Jon Stewart

Amerigasm

On Monday night we had the CNN/Tea Party sponsored Republican Debate. “A truly remarkable pairing, as a fringe often derided incopetent bunch of yahoos was granted legitimacy by pairing with the TEA Party.”

How totally incompetent was CNN.? How horribly low and devolved into spectacle has news become? Watch the Jon Stewart video Their debate rivaled The World Wrestling Federation in hype and spectacle.

Our mainstream news media as devolved into a very laughable parody.

Einstein

Relativity

Obama’s Job Program

This week many of you made some excellent comment on Obama’s job program.

• Content credible
• He proposed how to pay for it – again credible with more to come next week on cuts to entire budget.
• It’s political – Obama  intends to run on this.
• Republicans have no plan or ones that include cutting taxes on big business/wealthy, and no specifics on deficit reduction.

Relativity – We have a patient whose dying and Obama’s job plan does offer  the patient  a pint(s) of blood. But the problem is that the wound is open and bleeding.

We have a dysfunctional shadow gambling/financial system that need regulating and regulators. This shadow system is now impacting Europe. Major US companies continue to bleed US jobs overseas.  Until the wound is stitched and closed the prognosis – negative.

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Investors411 Technical Forecasting Tools.

• Investors411 uses the PCR to measure the path of least resistance for HFT dominated stock market. HFT’s love leverage and if there are more puts then calls, there is simply a supply glut on one side that forces a move to the other. See above.

The McClellan Oscillator

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Reading The Tea Leaves

Short Term Outlook

days, week+

• Our forecasting tool are  Bearish/Neutral (see above) - You rather enter oversold markets and exit overbought markets. Advantage to Bears.

• If the PCR was below 0.80, the Bulls would rule. (See Current Positions below for more)

• We do have a technical series of higher highs and higher lows build on major indexes.

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500

See POSITIONS Section of blog for more on YSL#5.(scroll to bottom)

• Tea Leaves – Any @200 point Dow rally should bring the MO to or above +80.  Ideally we like a lower PCR. However, this (a potential +200 point Dow rally today) could be a risk on trade to nibble at - GO SHORT – Use a leveraged ETF like SDS or TZA or sell some long positions.

• Monday was a risk on to go long. It worked.

• If @+200 Dow points today – HTF will have pump this market higher and some technical levels will have fallen (higher highs). Institutions will get excited and buy, then HFT’s will dump it. CAUTION – This is contrarian advice. Most analysts will see  a +200 point move on the Dow as bullish. Longer term it technically is.

• Risk on = For those that can tolerate the risk you have a fair trading opportunity – GOING SHORT in this case -. It could be better, even much better, but the tea leaves put the odds in your favor

• If Investor411 goes short or buys GLD you will see it first in the comments section of the blog.

Positions

NLY - Annaly Capital Mgt. Ultra high dividend stock –a @14% dividend

GLD – (Long Gold ETF) Bought at 167.05 - Sold 1/2 for 8% gain. GLD closed at 174.40. Gold is contrarian to stocks and More willing to buy tan sell right now into a stock rally.

Disclaimer - I buy everything in the hypothetical Investors411 portfolio. If stock is mentioned and I own it you will know.

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Long Term Outlook

(for US stocks only – not our economy)

NEUTRAL*

*Investors411 has 5 different long term valuations - BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, and BEARISH.

* Everything written in BROWN is a repeat from a previous day(s)

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

Why this won’t happen.

• It would lower unemployment and increase Obama’s chances of reelection – Republicans will therefore stall.
• It does NOT help the giant conglomerates who outsource their jobs overseas.
• The Too big to fail and other major US Companies are mega lobbyists who rule almost all Republicans and many Democrats by controlling media and campaign contributions.

You will see congress vote on a tax break for mega overseas corporate profits before you will see them help the engine of growth – small business in the USA.

Much More on The Civil War to come

Small Businesses, Taxpayers Get Shafted

Investors411 Technical Forecasting Tools.

The McClellan Oscillator

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Reading The Tea Leaves

Market momentum is obviously to the downside. Fundamentals matter. In this case its the news coming out of Europe - CNBC & WSJ However both the MO and the PCR are telling us that we are getting ready for at least a short term reversal.

Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500

LONGER TERM POSITIONS

See POSITIONS Section of blog for more on YSL#5.(scroll to bottom)

Traders - If we get another strong move down today I would consider going long in a leveraged index ETF.  Technically, because we are so oversold and approaching support, any dip down close to support should hold.  It’s a risk, and you could get overwhelmed by some bank failure in Europe. However, if we get that MO to -60 and below we should get at least a technical bounce.

Investors - It’s sure better to nibble when the stock market is 20% down than when it was higher.  The Caution, of course is the breakdown through support for the major indexes. My best read of Tea Leaves is that it would take a major bank meltdown for this to happen. FT Link on this possibility.  A downgrade is NOT a meltdown, but there is risk.

Greece is going to default at some time and in some way. They have an interest rate near 50% on their 2 year gov’t bond. We have an under 2%interest rate. That 50% rate is unsustainable for Greece. The problem is derivatives taken on the debt and the shadow financial system, like Lehman and so many others, make this crisis worse. Many want this to happen sooner rather than later so we can stop twisting in the wind.

Bottom Line – If we have another meltdown today, technicals will show an overbought market. If we get to OMG oversold levels the technical Tea Leaves put the odds even more in YOUR favor to Buy.

Paul has said this is not a market to be in. He’s right unless you are protected (Puts or ETF’s that short the market) But, when everyone else has panicked there is no one left to sell. It’s hard to call a bottom exactly, but the Investors411 portfolio will nibble and risk a long position in a leveraged ETF if oversold and better OMG oversold conditions exist.

Positions

NLY - Annaly Capital Mgt. Ultra high dividend stock –a 14% dividend

GLD – (Long Gold ETF) Bought at 167.05 last week - Sold 1/2 for 180.4 (see comments section of blog on Friday) Almost +8% profit.

From yesterday - There are simply too many calls out there on GLD. Ripe for a bear raid by HFT’s. Investors411 also likes to take a 5 to 10% profit and let the rest ride. Last reason – Gold should have gone way up as stocks went way down.

There is a major political battle going on over gold. Sides

• The US government and most companies/banks want the US dollar to be the “fiat” currency of the world.  If everything is traded to the dollar standard is gives us a major advantage.  We can conduct our monetary policy independent of exchange fluctuations.

