” it’s difficult to get a man to understand something when his salary [or portfolio or election] depends on his not understanding it.“ Upton Sinclair

Some Examples

• Shadow Banks – The largest financial meltdown in history in 2008 and more fraud revealed over phony mortgage documents – No one goes to Jail. No massive amounts of money go to fund regulators, no return to the rules that prevented the crisis. All the politicians from Obama on down look the other way because it is the Wall Street money that gets them elected.

• The Poor  The Children and The Elderly – Wall Street shows record profits and bonuses. GE and other corporate giants pay NO taxes. Taxes for the wealthiest in the USA have been slashed for decades and off shore accounts abound. Our Central Bank is flooding its members shadow institutions with money.  Who will Republican politicians sacrifice for financial gain? Not those who fund their elections.

• Climate Change – “So the joke begins like this: An economist, a lawyer and a professor of marketing walk into a room. What’s the punch line? They were three of the five “expert witnesses” Republicans called for last week’s Congressional hearing on climate science.” One scientist was funded by the billionaire industrialist Koch Brothers  (they also fund the Tea Party) but he reversed his position (Paul Krugman) and is now an outcast.

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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. Remember Fed liquidity (POMO, QE 2 or quantitative easing) announced ending is June 30th.

• Yawn - Another low volume rally. Fed liquidity has a muzzle muzzle on the mouths of bears.
• Jobs numbers have improved dramatically -700,000 when Obama took office to +216,000 last month
• Now Bulls have two strong fundamentals – Jobs are recovering and Fed’s liquidity injections.-
• A jobs good number Friday started a rally that got hurt by rising oil prices (Libya and upcoming NIgeria elections) and falling APPL stock. So gains were tempered.
• New quarter and attention will turn to earnings.
• Emerging Markets are red hot right now and exploding higher – Rally leaders.
• Monday’s are often the best day of week for stocks.

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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 saw a huge rally collapse and ended  a wee bit lower -0.03. Chart pattern showing volatility/erratic so short term hard to call, but longer term bearish  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 +52.29. Over past three months The MO has had problems getting over +30. This is, therefore, the highest the MO has been since early September 2010 = Bearish

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Reading The Tea Leaves

• Technically, the MO is screaming oversold.
• Fundamentally Japan keeps getting worse ( more tons of radioactive water dumped into ocean -11500 tons today). Libya is a stalemate and looking like a quagmire. Great if your a weapons manufacturer, but bad if your the taxpayer funding them or worse if you’re getting killed.
• Europe still titters on the brink with the many PIIGS near default.
• Housing figures are deteriorating as is consumer confidence
• Our financial system is still corrupt and protected by the vast majority of politicians form both parties. – No one goes to jail
• Our markets are still manipulated by our Central Bank – by keeping dollar low, zero % interest rates, buying federal debt, and adding liquidity.

All the above would absolutely toast any other stock market. However we bubblisciously move higher.

When will the bubble pop?

The dollar is the key metric to watch. What’s holding the dollar up is that the other major currencies are also so bad – Europe and Japan.

What to watch today - Market movers – UUP still has most influential, unless others make some huge move.

• 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 – Tech giant and market mover – Trading below its 50 DMA. Since mid February this char shows a series of lower highs and lower lows = Bearish
• Japan Rector Developments – This keeps getting worse.
• EEM – Emerging market ETF – On a breakout run, but getting over extended.

Bottom Line – Fighting the Fed is a loosing strategy. They Rule.

Stocks are significantly oversold, but there are many in the wings waiting to buy the oversold dip. Now is not the time to buy most stocks wait for the dip

June 30th is the day POMO stops and this could pop the bubble. But, until then dramatic rises in energy or a fall in the dollar are the critical warning signs. Remember, A slowly falling dollar is good in the short term for stocks. A huge fall show lack of confidence in the USA.

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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.”

Going to add to positions today, hopefully on a dip. (see past Investors411 for options or look at Positions section of blog) I’d love the MO to be lower. Preferably at or near -60. But, it is to the benefit of both the High Frequency Traders (they make money with huge trades in microseconds) and the Fed to manipulate stocks higher.

• The HFT’s are not going to kill the goose that lays golden eggs for them the stock market.
• The opaque Fed actually  has the rough data on just how over leveraged the opaque shadow banks still are. The fact that the Fed is into QE 2 (QE 2 = the on the surface print and dump money – the rest is hidden and we really don’t know the grand total print and dump which is collectively easily in the trillions) says the shadows still need bailout protection.

