact Obama and let him know how you feel.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

-

Technicals & Fundamentals

Markets basically went nowhere and Volume remained light.

In one sense this is bullish – we held onto Monday’s big gains. However, volume has been weak and well below average for the last 4 trading sessions.  Since volume is the chief confirmation factor of a price move, we simply have no confirmation of the price move.

XLF - The ETF that tracks financials (mostly shadow banks ) moved lower yesterday -2.03 in light, but increased volume. The chart (see side of blog) shows light volume for the last 7 days. The XLF has entered a rangebound pattern between 11+ and 13+. Yesterday’s close was 12.04. The downside volume has been greater than the upside volume. This gives a little of the mojo to the bears.  A breakout from this range (@11+ to @13+) will determine the overall markets next move.

Market’s Major Mantra - Again – “If Shadow Banks go up – so will stocks. If Shadow banks go down so will stocks” 

WTIC - Oil prices closed at $60.10. Up +0.86%. Prices had established a range between $54 and $60. We are sitting directly at a major resistance level for oil.  

HIgher oil prices have two sides. Higher prices for oil usually means investors think the economic picture is getting better. Higher oil prices means everyone pays more for gasoline.

BDI - The Baltic Dry Index that measures world trade  broke through resistance last week and is at a new 6 month high. The BDI broke through a major resistance early last week and rose another +1.5% yesterday. Repeat - World trade is critical, because if protectionism/nationalism between countries grows over trade the recovery is doomed. Very Bullish indicator for world economics and stocks

Reading this weeks tea leaves - Our primary forecasting tool – Volume – is not clear, so let’s use our secondary indicators -  

Markets moved higher on good news (India) and the BDI give us a short term bullish bias.  Resistance level of 13.08 on XFL is the breakout area to watch. Any move above this is very positive for bulls. Another important breakout level is 930 on the benchmark S&P 500. Right now the bulls have the football.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING !

Four Bad Bear Markets – Understanding long term bear markets is critical and the following two charts will give you a relative idea what a bear market looks like.  The G 20 – rhetoric and results.  Israel – right wing takes control and spurns Obama/Clinton peace process. Stimulus & Budget. Employment #’s. Why the current rally may continue – “Rotation” and volume.

Click on either chart to see bigger chart. Charts from dshort.com

Four Bad Bears

These charts graphically put in perspective where we are relative to 3 other major bear markets starting with the Dow from 1929 to 1932  The first chart is over 34 months and the second is over 10 years.  The second includes the often never mentioned 9 year long NASDQ bear market.

You can draw you own conclusions, but notice how far we’ve fallen and how close we are to the Dow 1929 to 1932 crash. Each bear market is different, and we are fundamentally moving a lot quicker than they did in 1929 to fix the problem.

G – 20

The rookie, Barak Obama, didn’t hit a home run but he certainly was a hit. He translated his world wide star power into results from refereeing a France/China verbal spat to getting a trillion for emerging markets. You can read the NYT editorial  the G 20 here More came out of G 20 than almost everyone expected. Obama message – “the world is in this together” – resounded.

This AM (EST) Obama is speaking to an packed audience in France and tying the failure of a mortgage in Florida to the failure of a bank in Iceland.

Israel

My closest Israeli friend absolutely hates the newly elected Netanyahu government. It’s like giving American neocons complete control of Israel. Netanyahu has already told the Obama  “Stop Iran or I Will.” 

Netanyahu picked an extremist as his foreign minister – a former Moldovan night club bouncer named Avigdor Lieberman, who like Iran’s Ahmadinejad has made some outrageous threat. He immediately  “spurned” the peace process started by Bush and supported by Obama/Clinton.

Stimulus & Budget

Although many Republican’s voted against Obama’s stimulus plan the last Republican (South Carolina) holdout governor caved in and will accept the stimulus for his state to keep teachers in the schools and cops on the street.

House and Senate have passed basically the Obama budget.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

-

News

-

Nationalization

It’s here. The concept of nationalization has come out of the closet and now even Bernanke and Greenspan are using the term.  Worries over nationalization have caused a meltdown in stocks, but it seems to be better choice than the systemic chaos of bankruptcies or the taxpayers continuing to to be the major shovel throwing money at the problem.

Now the big boys  Bernanke and Greenspan are  using the N word. At Investors411 (see archives) you watched this significant trend develop from a whisper to a market mover that will significantly change our governments response to the financial crisis.

Learning lessons from India

India has been terrorized by multiple terrorist attacks that have originated from inside Pakistan. Yet they have not gone to war with them unlike the Bush administration who went to war with a country that had nothing to do with WMD’s or 911. The significant Muslim population of India has rejected the Mumbai terrorists. For more see Tom Friedman’s editorial – No Way, No How, Not Here.

Helping Mortgage Holders

Finally a plan to keep the rate of foreclosures from growing. All he Paulson TARP plan did was shovel money at banks. Obama has announced a plan to help possibly 9 million threatened homeowners.  The ripple effect of not helping would bring down a lot more financial institutions and further devalue home across America. Many comments on this are like those on the stimulus plan – while significant it is not enough – NYT editorial

Israel Elections

The vast majority of elections analysts see the right wing gaining power in Israel. To most Israeli’s and Americans the war against Hamas had a far better outcome than the war against Hezbollah. Of course there are many worldwide angered by both wars. While the centrists  did barely win the most seats in Israel’s parliament the  divided right wing parties picked up a substantial majority. 

Bottom Line – The peace process has become a whole lot harder

Stanford, Another Madoff

Another this time smaller $8 billion dollar Ponzi scheme has come to light.  Seems investors thought nothing of  investing in 10% to 14% yielding CD’s controlled by the Stanford Group. Mr S is on the lamb.  

Bottom Line - Once again the understaffed, incompetent SEC is caught with its pants down. When all you had under Bush (really since Reagan) was cut cut cut government and don’t you dare dare dare regulate free markets – Stanford/Madoff and an over leveraged financial catastrophy is the result.

Stocks

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Short Term Outlook

Major US markets took a breather yesterday. Foreign markets have rebounded somewhat overnight. CNBC, the most popular financial channel (they are right wing cheer leaders corporations) has a decent morning compilation of how markets are setting up for the day.

Momentum is still with the bears.

Long Term Outlook = Bears Rule

-

See STRATEGY POSITIONS & ARCHIVES sections of blog for more

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!