• The other side is China (plus other countries) and the Tea Party/Ron Paul who want gold to be the standard for the world.

Xinhua, China’s official news agency - “International supervision over the issue of U.S. dollars should be introduced and a new, stable, and secured global reserve currency may also be an option to avert a catastrophe caused by any single country.”

There are some major government/Fed/Commodity Exchange manipulators of gold prices. Often when gold declines in the USA you will see it bounce back in Asia overnight. This is probably due to Chinese intervention.

Disclaimer - Personally I own  a group of dividend stocks including NLY, SNH, KMP, MO, HTD, ABV & AGNC and a few other smaller positions I have puts half of dividend stocks I own. I also use leveraged ETF’s TZA & SDS to minimize downside risk or make a profit. I buy everything in the hypothetical Investors411 portfolio. I will be purchasing additional YSL #5 stocks when we have a lower MO.*

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Long Term Outlook

(for US stocks only – not our economy)

NEUTRAL*

*Investors411 has 5 different long term valuations - BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, and BEARISH.

* Everything written in BROWN is a repeat from a previous day(s)

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

More people working = more tax revenues = lower deficits.

You have to spend money to make money

This should have been Obama focus in his 2010 state of the Union – Not the deficit and government reduction. My only concern is too little and too late.

Investors411 Technical Forecasting Tools.

The McClellan Oscillator

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Reading The Tea Leaves

Our forecasting tools give no advantage to bulls or bears. There is some slight momentum with bulls because of the double bottom and series of higher  highs. NEUTRAL is the key word. Perhaps the calm before the storm. DAX – German stock market (already in bear market territory) down over 1% at 7:30 EST. – Bearish

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by JS

CALLS

.

.

Buying calls are a way of taking more upside risk while limiting your downside.

SDS is a contrarian ETF that goes up 2x when the S&P goes down. It’s a decent stock to buy during this “fear” market, as protection.

The price this week was $24.56. To buy 100 shares costs $2456 + comm.

Buying this option:

-SDS111022C25 ( Oct 22,2011 @$25 ) costs $2.10 per share = $210 + com per contract. Your downside is $210.  This option is a bet that the S&P will go down dramatically by Oct 22.  SDS at the market bottom of last year July 2010, SDS was $38; at bottom of market in ’08, SDS reached $120.

Projected profit if S&P reaches these lows again:

You will start making a profit on this call if the S&P falls 4.5%. If it doesn’t fall 4.5% from the current price by Oct. 22, you will lose your

investment.

$38 – $25 (the strike price) = $13 – cost of call option  $2.10 + comm = @$11 per share or $1,100 profit per contract.

If SDS reaches highs of 2008, $120, you’ll profit $120-25 (strike price) = 95- 2.10 (cost of option) = 92.99 per share x 100 sh =  $9,299 per contract.

So on $210 bet,  one can profit $1100, up to $9299  if market reaches the recent past lows.  I use these options  as a hedge against stock I’m holding, as insurance. My loss is limited to the $210, my “insurance” premium. Let’s me sleep at night.

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500

LONGER TERM POSITIONS

See POSITIONS Section of blog for more on YSL#5.(scroll to bottom)

Until the Fed makes a commitment to more liquidity, its hard to add any unprotected long term position other than buying GLD on dip.

Strategy Outlined – A rough outline – The basic strategy is to buy the dip. Most crucial to this is our MO chart. Start buying when the MO dips to @-60 and add to positions if the MO goes lower. If the MO reaches +60 you either sell if still holding a position or short stocks (use puts or ETF’s that short stocks) This situation (@+/- 60) has occurred a bit less than once a month over last two years

Depending on what you invest in and if your an investor or trader you hold or sell. Examples –

• Shorter term traders – Sell 1/2 after 5 to 10% gain and can let the rest ride and become a longer term investment or until the MO approaches +60
• Shorter term traders – YSL#5 – Is more suitable for your investment style
• Shorter term Investors – Should use Puts and calls to leverage risk. Also a “protection” option for longer term investors in bad markets.
• Longer term Investors – Should only invest if the long term outlook is NEUTRAL. Your chances of success are better with a CAUTIOUSLY BULLISH outlook.
• Longer Term Investors – More likely to use Dividend stocks/ETF, but can use YSL’s.

Investors411 has just started using the PCR as an investment tool and will advise on how it mixes with the MO.

• For now extremes in the PCR (+1.50 & – 0.60) are sell and buy point.
• Remember how these charts (MO & PCR) mix and the Long Term Outlook is NOT and exact science, but Reading Tea Leaves.
• If you backtest results over the last two years you will find this a very successful method. But markets change and to will strategy.

NLY - Annaly Capital Mgt. Ultra high dividend stock –a 14% dividend

I still have a Put position to protect NLY. (strike price $17.00 for 3rd Friday in Sept) Also puts on other dividend stocks.

GLD – (Long Gold ETF)  Bought at 167.05 last week – a half position. GLD closed yesterday at 181.81. (I owe readers a column on this – hopefully Monday)  There are simply too many calls out there on GLD. Ripe for a bear raid by HFT’s. On other side – I believe it is likely that China is secretly buying tons of gold. If you have big position here I might take some profits.

Disclaimer - Personally I own  a group of dividend stocks including NLY, SNH, KMP, MO, HTD, ABV & AGNC and a few other smaller positions I have puts on over half of dividend stocks I own. I also use leveraged ETF’s TZA & SDS to minimize downside risk I buy everything in the hypothetical Investors411 portfolio. I will be purchasing additional YSL #5 stocks when we have a lower MO.*

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Long Term Outlook

(for US stocks only – not our economy)

*The most important foreseeable fundamental factor in determining the log term stock outlook is what The Fed (Bernanke) does to impact money supply (example – a new QE#3)

NEUTRAL*

*Investors411 has 5 different long term valuations - BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, and BEARISH.

* Everything written in BROWN is a repeat from a previous day(s)

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

• Reality - If you are a short term trader, you are going to have to come to terms with understanding what HFT’s do (see last weeks blog posts for a start) The wild volume swing are HFT’s feeding grounds. BIG low volume price moves are now the rule rather than the exception. As long as HFT’s dominate there is going to be many more wild, over exaggerated volume swings because that’s how they make $$$

Investors411 Technical Forecasting Tools.