Fresh Face for the Old Guard Corporations

Jobs/Candidates/Corporate Interests

Three of you in the comments section of the blog are aghast at the nomination of Republican Tea Party’s Christine O’Donnell in Delaware. You can see her lack of  qualifications on Wikipedia. Other sources are a lot harsher.

She is a far right religious person [masturbation = adultery]  a Perky Pretty Palin, & most important she has backing from the major corporations/industry groups that dominate America.

Bottom Line - There are perhaps a half dozen major old guard industry groups that are focused on one thing – profits. They use scaling and create their jobs abroad instead of at home. These giant companies gobble up smaller ones then (think Gordon Geko) then decimate the jobs of the acquired smaller company to make greater profits. Even the smaller companies in an industry group devour the start ups and diminishing their work force is a top priority. That’s the giant jobs eating food chain for America’s old guard globalized corporations.

O’donnell is perfect for Wall Street. perfect for the Koch Brothers (& other wealthy oligarchs) that finance the Tea Party, Perfect for the old guard major corporations. Perfect for religious groups & others manipulated by fear. But devastating for the job starved middle class.

Jobs/ Helping Small Business

Two Republicans broke ranks and voted with Democrats to break Republican Senate filibuster that was against helping small business. House should vote on this today or tomorrow.

“would create a $30 billion fund that the government would invest in independent community banks to encourage lending to small firms.

It would also exclude from taxes all capital gains on sales of small-business stock, and ease tax rules for expending and depreciating equipment. Tax breaks in the bill total $12 billion.” Source ultra right wing CNBC

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!

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Technicals, Fundamentals & Analysis

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

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

Term for the Day – McClellan Index/Oscillator - From Investopedia (don’t worry if you do not understand what they are saying. EMA = Exponential Moving Average an adjusted daily moving average of price) -

“A market breadth indicator that is based on the difference between the number of advancing and declining issues on the NYSE. It is primarily used for short and intermediate term trading.

To calculate subtract a 39 day EMA (of advancing issues – declining issues) from a 19 day EMA (of advancing issues – declining issues).”

Investors411 uses this Oscillator because it is broad based & does NOT include volume. If you look at  the MO chart below, you’ll find a strong correlation between +60 and above showing markets overbought and -60 and below showing markets oversold. These are often the starting points for rallies or declines that last for weeks and sometimes months. Compare with the rises and fall of major US indexes. The MO works differently in different kinds of markets (bear, neutral, bull) so it needs tweaking and the +/- 60 are numbers not written in sand,

US Markets - From financial channel Volume is down 30% relative to last year on major US stock indexes. Volume no longer a decent forecasting tool for major US indexes.

Forex dominates (see yesterday’s term of the day) today’s trading. Bank of Japan yesterday dumped billions into their currency in hopes that the Yen would depreciate.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar, rose  +0.43% yesterday.   For stocks trend is still =Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Fell a  -3.40% yesterday.  The BDI does not have the immediate impact that the MO or Dollar does. Third down day in a row with rate of fall increasing. If this continues BDI bullish trouble Right now longer term chart pattern Bullish/Neutral
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO fell to +38.99 yesterday. Very unusual NYSE rose =0.25% yet the MO fell a minor 14%. Trend is moving lower and indicator is = NEUTRAL

Reading Tea Leaves

Dollar market and Japan’s intervention for the first time in six years is what’s got traders attention. Japan an exporting country has watched the Yen (their currency) go up in price making their goods cost less. Governments around the world including our Fed (Permanent Open Market Operations) are all trying to manipulate their currencies so their goods cost less and their exporters sell more.  Is this the start of a trade war?  If so, China is way ahead in currency manipulations.

Positions

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

(I do manage 6 accounts that have other positions)

Current positions –  EWS (Singapore).

Trend is clearly bullish for stocks. If we can get the MO down to @ +20 (@a 100 point drop in Dow) and you can tolerate risk you could nibble. Also, of course, we get up over +60 on the MO and  a rise in the Dow/major indexes, that would be a selling or shorting point for those that can tolerate the risk. (see past Investors411)

Their are obviously safer entry/exit points, but that’s where the tea leaves tell me to start.

