Investors 411 Blog

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“The Most Brutal Campaign Video

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• Italy stabilizing at 6.5% (good news) vs JMP’s disappointment balance each other. Every time the market has dropped over last couple weeks, buyers have appeared.

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Arianna

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Arianna Huffington

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Arianna is the most powerful women blogger out there.

This summer her Huffington Post surpassed  the NYT in

number of hits.

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Why?

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There are several reasons, but perhaps paramount is this woman knows what to write about and how to write.

Some gems from her latest on the 2012 Republican election campaign

The Disconnect Rises

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…some might expect that the seemingly endless debates and breathless saturation of media coverage of it all would converge into a real discussion of our major problems…. What we got instead was a deluge of attack ads, largely financed by the super PACs allowed by the Citizens United decision.

Former George Bush aide John Bridgeland, who helped found Opportunity Nation, professed himself “shocked” by America’s standing relative to Europe and Canada. “Republicans will not feel compelled to talk about income inequality,” he said. “But they will feel a need to talk about a lack of mobility – a lack of access to the American Dream.”

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Since Last Friday Investors411 has focused on the negative impact income inequality has on countries.

Those countries with greater income inequality like the USA have far more health and social problems.

To Live the American Dream

You Don’t Have to Move To Denmark

You Can Fight For It Here

The Equality Trust is a group co Founded by Richard Wilkinson whose TED lecture has now been viewed by over 700,000.

YOU Can Make a Difference

Spread the Word

Join the Equality Trust

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STOCKS

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Wall Street Bull and OWS Symbol

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• JPM  the before the bell earnings report Friday will set the tone. Big banks are leaders in the current rally and JPM is perhaps the most solvent of the group.

• Our #1 technical forecasting tool, the McCellan Oscillator (MO) rose to +56.65 . 50DMA at +0,37 Getting close to overbought territory – about +60. Since early 2008 a reading near +90 has indicated a reversal is coming, (for more see  STRATEGY link at top of blog)= NEUTRAL/bearish

• Starting to get worried about market being too overbought. One 200+ point Dow move would put us close to +90 or way overbought.

• The benchmark S&P 500 held onto its gains yesterday. We took out the October high – but the move was relatively minor as was the volume increase. A timid breakout.

• The tea leaves seem to say that the rally will fizzle out in the end of January. It will be a higher high and perhaps we can also establish a higher low.

• USA is leading right now, but can be dragged down by Europe, China, Iran, no payroll tax cuts and/or an unforeseen event.

Rolling Stone Photo – Wall Street Wives

If you haven’t taken your blood pressure medication this AM – Please take an extra dose before reading below.

Wall Street Wives – Matt Taibbi from the Rolling Stone has come up with another jaw dropper. Remember Geithner and Bernanke’s Wall Street Bailout. Seems that the “wives of   JPMorgan bigwigs walked away with $220 million dollars.” Opening line of editorial – “Most Americans know about that budget. What they don’t know is that there is another budget of roughly equal heft, traditionally maintained in complete secrecy“

The Closing Government Soap Opera. – Remember all the media attention of the $38 billion the Republicans were supposedly cutting from the budget. Two days ago the press went bananas when they found out it was only $14 billion. Yesterday the non partisan CBO put the actual figure at $353 million. Yes, that’s million with an M.

Crony Capitalism - It’s simply not fair to put the blame on the real housewives of of Wall Street or JPM. Now that the Fed was forced to open its books we find out the real husbands at Goldman Sachs got (See Matt Taibbi’s piece) $800 billion from the Fed. Yes, that’s billion with a B.

Get out of Jail Free - The US Treasury Department actually used hash language toward shadow bankers in a sternly worded proclamation Remember the phony foreclosures, robocalls etc. reveled months ago. Billions evaporated thousands lost their homes. Bankers got a tender tap in their wrists. The NYT has finally caught on and its headline story is on No one from Wall Street goes to Jail

GE is to return $3.2 billion tax rebates!? The whole AP story turned out to be a hoax. YOU pay taxes, GE doesn’t. – Bummer

The Prestigious Pinocchio Award. The Japanese government has been less than than honest about the nuclear reactor situation. FYI – TEPCO has just confirmed reactor 4 is open air fussion. YANKEE BOB is back in the comments section (scroll down) with an editorial. Here’s a sample – “the gamble with public safety to use Nuclear energy to boil water has failed.”

Maybe we’re more than just a morsal for Wall Street sharks. EW in the comments sections saw Obama’s deficit speech as hopeful – Obama quotes “There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires,” …. “There’s nothing courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill. And this is not a vision of the America I know.”

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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

Today a format change to focus more time on three investments for the 2nd quarter. But first here’s market news

• Fed’s ZIRP (Zero Interest Rate Policy) & QE 2 is sustaining stock rally and forces anyone who wants a high yield is forces into higher risk stocks,  or junk bonds.
• Yesterday’s action was no more than a pause (slight uptick) and we’re close, but haven’t reached oversold levels or a buy the dip level yet
• Paul often makes closing remarks in the comments section of the blog. From yesterday – “If any of you folks like to study the charts, you’ll see on many of the major indicies a clear “double top’ and that often signals coming hell fire and brimstone’s”

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Three Top Investment Areas

Rare Earth Metals - REMX (link to chart)

REMX is the ETF that tracks the major rare earth metal companies. Most data below is from Van Eck Global owner of REMX ETF.

This is a simple supply/demand story. The demand outstrips the supply. China currently provides 97% of rare earth metal production. InDec. of 2010 China announced it would cut exports of rare earth metals 35% because to keep some for their own use. REMX has only 17% exposure to china. It takes a long time to mine these metals so many of the companies REMX invest in have yet to become major producers. Obviously the companies/mines outside China are ramping up production as fast as possible.

Some applications for Rare earth metals include hybrid cars,steel alloys, wind turbines, flat screen TV’s, jet engines & cell phones. So you can understand the demand.

Downside risk – If we fall into a second recession or depression REMX will suffer. However it should outperform because of the supply/demand issue.

Gold - GLD & DGP (2x or ultra long gold)(both ticker symbols are links to charts)

GLD & DGP (2X) are the ETF’s that track gold prices. Obviously DGP carries twice the risk/reward.

Arguably the #1 source for gold information is GFMS Reuters last week featured their supply/demand analysis on both gold and silver. The fundamentals are relevant, but we all know, gold prices move higher on fear of the future.

I follow Jesse’s Cafe Americain on both gold and silver. The technical analysis and inside information is superb. In the future Investors411 will give updates from this site.

Silver – SLV & AGQ (2x silver) (both ticker symbols are links to charts)

SLV & AGQ are the ETF’s that track silver prices. Obviously AGQ carries twice the risk/reward.

Silver has more industrial uses. Links to important information on silver above.

If you are considering investing in this area or just want a good laugh you have to watch one of the two bears videos on silver. “You want me to buy more silver? Holy s–t man I’m going to s–t my pants.”

Paul would be a great source on individual gold, silver and rare earth companies if you are interested ask. MCP is the one company that I like in rare earth field. We almost put this on YOUR Stock List #4, but decided REMX would cover the sector.

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Positions

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

Capitalism’s Most Ruthless Monster

John D. Rockefeller who owned 90% of US  oil at the beginning of the last century many thought earned the title back then.  The NYT’s Frank Rich LINK , Salon’s Glenn Greenwald LINK and MSNBC’s Dillon Ratigan – LINK all seem to be nominating Goldman Sachs for this position.  Over the top analogy – yes. But it does have some basis in fact. Ratigan , a former analyst for two financial channels has the best explanation (video) .

Basically, GS  received $70 billion from the government & the Fed while the financial world almost collapsed.(see Ratigan video) GS took that $70 billion and bought everything financial for incredibly cheap prices in the collapse.  They bought stuff with our money that allowed them to keep from collapsing. They "didn’t pay a dime for this money." Basically "legalized theft."  As the authors point out former GS employees permeate both the Bush and Obama administration. How do we get rid of legalized theft?

• Demand claw backs
• Get rid of invisible exchanges
• Stop placing GS executive and their protégée’s  in charge of our government
• Limit (GS on track for $29 billion) bonuses to firms who got bailed out.

President Teddy Roosevelt broke up the big monopolies including Rockefeller/Standard Oil. Will any of this happen now? Not under the Obama administration or any Republican administration – Too many GS folks running government economic policy. Some bad PR perhaps, but like Rockefeller did, GS will throw shinny new nickels at the poor/us taxpayers – As taxpayers we got royally screwed.

Investing in GS and its main rival JPM (JP Morgan) may be similar to investing in a ruthless capitalist monster(s), but also an obvious financial winner(s) The competition was devastated, they have profits from our cash, the backing of our government, they’re smart and therefore, they rule. -Recommendation – Buy these stocks on dip s

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0.67%	up
NASDQ	-0,76%	up
S&P500	-0.81%	down
Russell2000	-1.15%	-

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

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

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

Technicals and Fundamentals

• prices fell and the #1 confirmation factor, volume, was mixed = Prices falling always bearish, but volume inconclusive
  
• Better than expected earnings for most companies yet markets fail to advance =  Short term bearish signal
• Dollar rose Friday (see below) = obviously short term  bearish for stocks, But longer term pattern bullish
• BDI (see below) forms higher high on its chart =bullish for worldwide recovery

FEARLESS FORECAST – Short term it looks like we are over bought and companies not moving higher on good earnings results. This is an indication of a short term correction. However The FED and the US government is not going to stop shoveling cash at the market as long as unemployment is so high. US companies are not hiring and will first hire abroad where labor is cheaper and growth faster.  So the cash shoveling will continue and Wall Street, once over bought situation is corrected, will continue to rise and the dollar fall.

Apple reports this evening

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Significant forecasting tools/Indexes for stock markets

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

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

The BDI is @ 38% off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI rose +40 points Friday and closed at 2728. This confirmed a higher high price on its chart pattern =  Bullish for stocks & world trade right now

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$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

US dollar rose +0.15 % The dollar closed at $75.62. We have developed a suppor t now resistance (it’s called support on the way down and resistance on the way up) level just below $76 . The dollar closed below its support level. = Bullish for stocks

NB -

• Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.
• A slow decline in the dollar = good a rapid decline = bad .
  

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

Positions

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

Review of Positions (Part 1) All recommendations for longer term investors unless otherwise indicated.

GLD – ETF for gold – Technically broke out over major resistance level at @ 100+. This is mostly a play that the US and other debt ridden G 7 nations will keep throwing money at economic problems till unemployment situation reverses itself. The longer this takes the higher GLD will go.  Mid 2010 is best read of tea leaves on this, but the created jobs will be tied to government bailouts in the US and not US companies producing jobs. – Recommendation – Buy the dip

EWZ – ETF for Brazil – This country is going parabolic in price now (not volume).  Going way up too far too fast. Very rich in natural recourses and more progressive government has meant more money for middle and lower classes who juice the economy and spend the cash. Due for a moderate/significant correction. Recommendation If there is a big spike in volume take some profits.

FXI – ETF for China – China has gone up too far too fast this year and is now lagging or mirroring US equities. China’s growth and huge stimulus package (relative to GDP) has led a worldwide recovery.  Somebody coined the word Chimerica and its true. Both economics are bound together through globalism.  The US middle & lower classes are shrinking , but the Chinese middle class and lower class is growing. This is now a decade(s) old trend.  Recommendation buy China on dips

EWY – S. Korea (much smaller position ) Tied to Chimerica, but N. Korea is a problem. Traders may want to take profits on any rally. There seem to be better countries to invest in like energy rich Canada, Australia or any country that is not consumed by debt and wasting money fighting wars. – Recommendation Hold or take profits on any rally.

More tomorrow. Including individual stocks.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Class Warfare – Editorial

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

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

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

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

Your Comments

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

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

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

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

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

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

Technicals and Fundamentals

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

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

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

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

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

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

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Significant forecasting tools/Indexes for stock markets

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

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

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

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

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$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

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

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

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

Positions

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

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

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

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

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

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

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!