The McClellan Oscillator

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Reading The Tea Leaves

From last Thursday - Short term nod to bears, but bulls still in charge of longer term technical trend. it looks like so many HFT’s/pros/programed traders are going short (buying puts at an ultra high 1.44% ratio to calls on the P/CR) that we are running out of put buyers.

Therefore, today’s early meltdown should see a bottom if the number of puts grow. (Short term traders can watch the put/call levels daily, through your broker or trading platform. Simply watch a major US indexes number of puts and calls.  If the puts numbers increase dramatically we should see at least a short term bottom) So strong chance of  at least a short term rebound late today/tomorrow.  This would be a technical adjustment.

Fundamentals rule and if Europe is melting down then everyone suffers. German market is key to watch. Down 5% yesterday, but up +0.71 at 7:30 EST.

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Paul’s Corner

A yo-yo market it is and tough to hold ANY stock!  Bloodshed in Europe markets Monday adds to the dangers of this market.  My good friend Ian Woodward has given us several great blog posts these past few days, here is his latest and what to watch for this coming week.

Link

Ian starts this latest blog with the snakes and ladder  chart and let me warn you when he comes up this chart it’s his stern warning not to play in this market!

I only read a few blogs and one of my favorites is by Dave Steckler, he specializes in ETF’s. Dave is hosting a HGSI webinar Wednesday evening Sept 7 and should be very interesting.

Dave Steckler, author of the investing blog, www.etfroundup.com, and long time HGSI user, will lever the new ETF component capability of HGS Investor Version 8 in his presentation, “Creating Composite Indexes with ETFs.”  Dave will introduce the various indexes he has created, demonstrate how he created them and how he trades with them.  The webinar will also describe how Dave created the charts he uses, which incorporate Bollinger Bands and the Tsunami Indicator. Time will be alloted for Q&A.

Dave is a former member and past president of the American Association of Professional Technical Analysts (AAPTA) and a former member of the Market Technicians Association (MTA).

Registration Link

Not a great time to post watch lists, but here is  my current  list. Most were selected from chart action, basic fundamentals and technicals. A few are there cause I like the company. Note just because a company is on this list doesn’t mean it’s worth buying.

AKRX,ARMH,AZO,AXTI,BGS,BRFS,BIP,COG,CATM,CPHD,CF,CMG,KO,CROX,CVV,RJA,EOG,GMCR,GPOR,JAZZ,KCI,LXU,LULU,MOO,

MJN,MPEL,MRGE,NLC,NFLX,PSMT,RNOW,RES,SPRD,TSCO,ZAGG

Disclaimer: I trust you are all safely in cash and NOT fooling around in this market!

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500

LONGER TERM POSITIONS

See POSITIONS Section of blog for more on YSL#5.(scroll to bottom)

Until the Fed makes a commitment to more liquidity, its hard to add any unprotected log position other than buying GLD on dip.

NLY - Annaly Capital Mgt. Ultra high dividend stock –a 14% dividend

I still have a Put position to protect NLY. (strike price $17.00 for 3rd Friday in Sept) Also puts on other dividend stocks.

GLD – (Long Gold ETF)  Bought at 167.05 last week – a half position. GLD closed yesterday at 183.24% Stop/loss on GLD at 168. @+9%

Disclaimer - Personally I own  a group of dividend stocks including NLY, SNH, KMP, MO, HTD, ABV & AGNC and a few other smaller positions I have puts on over half of dividend stocks I own. I also own TZA & SDS (3x & 2X short ETF’s) I buy everything in the hypothetical Investors411 portfolio. I will be purchasing additional YSL #5 stocks when we have a lower MO.

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Long Term Outlook

(for US stocks)

The most important  foreseeable fundamental factor in determining the log term outlook is what The Fed (Bernanke) does to impact money supply (example – a new QE#3)

NEUTRAL*

*Investors411 has 5 different long term valuations - BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, and BEARISH.

* Everything written in BROWN is a repeat from a previous day

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

Compromise

American’s say they want compromise and legislators working together.

In fact 23 separate polls say the deficit should be reduced by raising taxes (this figure ranges from 76% to 59% vs 40% to 19% who say only spending cuts)

Yet we learned that greed and fear based Murdoch style journalism sells. Ideologues hate compromise and, as many of you are aware, almost all Republicans have made a pledge NEVER to compromise on taxes even for the wealthy. The path of No compromise.

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Historically,  countries have chosen the path of growing as their primary way out of recession. The Tea Party dominated congress has forced considerations of immediate cuts on a weak economy that will constrict spending.

We’ve come from loosing -720,000 a month to gaining +117,000 a month. Moving in the right direction, but still way too fragile a recovery to withstand the impact of a constricted economy. A few of many examples of making cuts sooner rather than later.

• You constrict the economy = less jobs. One major reason for the recent growing deficit is so many people out of jobs, or in under paid jobs paying almost no taxes.
• Cutting education and teachers – High tech is the future of jobs, slash them and there are fewer good paying jobs for Americans and deficits grows because fewer have decent jobs.
• Raise social security eligibility age. If you raise the age for ss people will work longer and young workers will not find jobs.

By not focusing on the clear and present danger – jobs and our economy - we have done significant damage to our hopes for the future. We’ve again chosen the wrong path.

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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

Shorter Term Outlook.

day/days/week

• Outflows from mutual funds (see below) also indicate a climax sell off. However, everything gets exaggerated because over 60% of all trading is done by High Frequency Traders. I would imagine even more than the 60+ is now being done by HFT’s because of the huge volatility. New HFT’s rule – Technical aspects may be secondary to headline driven markets

• CAUTION – Even more mom and pop investors have left the markets in the latest meltdown. High Frequency Traders rule even more than before. This is what is creating the massive interday volatility (especially in options). Don’t be fooled into thinking these are normal investors getting back into the markets – its HFT’s taking a an ever bigger and bigger share of US equity trading. $16.94 billion in outflows from mutual funds last week almost equaled the record held by the week directly after the HFT induced “flash crash”

• The McClellan Oscillator (MO) fell to -87.80 (-30 somewhat oversold, -60 oversold, -90 OMG oversold). Were at almost OMG oversold levels.-88 is not as bullish as the -142 a couple days back.  But, technical outlook = Bullish

• Reading The Tea Leaves - Stocks are moving on headlines and that move is exaggerates by all the HFT trading. The macro headlines are worries over Europe’s banking system and a downgrade of France’s AAA credit rating.

From yesterday Bottom Line… More often than not lows are retested before a rally.