Long Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Koch Brothers

Buy/Rent Calculator

The NYT has an interactive Buy/Rent calculator for those making this decision. Of course the hard part is adjusting what future housing and rental costs will be.

Follow the Money

Every Sunday Frank Rich has a column in the NYT and more often than not its a home run. You know the front people behind the Tea Party and other right wing groups but the billionaires (Murdoch and the Koch Brothers & more) that fund or run the show are the real power brokers. Follow the Money

Here’s a quote from Rich of just what the Koch Brothers believe - “They haven’t changed.” David Koch ran against Ronald Reagan on this platform in 1980 -

“his campaign called for the abolition not just of Social Security, federal regulatory agencies and welfare but also of the F.B.I., the C.I.A., and public schools — in other words, any government enterprise that would either inhibit his business profits or increase his taxes.”

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KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Technicals, Fundamentals & Analysis

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

I realize that the vast majority of you want to know just if its safer to buy now and what areas to buy. A lot of the below material just makes your eyes glaze over and is techno speak. On the Positions Section of blog there are a list of potential ETF’s that should outperform the benchmark S&P 500. Generally,  The time to buy is on dips when the MO (see below) gets to -60 or below.

Investors411 want YOU to be a better trader or investor. The primary goal is to educate YOU. If you skim the below, you’ll see the major empahasis is on the massive currency/dollar market that, right now,  is walking stocks like you walk your dog on a leash.

Mantra for the month - The Black Box/High Frequency Traders BB/HFT control the majority of trades. Popular financial channel host Jim Cramer said last Friday – “BB/HFT make up 80% of trades.”

We had volume behind Friday’s big rally. Don’t have the faith in volume as an indicator for major indexes because of BB/HFT’s. Volume does have some more credibility when it comes to individual smaller stocks.

More importantly we had a falling dollar that has had trouble breaking through the falling resistance level (see $USO below). That’s where the action is. Dollar falls = stocks go up and visa versa. From  the BB/HFT’s to Central Banks to worldwide oil barons all play the massive currency markets and try to manipulate it to their advantage.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar fell a marginal -0.02%. Chart show falling 50DMA is a strong resistance level. Breaking down or up through it is the key for US stocks. = Neutral
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rose a marginal +o.33% Friday. This gives some stability to the 5 week long rally after two down days in a row. 5 week rally trend is still in place, but not entirely back on track = 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 -15.64 . This was a massive, almost +45 point move. If this move continues it could flame out real fast. Nevertheless, our #1 Buy sell Indicator is back at = NEUTRAL

Reading Tea Leaves

From Friday – “When fear is at its greatest – that’s the time to buy. Have we reached that point…Personally, I’m torn. There’s so much investment fear out there – Am I letting it cloud the facts?”  Answer – YES – We had an oversold bounce Friday that could continue for a few day or longer.

Friday I gave you all the reasons for an oversold rally, yet failed to take full advantage of it. That’s me in the doghouse with traders.

INVESTORS – The conditions were marginal, but still NOT good enough to nibble. If you like you can always do “in the money” coverd calls or invest in high dividend stocks to mitigate risk. A good time to buy these is when stocks are oversold instead of overbought.

CAUTION – This is a NEUTRAL market and ideally you’d like oversold conditions to exist in a BULLISH market. That’s why Investors411 is being cautious.

Still think there is a better than 50/50 chance of markets falling to/or testing this year’s lows - SPX 1020

UUP remains the ETF to watch because it tracks the dollar.  Yes, we had an oversold bounce and it could continue. But if the dollar breaks through its resistance & moves higher (see above on $USD) stocks will roast and toast.

Positions

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

Current positions - Small positions in EWS (Singapore) USO (commodity-Oil) & TYH

Traders - Bought TYH (3X technology ETF) again at 24.98 Friday. A smaller position than last time (5% of portfolio) because the conditions were not as good.

Reasoning – I should have bought it at the open when stocks dropped @70 points, but I was waiting for a 100+ point drop. When stocks moved higher than their open in basically oversold conditions (see MO for Friday) I bought the first dip. I did Not buy as much as before because the conditions were not as oversold. (also UUP was flat)

Holding TYH overnight is always a risk & other factors.

• The rebalance the TYH to more accurately reflect its positions & I do not have a super computer(s) to figure out if its out of whack like the BB/HFT’s do
• A single event can cause the TYH to more dramatically by the next open. We are talking about an ETF that does 3X what the tech stocks do.
• One reason I have the ability to trade this, is that I have the one of the financial channels on in the background as I work and can watch the market move.

