Gold

Government Shut Down

The absolute hight of stupidity.

• Issue #1 is jobs, job, jobs. Without jobs there is no one to pay taxes. Those that have no jobs drain the system by needing more welfare or becoming thieves to survive. Stupid
• They are arguing over $30 billion when the debt is $13 trillion. This is like arguing over a crum that fell on the floor instead of the huge loaf of bread that is our debt. Stupid

One Solution – “We have a one-time, 100 percent tax on all wealth (net worth) of all United States residents, with a $10 million per-person exemption. With household wealth at around $60 trillion, that should be plenty to pay off the accumulated debt and shore up Social Security and Medicare for the next century.” and it would fund all those wars that the military industrial complex needs to grow.

Don’t like that idea- another “The Federal Reserve creates $20 trillion in money but, instead of crediting it to large banks’ accounts at the Fed, it credits it to Treasury’s account. Again, no more debt “

Promise that either one would be a one time fix and debt crisis solved. These “convenient concepts” come from the brain of James Kwak at the Baseline Senerio.  For more and is he serious? - here’s the link

Gold and Silver

For the last five years I’ve been the treasurer of a senior center and gold has been our top returning investment.

If you’ve never seen these two bears make a case for something you’re missing a funny and sometimes enlightening video. You may not agree with the doomsday people. I think their case is over the top. But, they do have some valid concepts or flows (moving in that direction)

This is #5 in the series of why by silver. Did you know there are 15 kilograms of silver in each tomahawk missile?

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KISS & Stocks

(Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

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Technicals, Fundamentals & Analysis

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 liquidity stock bubble. See Investors411 STRATEGY section for more

• Yawn – Another low volume rally. Fed liquidity has a muzzle muzzle on the mouths of bears.
• Any bears or black swans who have fought this trend or spoken out against it have been slaughtered by Uncle Ben and the Fed.
• Another $5 billion pumped into economy – Oh and by the way the Fed is now , by far, the biggest holder of US debt
• Fed POMO all comes to an end on June 30th. – Whose going to buy our bonds/debt then? Of course after July 1 happens, the Fed could say OMG lets do QE #3.
• Enjoy the rally while it lasts.
• Big Jobs number on Friday. Means much more for the economy than it does for stocks, Every day foreign consumers are gaining wealth and globalized US companies don’t really care who buys.

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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]   The dollar fell a wee bit -0.17. Bearish longer term pattern still in place, but it started  a four day bull run that’s stalled out over the last three days and could be turning.  For stocks = Bullish/Neutral
• McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] MO rose to +42.25. Over past three months The MO has had problems getting over +30. Any significant rally would put the MO over +60 = Neutral/Bearish

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Reading The Tea Leaves

MO broke its +30 resistance barrier and usually +60  has historically been the level of change – stocks get too overbought. Now is clearly not the time to buy stocks. But to hold or sell.

However the dollar has become the key metric to watch. The dollar is the trump card. It’s bolded below. There’s a good chance the dollar may have hit a short term top and is ready to fall. This would be bullish especially for gold and silver.

What to watch today - Market movers

• USO - ETF for oil - Oil up = stocks down - Now back above $100. - Headlines from Libya not good.
• UUP - (Tracking ETF for dollar) Remember - The dollar is a contrarian indicator. Bad dollar = good stocks
• AAPL – Trading just above its 50 DMA. Very Interesting that this latest rally happened without AAPL’s/technologies leadership. Leading sectors rotated to energy & industrials.
• Japan Rector Developments

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Positions

ETF’s currently Under Consideration.

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.  A risk, but, this area because of limited supply and big demand is going to outperform almost all other sectors. A buy.

DGP – (ETF is 2X gold) also SLV (silver). Breakout on worries of future inflation – Gold is moving inversely to the dollar - I’ve jaw boned this for way too long and waited for the right dip, but missed it.  This is a credible long term asset to have. I’d buy any dip. I do own both in other accounts.

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 -

RJA (Agriculture commodities Index)An ETN, not an ETF.

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 ”YOUR Stock List.”

Demonstration in world’s largest Islamic democracy/country Indonesia where they allow Christian, Buddhist and many other religious faiths to openly pratice. They also have a woman president & a stock market at a new high.

Burn the Koran?

Another  direct follow up to the fear mongering surrounding the Islamic Center in NYC is a pastor in Florida who is going to burn Korans on 9/11 – “It’s International Burn a Koran Day .” General Petraeus from BBC – “This act will endanger US troop.” It will also be  a recruitment mana (gift) from heaven for any Islamic radical that will be broadcast all over the world.

The trend is the growing use of fear mongering on an Islamophobic US public in political seasons. Far right politicians have pushed this issue from Palin to Beck and even some notable Democrats like Harry Reid. Obviously, this trend also benefits those that manufacture weapons

Globalization* & US Education

Why is American education falling or even failing relative to the rest of the world?

Capitalist want to make money. To make that money they needed an increasing educated/smarter workforce to solve problems and deal with technological innovation. Up to, say 1980, that workforce came from US education which major American companies supported.

Now, because of globalization, global American companies no longer have to invest in US education. They simply use use the cheaper educational workforce abroad. “They don’t even have to invest a penny.”

In fact, over the last three decades American capitalists have developed their own think tanks to directly challenge American universities and education system  like American Enterprise Institute and the Heritage Foundation.  For more James Kwak at the the Baseline Senerio

* Globalization is one of the key mega trends dominating the world economically. For more click on OVERVIEW at top of blog

Simply put, an Investors411 mantra and Kwak conclusion – “it is the interests of big corporations that determine government policy in the United States.”

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.”

Its natural for volume to rise after Labor Day weekend.

Housing problem has deeply worried many economists. It’s also become a political football two months before the election.  Back in 2008, Investors411′ mantra was & still is the financial meltdown has caused problems “far, far, far, far, far” worse that predicted.

The NASDQ has “gapped” higher 2 of the last 4 trading days at the open. 3 gap higher almost alway means markets are too overbought to continue the move.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar, of course, fell  a -0.54% Friday.  Threatens to break down through support levels of three week long consolidation pattern. = Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rose +1.45% Friday. A 5 week rally the BDI had flattened out. Now starting to rise again. = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose to +48.06 Friday Momentum obviously with bulls, but we are reaching overbought territory. The MO did spend one day above +9o in late July, but over the last year  the other 4 highs were from + 60 to +80. Therefore running out of room for stocks to move higher = Neutral/Bearish

Reading Tea Leaves

Emerging Markets are on a roll (see POSITIONS Section of blog for corresponding ETF’s) Almost all are relatively outperforming US indexes EWS (Singapore is almost at new yearly high, IFN (India),TUR (Turkey, & EIOD (Indonesia did close at highs. The BDI’s rally is confirmation or a forecast of the positive fundamental growth story of these countries.

US Sock Indexes are being driven higher by a weaker dollar which could break down through its support level today. But we are running out of upside “wiggle room” and almost overbought. There’s only 12 points between current MO at +48 and over bought conditions are +60.

Therefore its time to start thinking about taking profits on long positions in a major rally.  If/when we reach +60 or +80 I will be using the short ETF’s in a rally. (See POSITIONS section at top of blog for more)

Fundamental overview of world Economy.

The obvious sub trend brought about by globalization is the economic deterioration of the US & Europe economically  vs the economic rise of emerging markets and energy rich countries (peak oil mega trend – see Overview section of blog).

Will the emerging markets grow fast enough to pull the USA & Europe out of the Great Recession?

Positions

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

Current positions –  EWS (Singapore)

We are coming closer to the time to take profits or consider short ETF’s

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!