Bottom Line - Lows were certainly retested yesterday.

So the stage is technically set for some kind of oversold rally. However, fear dominates right now and fear is driven by headlines. (Example – S&P downgrades France from AAA credit or bond yields in Italy/Spain rocket higher again.) Sorry I’m just not fast enough on a short term basis to predict headlines and how markets will react. HFT’s do this in microseconds.

Longer Term Outlook

weeks, month, months

• Repeat - May 20th forecast still stands. The recent Washington debt crisis debacle has focused everyone on cutting the money supply.  Simple math – The less money that’s out there = less jobs = greater chance the “Great Recession” returns. European debt and emerging market’s inflation fears add to this.

• Long Term Outlook Listed Below. Some major Long (monthly charts that go back over a decade)term trend lines have been broken (will go into this tomorrow) = Bearish

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Paul’s Corner

I’ve mentioned HGSI quite a few times as the software I use to research and evaluate stocks. It’s  a powerful and easy to use program.  HGSI usually features a webinar every month demonstrating the program and giving trading tips.  Their next webinar is as follows:

Join HGSI Power User Ray Ebert on on Tuesday August 16th from 8:00 pm to 9:15 pm EDT.  Ray will present  ” Prospecting and Trading Within a Weekly Timeframe.”

Ray has been using HGSI since 2009 and earlier this year was selected to be a “Spiker,” an elite-level member of SpikeTrade, a trading community managed by Dr. Alexander Elder and Kerry Lovvorn.  In his first quarter as a Spiker, Ray distinguished himself by winning first place for equity and 2nd place for points in the weekly trading competitions.

For traders/investors who are challenged with finding the time to trade regularly or who want to incorporate more structure into their trading routine, Ray’s presentation should be of great benefit.  He will share his disciplined weekly trading methodology using HGSI and other software.  He will also give examples of how he manages his trades and provide technical analysis of stocks submitted by the audience.

Registration   www2.gotomeeting.com/register/382039138

I encourage you to join in for some good trading tips!

So on another 500 pt drop yesterday, where did the money go? My favorite top 100 high demand search shows gold stocks  led the way with 25%, Oil & Gas Transporation 7%, Prec. Metals 7%,

Gold (25.00%, 25 securities)

• Agnico-Eagle Mines (AEM)
• Allied Nevada Gold Corp (ANV)
• AngloGold Ashanti Limited (AU)
• Aurizon Mines  Ltd. (AZK)
• Barrick Gold Corporation (ABX)
• Buenaventura Mining Company (BVN)
• Coeur D’Alene Mines Corporat (CDE)
• Eldorado Gold Corp (EGO)
• Gold Fields Limited (GFI)
• Gold Resource Corp (GORO)
• Goldcorp  Inc. (GG)
• Harmony Gold Mining Co.  Ltd (HMY)
• IAMGold Corporation (IAG)
• International Tower Hill Min (THM)
• Jaguar Mining  Inc. (JAG)
• Kinross Gold Corporation (KGC)
• Minefinders  Ltd. (MFN)
• Nevsun Resources  Ltd. (NSU)
• New Gold  Inc. (NGD)
• Newmont Mining Corporation (NEM)
• Novagold Resources  Inc. (NG)
• Randgold Resources  Ltd. (GOLD)
• Richmont Mines  Inc. (RIC)
• Royal Gold  Inc. (RGLD)
• Yamana Gold  Inc. (AUY)

Oil & Gas Storage & Transportation (7.00%, 7 securities)

• El Paso Pipeline Partners LP (EPB)
• Enterprise Products Partners (EPD)
• Magellan Midstream Partners (MMP)
• ONEOK Partners  L.P. (OKS)
• Plains All American Pipeline (PAA)
• Southern Union Co (SUG)
• Williams Partners L.P. (WPZ)

Precious Metals & Minerals (7.00%, 7 securities)

• Endeavour Silver Corporation (EXK)
• First Majestic Silver Corp (AG)
• Hecla Mining Company (HL)
• Pan American Silver Corporat (PAAS)
• Silver Standard Resources  I (SSRI)
• Silver Wheaton Corporation (SLW)
• Silvercorp Metals Inc. (SVM)

Careful with the gold and related stocks, the CME raised margin requirements on gold

So what’s the market going to do today, is this a new morning in America? Let’s load up ThinkOrSwim………here we go folks another day of fun!

Remember, you are responsible for your investment decisions, and I am not. Please do your diligence, and please take ownership for your actions because I‘m sure not going to.

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

NLY - Annaly Capital Mgt. Ultra high dividend stock – It’s been shaky, but so far NLY has held up reasonably well through current stock market slide.

I still have a Put position to protect NLY. (strike price $17.00 for 3rd Friday in Sept) Also puts on other dividend stocks.

GLD – (Long Gold ETF) Obviously a mistake to sell and take meager +3% profits. Like a millions of other people who see worldwide economic problems ahead – waiting to buy another dip.

Disclaimer - Personally I own  a group of dividend stocks including NLY.  I have placed puts on all of dividend stocks I own. I buy everything in the hypothetical Investors411 portfolio. I also own some SDS & TZA (ETF’s that double and triple short the market) as hedges.

________________

Long Term Outlook (for US Economy)

BEARISH

_________________

Long Term Outlook (for US stocks)

CAUTIOUSLY BEARISH*

*Investors411 has 5 different long term valuations – BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, AND BEARISH.

* Everything written in BROWN is a repeat from a previous day

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

The manufactured debt crisis has dealt a serious blow to our economic recovery. The clear and present danger of the jobs crisis and a double dip recession has been negatively impacted. Since the Tea Party has come to dominance the jobs picture has headed south. There is far more pain ahead for the US economy

• The focus has been changed from creating jobs to dealing with the debt.

• Corporate oligarchy is taking advantage of the distraction to ship more jobs out of the USA. Latest – Ford builds billion dollar plant in India. Emerging markets are growing while ours continue to shrink.

• Corporations are overflowing with record profits, yet NOT creating jobs in the USA. Any cuts in government spending NOW means less jobs NOW.  Without jobs there is no recovery. Lisa Shapiro on job cuts

• Most cuts to government in the next year+ will do serious damage to job growth. Those cut 5 and 10 years out will do far lass damage.

Obvious political consequences of debt deal for Obama was perhaps stated best by a young voter who first voted in 2008. – “I’m done with Obama…I can not support a President who won’t stand up against bullies.”

Mitt Romney, at the last moment, threw his support behind the Tea Party and rejected the budget compromise. The Invesment Banker running for president (Romney) is no different than any Tea Party member. Far less moderate than most Republicans who voted for the deal.

I would have followed Bill Clinton’s advice. Raised the debt ceiling using the 14th amendment and included tax cuts for the wealthy in any deal.

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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

_______________

.

Technicals, Fundamentals & Analysis

Shorter Term Outlook.

day/days/week

• The MO was over -80 yesterday. (see chart) When the Dow dipped @ 140 points the MO would have reached the lowest levels  in over a year. But the MO, tabulated only at the close, closed 130 points higher.  Now that the pressure of the manufactured debt crisis  is gone both the MO and the USD should be better in forecasting. Translation – way too many oversold short positions becomes an important factor to juice a rally.

• Two of our most successful technical forecasting tools listed below -

• The McClellan Oscillator (MO) chart rose to -69.81(-30 somewhat oversold, -60 oversold, -90 OMG oversold). MO clearly shows oversold  conditions exist. Current Level = Bullish

• $USD The Dollar rose significantly +0.49% yesterday (+/- 0.50 is a significant move and the dollar is usually a contrarian indicator) On a fundamental level you’d expect a rally in dollar over temporary settlement of debt problem. Technically we are sitting near bottom of trading range.= Neutral

• Reading The Tea Leaves – A technical relief rally was hurt by bad economic data (ISM number) yesterday. However, when you are this much oversold all you need is the slightest hint of good news to string together up to handful of bullish days. When MO gets into the green (above zero) that technical pressure eases off.

Longer Term Outlook

weeks, month, months

• Some serious damage has been done to the US political structure as a functioning body. Even though we didn’t default everyone now realizes that there are a sizable number  of US politicians who are willing to hold the US economy hostage to their ideological beliefs.

• For Main Street USA this means uncertainty. This will be devastating.  The debt crisis deal will cost jobs rather than create them. If you contract the money supply in the USA it means less jobs.  Investors411 mantra - How do you fix any deficit without jobs?

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Paul’s Corner

Hello world, it’s Aug 2 and pre market futures are down, let’s sit on the side  of the market for awhile!

My good friend Ron Brown from HGSI summed it up nicely last week “It is a dangerous market environment, so unless you like extreme mood swings, it may be best to hold off on initiating new positions.”

One would have expected more than a mild yawn in the market after Washington agreed to stop acting like children but what can you expect from a bunch of babies? Futures are down this morning as it appears the forecasters on Wall St are back to looking at why the economy is stalling again. When they figure out why I wish they would tell us.

So what was in demand on a down day is always a great place to search for stocks. Yesterday Aug 1 the top 3 groups:

Oil & Gas Exploration & Production (11.88%, 12 securities)

• Anadarko Petroleum Corp (APC)
• Approach Resources  Inc. (AREX)
• Berry Petroleum Company (BRY)
• Brigham Exploration Company (BEXP)
• EQT Corp. (EQT)
• EV Energy Partner LP (EVEP)
• Gulfport Energy Corporation (GPOR)
• Kodiak Oil & Gas Corp. (KOG)
• Noble Energy  Inc. (NBL)
• Range Resources Corporation (RRC)
• Royale Energy  Inc. (ROYL)
• Vanguard Natural Resources (VNR)

Casinos & Gaming (5.94%, 6 securities)

• Churchill Downs Inc. (CHDN)
• Entertainment Gaming Asia  I (EGT)
• Gaming Partners Internationa (GPIC)
• Las Vegas Sands Inc (LVS)
• Melco Crown Entertainment Lt (MPEL)
• Nevada Gold & Casinos  Inc. (UWN)

Specialty Chemicals (5.94%, 6 securities)

• International Flavors & Frag (IFF)
• Lubrizol Corporation (LZ)
• LyondellBasell Industries NV (LYB)  (YSL 4 Member)
• Material Sciences Corporatio (MASC)
• Rockwood Holdings  Inc. (ROC)
• W.R. Grace & Company (GRA)

Dave Steckler always has an interesting blog and he specializes in ETF’s. Yesterday he discusses how to use the Bollinger Band around a stock and the 4 day SMA to time entry signals:

The composite index touching the upper BB should be viewed as a set-up, not as a long entry signal.  If the market continues falling like it did in the first half of June the composite index will continue climbing the upper BB – wait for the index to close below the 4-day SMA after touching the upper BB before going long.  Put another way, the BB touch is the set-up and the SMA crossover is the long signal.  This last happened on June 14th.

Please read his whole blog to understand this principle.

LINK

So what’s the market going to do today, futures are up this morning, is this a new morning in America? Let’s load up Quote Tracker………here we go folks another day of fun!

Remember, you are responsible for your investment decisions, and I am not.  Note, none of the above stocks are recommended for buy or sale. Please do your diligence, and please take ownership for your actions because I‘m sure not going to.

.

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

Short term traders - You have an MO at -70. This should be a decent opportunity to invest in a momentum play

Longer Term Investors – Specific areas tied to globalized companies and foreign stocks could outperform. Defense contractors & some heath care stocks are negatively impacted by debt deal in DC and will sufer.

NLY - Annaly Capital Mgt. Ultra high dividend stock – Kudos to anyone who bought NLY on the dip.

In  my personal portfolio I have a Put position to protect NLY

GLD – (Long Gold ETF)

UDN – (Short Dollar ETF)

Both UND & GLD were bought  because of the clear and present danger of a default. Both are overbought at the present time. It would be more prudent to enter each position when it was oversold.  Selling UND today.  Better long term outlook for GLD (gold).

Disclaimer - Personally I own  a group of dividend stocks including NLY. I have placed puts on one ETF of a major index and a couple of dividend stocks. I buy everything in the hypothetical Investors411 portfolio. I sold about 1/2 of the short positions yesterday

JS in the comment section has used the term ”insurance” to describe the way ”Puts” are used protect long term investments. – email me if you want to know more or post a question in the comments section.

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Long Term Outlook (for US Economy)

BEARISH

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Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative Comments Section every day.

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Long Term Outlook (for US stocks)

NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

.

Why so many people who remember the past have problems with the right wing’s political agenda

Obviously we’re NOT going to punish the uber wealthy, unregulated free markets and greed that got us into this horrific mess.

No the right wing agenda is to force cuts ONLY on working class Americans.

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JOBS, JOBS, JOBS

More and more, US multinationals are laying off workers at home and hiring overseas.

What happened after the 2008 meltdown is globalized employers laid off workers in the USA. Term for this is disaster capitalism. They rehired them in other foreign countries.

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Lipstick on A Pig

Greece – Today the Greek parliament will vote on and probably approve austerity measured imposed by the IMF and European Banks. Germany’s leader has proclaimed “Greece will NOT be our Lehman Brothers.” Stocks should rally. But are we putting lipstick on  PIIGS

Here’s reality – The massive protestors outside parliament against this are all voters. Voters almost always vote their self interest and Greece is a democracy.

Greek parliament is made up of 303 seats and the ruling Socialists (PASOK) who favor the bailout have a thin majority of 155 seats. The #2 party, New Democracy (ND) has 86 seats. The ND other minor parties who are also against the bailout have less votes.

Two major polls show that instead of the 2 to 1 majority that the pro bailout party enjoys over the anti bailout ND party in Parliament, the ND party is now slightly ahead in popularity. All the other minor parties (Communist is the next largest) have also gained ground. One can easily infer that the Greek people by the level of anger (there is a two day strike now happening) and polling data that sooner or later this vast majority of anti bailout voters will gain power in Greece.

All the PIIGS countries in Europe face similar problems. Sure looks like its just a matter of time before the you know what hits the fan.

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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

Shorter Term Outlook.

• The McClellan Oscillator (MO) chart rose to +10.81 (below -30 = somewhat overbought, above +30 somewhat overbought ) Repeat - The MO has been unable to get above the +30 to +50 range for 6 months. Still closest to middle of range and plenty of room for bulls or bears to work with = Neutral

• $USD The Dollar fell  significantly -0.50% yesterday. (+/- 0.50 is a significant move and the dollar is usually a contrarian indicator) The trend since May 1 is bullish for dollar and bearish for stocks. The dollar fell back after just barely making a short term high on its chart. Tend for stocks = Bearish

• Reading The Tea Leaves - Shorter term – From yesterday – “Our MO chart has been very accurate in predicting short term tops and bottoms. So tea leaves say wait for an oversold or overbought levels to be reached before acting. The whole roller coaster ride of the last two weeks is a big spring winding.”

• Chart of NASDQ – Today we may see some sort of short term breakout – we are far closer to upside breakout levels.

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Paul’s Corner

Gloom and Doom?

The market is down, much of our profits have disappeared  and there is no hope in sight, right? Well looking at market internals, there just may be some life left in the market. Ian Woodward posted a great blog this weekend and here are a few points to consider.

LINK

Ian includes charts to show how the market canaries (NFLX, AAPL, BIDU, AMZN) are performing.

The market is currently range bound between 2700 and 2600 on the NASDAQ. So consider 2700 as resistance and 2600 as support. If we go through 2700 on good volume the market is “probably” gonna keep going. If we drop through 2600 next obvious support is 2500, so watch these numbers closely.

One of the ways we follow the market is to look at  stocks ERG numbers to see which way the market is going. ERG refers to Earnings Per Share, Relative Strength, and Group Strength of the individual stock. Assigning a number between 1 and 99 to each of the ERG components you can evaluate the health of any stock relative to the rest of the market. A week ago we only had 13 stocks with an ERG number higher than 270, this week ended with 26. Although extremely low numbers, it still shows there are some quality stocks starting to move. Also the numbers of stocks with “A” accumulation ranking is improving.

I have been keeping an ERG list for years and it’s a very good confirming indicator for the market.

Last Thursday I posted a list of stocks that have done well through this correction and in his blog Ian lists a  group of 25 that are currently doing well. Between these two lists there are some good stocks to consider IF this market takes off.

Remember, you are responsible for your investment decisions, and I am not.  Please do your diligence, and please take ownership for your actions because I‘m sure not going to.

Paul has the full results and I will post them in the POSITION Section of the blog ASAP.

This time out we didn’t do as well as we would have liked, but the results were still positive. Both Paul and I will go over what worked and what failed this week to create a better YSL #5

Since WE have toasted  the experts and beaten the S&P 4 times in a row Paul has already called for a YSL #5. – Send in entries to me or post them on the comments section of the blog.

Send a sort list of  three  or less socks you think deserve consideration.  Paul and I will go over them and choose 12 to 15 that should again toast the S&P 500.

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

NLY - Annaly Capital Mgt. Ultra high dividend stock. Bought on a dip over a month ago. After a 5+% gain is has come down a bit last two days.

Gold /Silver Trade – These commodities usually move the opposite direction of the dollar. Dollar is going up (mostly because European outlook is bleak) so gold/silver is going down.

Shorting Banks - one major reason major banks are underperforming stocks is that the Fed will on June 30th stop purchasing treasuries from them. This and mortgage problems have have led this sector down. There are some signs (three weeks of flat trading)  that a short term bottom has been reached (see link above)

Repeat longer Strategy remains - Waiting for MO to hit overbought levels before acting

• Short any rally - Investors411 will use TZA (3X short small cap stocks) and SDS (2x short S&P 500 more conservative).
• Sell long positions into any rally -

Disclosure - I own NLY &  a group of dividend stocks which I have used some short ETF’s to protect. – I buy all stocks mentioned in the hypothetical Investors411 portfolio.

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Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative comments section every day.

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The Fed has moved from an expanding money supply to a neutral – No QE #3. Congress is threatening to contract the money supply. “We [the USA] need to grow at this point more than anything else.” Investors411 outlook will remain negative on the USA unless the Fed and/or congress return to more pro growth policies and/or Euro defaults are resolved.

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Longer Term Outlook

Neutral/CAUTIOUSLY BEARISH

The NEUTRAL in the forecast will vanish If/when we break the recent lows of the S&P 500 chart

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

Illustration – Mark Matcho/Mother Jones

Corporate America is flush with cash and profits are up 22% this year. Instead of an editorial, here are three charts showing what’s happening to growth, productivity, wealth, &  JOBS in the USA and other major democracies. You be the judge.

Rich Get Richer and  You Get Scraps

Growth is Back

But Not Jobs in USA

These are just three of a dozen eye popping and credibly sourced  charts found in Mother Jones. You can see where American jobs are going at the MJ Link. A WSJ chart will be featured tomorrow with this info.

Other democracies protect their workers, have far stronger unions, and unions work with both companies and their federal government to protect jobs and company profits.

Here working class Americans “fight over scraps on the table” and blame each other while the uber wealthy get richer.

A number of you have pointed out in the comments section on the victory for Gay rights/marriage in NY.  Popeye quotes the latest Gallop poll shows 52% to 43% now favor the NY approach as long as religious beliefs are respected.

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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

Reading The Tea Leaves Longer Term -On May 20th The long term outlook was downgraded and then again on June 7th.  A rough translation of this is 4 to 6 months there is a strong possibility that  the benchmark S&P will end up 10 to 20% off its high. There are two foreseeable economic problems that might cause us to reach 20% or a larger meltdown.

1. Europe mishandling of their debt crisis – The bottom line is do European banks stay strong or is their a run on them because of the debt problem?This problem has been exacerbated by the 2008 financial meltdown
2. Default on American debt – America’s role as a world leader and financial model has been seriously eroded in the past decade.  Polarized American politicians are playing a high stake game of chicken with the national debt and the remaining credibility of our financial/economic model in the eyes of the world.

Long term the later is probably a bigger problem.

Shorter Term Outlook.

• European Debt crisis – Legendary Investor George Soros and latest (probably a good long term move, but Not for stocks) EU raises capital requirements for banks

• The McClellan Oscillator (MO) chart fell to -14.81 (below -30 = somewhat overbought, above +30 somewhat overbought ) Repeat - The MO has been unable to get above the +30 to +50 range for 6 months.  The last low was close to -70 and the MO has a way to go before reaching that.  = Neutral

• $USD The Dollar rose  significantly +o.48% Friday. (+/- 0.50 is a significant move and the dollar is usually a contrarian indicator)  The trend since May 1 is bullish for dollar and bearish for stocks. The dollar is now at new short term high For stocks short term trend = Bearish

• Reading The Tea Leaves - Shorter term - Our MO chart has been very accurate in predicting short term tops and bottoms. So tea leaves say wait for an oversold or overbought levels to be reached before acting. The whole roller coaster ride ride of the last two weeks is a big spring. winding.

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A Long Term Portfolio

Many Thanks to The Critic for sharing her portfolio. The Critic has been with Investors411 from the start and is a frequent contributor to the comments section.  The Critic is an executive at a major company.

The Critic largest position is in cash and has stated many times in the comments section that she has protected much of the below portfolio like JS by using Puts & short ETF’s (see comments section)  I’ve been working with Critic and another person in developing the lists of dividend stocks as long term investments. Again Many Thanks for sharing .

Disclosure I own many o the below positions.[Editor]

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Barr, most of these stock have done well since the start of the year, but the future is clouded.  Just remember to tell people that I’ve bought protection because of the potential risks ahead and I buy the dip. If you want to use them for Your Stock List feel free. Like all dividend stocks I choose only those that have flat or increased dividends.

• NLY – Biggest fish in the high dividend group. Jim Cramer loves this stock.
• AGNC - Little fish in the same group.
• CVX - Oil Company with small dividend. Much better than Exxon because it buys back far less of its stock to prop up stock price.
• MCD – Giant Food Company with smaller dividend.
• KMP – Limited partnership – Tax considerations here, but I know the company and like it.
• T – Phone company and a big one.
• WIN – Phone company and a small one with higher dividend.
• SNH – Buys senior properties. Unless badly managed this area has to expand.
• DUK – This is my energy play
• HCN – Health Care REIT
• HTD - An ETF from John Hancock – Some tax advantages here.

These are the major dividend stocks in my portfolio. I have a some smaller position. and non related mutual and bond  funds. I own these long term because I don’t have time to watch markets day to day and for tax reasons.  Hope this helps.

PS – Barr, please remind people about risk.

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

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Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

NLY - Annaly Capital Mgt. Ultra high dividend stock. Bought on a dip over a month ago.

Repeat longer Strategy remains -

• Short any rally - Investors411 will use TZA (3X short small cap stocks) and SDS (2x short S&P 500 more conservative).
• Sell long positions into any rally -

Disclosure - I own NLY &  a group of dividend stocks which I have used some short ETF’s to protect. – I buy all stocks mentioned in the hypothetical Investors411 portfolio.

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Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative comments section every day.

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The Fed has moved from an expanding money supply to a neutral – No QE #3. Congress is threatening to contract the money supply. “We [the USA] need to grow at this point more than anything else.” Investors411 outlook will remain negative on the USA unless the Fed and/or congress return to more pro growth policies and/or Euro defaults are solved.

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Longer Term Outlook

Neutral/CAUTIOUSLY BEARISH

If/when we break the recent lows of the S&P 500 that little bit of NEUTRAL still in the forecast will vanish

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

Nobel Laureate Michael Spence has a workable solution for the Jobs crisis.

His book – The Next Convergence

The great illusion in the USA is somehow the private sector will bail us out. Baloney!

American Companies are doing GREAT. They are flush with $1.68 trillion in profits from last quarter. But as you all know (see past Investors411) they take that money and invest it overseas. Spence work looks into just that the loss of jobs here from 1980 to 2008. The money quote from Time Magazine

“The companies that did business in global markets, including manufacturers, banks, exporters, energy firms and financial services, contributed almost nothing to overall American job growth. The firms that did contribute were those operating mostly in the U.S. market, immune to global competition — health care companies, government agencies, retailers and hotels. Sadly, jobs in these sectors are lower paid and lower skilled than those that were outsourced.”

Spence offers a concrete formula for what the USA has to do to create jobs.

Solving The Job Problem

Germany in 2000 was faced with a huge economic problem of incorporating the much economically weaker East Germany with the far more weaalthy West Germany.

Government, labor leaders and CEO’s sat down together. Government offered companies temporary tax breaks if they would NOT outsource. Company leaders worked with educators to find the right skills they needed.

It worked!

( last page of the Time Magazine article referenced above has  more)

The solution is simple and obvious, yet the political polarization and the lobbyists in the USA keep tearing us apart.

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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

• Congratulations to both Paul & The Critic for taking profits at the close on Friday – Nobody ever went broke taking profits. (see comments section of blog) A good short term move.

• The McClellan Oscillator (MO) chart fell  to -67.93. US Stocks are oversold. (anything below -60 = oversold) Just like last week,  another “snapback” oversold rally is possible today. This is the most US stocks have been oversold since mid March

• How the week sets up from Jeff Miller in Seeking Alpha – A more bullish view.

• A debate on IMAX (An Investors411 favorite that is under pressure now) from Seeking Alpha - Bulls and Bears

• Reading The Tea Leaves – Repeat from Friday – “this looks like what they call a dead cat bounce.“ Obviously this happened Friday.

• Reading The Tea Leaves - Longer Term - Repeat from last week –  ”See May 20th blog for forecast for this summer.” Fundamentals in the end will trump technical analysis and fear/greed. But right now we are running on fear and that’s bearish.

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Fed Conspiracy Theories

There is no end to conspiracy theories since our financial system is run in the shadows. It a globalized world out there. Our Fed Bank will have purchased $600 billion by June 30th from the following “Primary” (that’s their term) Dealers.

Obviously the world’s globalized banking system is interconnected. The international banking cartel rules the world (If you define controlling the flow of money as ruling) Our Fed is the Big Kahuna in this system. But you may find it interesting that 12 of the 20 Primary Dealers are Foreign Banks. Foreign Banks are bolded and all 20 Primary Dealers listed below.

• NP Paribas Securities Corp.
• Barclays Capital Inc.
• Cantor Fitzgerald & Co.
• Citigroup Global Markets Inc.
• Credit Suisse Securities (USA) LLC
• Daiwa Capital Markets America Inc.
• Deutsche Bank Securities Inc.
• Goldman, Sachs & Co.
• HSBC Securities (USA) Inc.
• Jefferies & Company, Inc.
• J.P. Morgan Securities LLC
• MF Global Inc.
• Merrill Lynch, Pierce, Fenner & Smith Incorporated
• Mizuho Securities USA Inc.
• Morgan Stanley & Co. LLC
• Nomura Securities International, Inc.
• RBC Capital Markets, LLC
• RBS Securities Inc.
• SG Americas Securities, LLC
• UBS Securities LLC.

You know how oceanographers tag a shark to see where it goes. I’d love to be able to tag the printed $ coming out of our US Treasury and see where it goes.

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Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

SLV/AGQ (later is very roughly 2x silver and another possibility)  SLV Sold 1/2 for +3% profit. Last part was stopped out at just above what it was bought for. Total Profit +2%

NLY - Annaly Capital Mgt. Ultra high dividend stock. (I realize most of you do not know how to do this or perhaps understand the following, but like The Critic I have bought insurance on NLY - a July put at $18. This cost me  a bit less than 2% of NLY’s value)

Caution - “Owners of NLY should look at it chart. A 3 year history show that almost every time this stock and others like it get over extended there is a sharp one day high volume significant fall. Two major declines in the last six months and we are long overdue for the pattern to repeat itself. For prospective buyers after the dip is the time to buy.”

As predicted NLY has had a big drop(for NLY a @2% drop os two days is big)  I expect this drop will continue at least for today and perhaps break though its 50 day moving average.  Investors411 looks at NLY & AGNC as potential Buy the dip stocks because of big dividends. History (chart pattern shows that NLY can easily fall below its 50 day moving average, and that’s a potential buy point.

TZA - (3 times short small cap stocks) Bought 1/2 position in TZA (3x short small cap stocks) at 38.65 on Tuesday   Added another 1/2 position to TZA at 39.75 at/near open Wednesday.  Bought another 1/2 TZA position at 39.75 Thursday.

Investors411 has recommended using TZA or SDS as a hedge/insurance against losses in NLY or other dividend stocks (see past month blogs on dividend stocks.)  stocks) Although stocks may rally today the fundamentals behind the call are still solid and if you are using these short ETF’s I’d keep them in play.

Will add another full or 1/2 TZA positions on any modest market rally.

Repeat from last week - Therefore Strategy remains

• Short any rally - Investors411 will use TZA (3X short small cap stocks) and SDS (2x short S&P 500 more conservative) .
• Sell long positions into any rally -

Taking Profits –  Nobody goes broke taking profits. If you ate net short the market take the profits (I like anything above 5%) and short the next rally.

Disclosure - I own NLY, & TZA - I buy all stocks mentioned in the hypothetical Investors411 portfolio.

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The Fed has moved from an expanding money supply to a neutral – No QE #3. Congress is threatening to contract the money supply. “We [the USA] need to grow at this point more than anything else.” Investors411 outlook will remain negative on the USA unless the Fed and/or congress return to more pro growth policies.

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Longer Term Outlook

Neutral/CAUTIOUSLY BEARISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

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Dividend Stocks

The 10 year Treasury bond is now under 3%. There is some obvious risk in holding growth stocks though the summer (end of QE #2, Debt ceiling crisis, & emerging market inflation) So where does the money that’s out there in the system go? I believe dividend stocks, becuse of their stability, cash rich banace sheets, and second stream of income (the dividend) offer a reasonable choice.

If things become extremely bad these stocks will loose money. Check out Investors411 posts in May on dividend stocks.

Chuck Carnevale from Seeking Alpha believes holding dividend stocks is preferable to bonds right now. His editorial contains a list of 20 dividend stocks to consider. The link is to page 2 of his editorial.

Like some who write into the comment section, I have protected  these stocks with puts or calls on ETF’s that short market indexes.

I don’t plan on holding these stocks forever, If the money supply gets tightenes (something that will happen if the Tea Party ideology wins out) I’d sell. Below is a list, like Carnevale’s to consider if you want to buy and hold for longer periods of time.

Here’s a list of what I, my family, or the non profit I invest for  own

Personally, now, about 30 to 50% of my portfolios are dividend stocks and ETF’s

• NLY – higher dividend/higher risk
• AGNC – higher dividend/higher risk
• ANH – (small position) higher dividend/higher risk
• CTL (telecom)
• T (telecom)
• VZ (telecom)
• WIN (telecom)
• SNH senior housing
• KMP (limited partnership has tax implications)
• HTD ETF  (has tax advantages)
• CVX – Chevron
• DVY – ETF (Dow Dividends)
• SDY – ETF (S&P Dividends)

Amounts of money are diversified by asset class. Example – I own less of the 4 telecom stocks individually than other stocks because together they are so similar.

Will probably buy on dip the following to diversify.

• DUK - Almost there. (energy)
• D (energy)
• MO (tobacco)
• PM (tobacco)
• KMB (food)
• PG (consumer staples)

I don’t like the drug companies, because of the uncertainty. – If a major drug has side effects, that stock can tank quickly.

Caution – Most of these are too high right now. Buy the dip.