Same philosophy applies. Have moved stops up to 1 below what it was bought for & and will take 3% to 5%% profits on 1/2 of TYH, hopefully today. Conditions not appropriate for any other buys.

INVESTORS - I know you’re frustrated & would like something to buy and hold. The good news is USO & EWS are both in the black, but haven’t reached the @5% profit level  where you can sell 1/2 and let the rest ride.

Long Term Outlook - NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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The Illusion of Democracy

In the USA we have an Illusion of Democracy. What we really have is a rich oligarchy that buys votes through money any lobbyists. Lets use two blatant examples.

• The Billionaire ultra right wing Koch Brothers - JAB a few days ago sent a link to a site that quantified and qualified the $50 million they have spent to influence the American public’s vote. These right wing zealots with their $50 million sure have vastly more of an impact than you do with your one vote.
• Let’s look at politicians who get this money – Great site to see how much your representative (Dems or Reps) is bought and by whom is OpenSecrets.org. Today’s focus Senate minority leader Mitch McConnell.  His leading contributors are shadow financials (securities & investment) at $1,147,924. Republican leadership just met with Shadow Financial and other Wall Street leaders on financial reform. Even ultra right FOX Business news carried the story

From the Tea party workers to the leadership of the Senate (include lots of Democrats in this) the truth gets distorted by the vast financial resources and screamers in & reported on by the media.

Yes, along with JAB I still boycott Exxon, and have now added Koch Industries (Georgia Pacific -paper products) to my small protest.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

I really try to make this stock section as simple as possible, but I certainly hear your public (see comments section) and private pleas to make it simpler.  Over weekend I’ll put together some simple rules, strategy and sources

Big volume + Big rally = Bullish Outlook

UPS – world’s biggest package mover clobbers expectations. = Bullish

Weekly jobless claims worse than expected – two weeks in a row – Bad for economy, bad for Obama politically, but neutral for markets.

Reading the Tea Leaves – Add UPS to JPM & INTC results yesterday and you get the financial and technology sectors growing over expectations. Add more packages are moving across the globe. Add the Dollar dropping and McClellan Neutral (NOT overbought)  Everything at least till the McClellan gets overbought says Bulls will continue to stampede.

Its time to buy the dip and ride this rally till we enter overbought territory on the McClellan Index.

Significant Indexes

• McClellan Oscillator rose to +19.34 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is still in NEUTRAL territory – technically neither overbought or oversold.
• US Dollar – fell   -0.42% yesterday. [Anything over +/- @0.50 is significant.] Mantra – right now The Dollar Rules Remember, dollar down almost always = stocks up. The dollar broke though its 50 Day Moving Average support level and next significant support at @$79.5. Dollar closed at$ 80.19

Positions

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

Right Now, as I read the tea leaves, it looks like the beginning (first week+) of earnings season is going to be a bullish period and it would be good to be invested in those stocks/ETF that are going to move the highest.

Example, Yesterday Investors411 added a 10% position in TYH the ETF that does 3X what the tech stocks do. Price 174.1.  Originally, had planned to hold this for a small gain (3+%) but it now looks safe to hold till the McClellan Oscillator hits or gets close to overbought territory.

Depending on your level of risk – Buy dips (1 to 3% = dip) of following ETF’s – You can also check out YOUR stock list.  but as Pail R suggests – watch out for when earnings reports ate (google company and you will find date or your trading platform should provide this)

List from MOST risky to LESS risky

• SOXL – 3x semi conductor stocks – Warning very thinly traded.
• TYH – 3X technology
• UWM – 2X small cap stocks
• ROM – 2X technology
• SSO – 2x S&P 500

I will be adding another 15%+ of these on dips.  Remember once we enter overbought territory its time to sell or lighten up. Set a stop/loss at a level you feel comfortable with. 7% maximum loss is what I use.  Once a stock goes up I usually raise the stop. There are more sophisticated ways of doing this, but I’m keeping it simple.  Investors411 will be exiting these positions as we come close to or over +60 on McClellan Oscillator.

Remember its a short term trade. It’s natural for their to be a dip today. If markets fall over 50% of yesterday’s gain in bigger volume this strategy is in trouble.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING