.

Hope for the Future

.

.

Teachers/Heroes

.

Friday’s employment report had one critical fact,

The number of private sector jobs

since the start of 2009 is back in the black

.

The big job losses are coming

in the public sector & its major component is

Teachers

.

Just the Facts

.

.

Note – The blip higher in @ month 16 is due to census workers. Job losses are at the Federal, State and Local level.

.

Public Sector Jobs Created

Clinton = +625,000

Bush = +825,oo0

Obama = -600,000

.

American Austerity

.

“If public employment had grown the way it did under Bush, we’d have

1.3 million more government workers,

and probably an unemployment rate of

7 percent or less“

..

.

• As Obama’s stimulus program ran out, so did local funding for state,federal and local public officials.

• The USA was already falling relative to the rest of the world in education even before this.

.

Swimming Without a Suit

.

.

Tom Friedman’s

2009 Editorial on education

.

“From 1950 to 1980… we still had the lead in education…now we are 24th in science and 25th in math out of 30 countries.”

.

.

Our hope to regain our leadership in education has been crushed since 1980 Republican takeover.

Grover Norquist who wants to reduce  government to the size of a bathtub and drown it, has made Republicans, including Romney, take no new takes pledges even for the wealthiest Americans

.

Our stock market gains 100%

in the last 4 years.

Yet the right trys to take away even the right

of teachers (cops and firefighters etc)

to have collective bargaining.

.

Our Future

.

.

Is there a bright future

if we keep forcing

austerity on education?

.

Solid editorial and inspiration for above – Public Job Losses And GOP Chutzpah by Alec McGillis.

.

*******************

.

STOCKS

.

.

Trends

.

.

Headlines

.

• Greece takes center stage. Huge unexpected toasting by anti austerity voters. Stocks in Greece down 7% this AM. The ruling center left/right party got only 32% of the vote.

• Most troubling for stocks short term is the rise of far right (pro nationalist) and left groups who are opposed to the sever austerity measures.

• Since 2008 when austerity measures first started Greece’s employment rate has exploded from 8% to 21%

.

.

How the Hell is a country

supposed to get the

revenue to pay its deb if you

increase unemployment

by over 160%

.

Massive Austerity

creates more problems

than it solves.

.

• Spanish 10 year Bond Rates [411 uses this as a critical measurement of European/world stock market stability] are remaining relatively stabile considering the news. Yield up to 5.81% at 6:00 AM – Not near 6.0% danger zone. So there is NO big panic.

• German market down 2% this AM.

• McCellan Oscillator [411 very successful technical tool in market direction - Tops/bottoms] fell to -27.97.  Range for last 6 months is -100 to +60.  MO in middle of range so lots of room for MO to move up or DOWN =  NEUTRAL

.

____________

.

Reading The Tea Leaves

.

..

From Friday – “Major Question remains

Can the US market Rally despite the problems

in just about every other major world market?

.

Answer in US stock market today

will probably be NO

.

.

The Cavalry/Fed/Central Banks

.

The long term stability trend

in Europe is worsening.

.

Who knows how extensive giant “too big to fail” banks are involved in the unregulated opaque derivatives market on European/Greek debt?

.

You can emphasis

balanced growth/jobs

or austerity

.

Austerity is leading to chaos

.

Too many times the can gets kicked down the road in Europe. Each deal on debt according to the voters is too structured in favor of banks or the holders of that debt.

Certainly a liquidity injection by our Fed would help. So would restructuring debt and providing jobs. Who knows how far too big to fail banks can bend? Who knows how far the opaque derivatives market is over leveraged?

.

*************************

.

Paul’s Corner

.

.

Short Paul’s Corner today, from posts I made this weekend in the comments section for your review:

Your Stock List week one results: LINK

– Steve Gerritz’s Blog:

The rally that began on Dec.19th 2011 has run out of steam. The market is now going sideways in a very choppy manner.

http://stephengerritz.blogspot.com/2012/05/daily-market-snapshot-05-04-2012.html?

- Ron Brown’s weekend video market report:

The NASDAQ was down 2.25% yesterday, but it not yet broken support at

the 2950 level.  Until support is broken at the close, a lower high is

not in place. In spite of the negative day, there were some winners

among the Box Stocks.

Ron does good chart analysis on AAPL and points out a few new stocks to add to the watch list.

LINK

- I often suggest reading Ian Woodward’s latest blog.  Ian posted a doozie this weekend.  He hands you the nuts and bolts of where this market is, where it may be going and what you need to watch for. This is one of Ian’s best and it’s brought to you in living color with every bit of wit and wisdom Ian has to offer.

If you are the least bit serious about your grandchildren’s inheritance this is required reading!

LINK

All of the above for education only!

.

History will Repeat Itself

Unless we learn from it

.

Austerity in a weak Economy

is Devastating-

.

Japan

.

.

Almost two decades ago Japan’s rising economy was the envy of the world

Then, they went into recession and introduced austerity measures.

The end result was a stagnant Japanese economy with a Debt to GDP ratio of well over 200%

.

Yale’ Economist

Robert Schiller

(pg. 84 Money magazine)

.

“Fiscal austerity to reduce debt can backfire -as has been the case in debt laden Japan.”

.

Aside – How does Japan manage an ugly Debt to GDP ratio well over twice ours? Low Low Low Treasury bond rates.  We do the same with our Low Rates. Their rate for the 10 year bond is under 1%, ours under 2%

.

__________

.

England Hits Recession

Another Austerity Mistake

.

.

Headline Daily Mail

.

“The first double dip for 37 years…

Britain endures

longest downturn for a century”

..

Now besides Europe waking up to the fact,  austerity doesn’t work we have England as the latest example.

Even countries like Spain and Ireland who had budget surpluses before the 2008 meltdown are now in deep trouble after introducing austerity measures. (See STOCK Section below on downgrade of Spanish bonds)

.

____________

.

.

The Primal Scream

.

Investors411 is just one small blog

that’s been right about

this again and again and again

..

“Of course we must eventually deal with the deficit.  But the example of Britain and Europe show that austerity in the midst of a jobs crisis is a form of insanity.

.

It ultimately makes deficits worse and leads to economic stagnation and double dip recessions.”

.

Quote from Must Read

Editorial

by John Atcheson

.

“Splitting the Difference Between Myth

.

and Reality Is Not Good Economics

.

Told You So -

The UK’s Double Dip Recession and Ours”

*******************

.

STOCKS

.

.

• Spanish Bonds rose SIGNIFICANTLY this AM near 6.00% danger zone. Rate at at 5.96% at 6:45 AM EDT Latest update on Spanish bond rates for traders HERE

• Despite austerity Program in Spain Spanish Bonds were downgraded two levels Story Here

• Two trends – Bad news – US economy keeps deteriorating at a slight rate. Good News - Earnings report are outstanding for US companies.

.

Reading Tea Leaves

.

.

Simply Put – The massive gains in stocks over the last three years is NOT trickling down into the US economy in a Significant way. The rich are getting richer as working middle class Americans stagnate.

Any stock move significantly higher is predicated on the Fed continuing some kind of liquidity dump. The latest liquidity injection “Operation Twist” ends in June.

.

************************

.

Your Stock List

.

.

Today’s the last day to submit your favorite stocks

to be on YOUR stock List starting May 1st.

.

List your choices in the comments section

or email them to me.

“Applauding Death”

The Onion

A quote from The Onion has created a massive controversy.

The words “Jon Huntsman Onion” have 453 references asking about the validity of the quote and article, including the first one from ABC news.

Many thanks to RF who often updates us with the Borowitz Report. The “Huntsman quote” below -

“When I saw the numbers and realized Republicans weren’t embracing my message, I breathed easily for the first time in months…They’re terrifying. We’re talking about people who blame the unemployed for their own predicament and literally applaud the idea of letting those who don’t have health insurance die. What would it say about me if they gravitated toward me personally or approved of my political principles?“

The Reality

In the  America I grew up in you cared about your neighbor, community and country.

Today we sanctify greed.

Instead of shared self sacrifice, that person in the voting both could really “blame the unemployed for their own predicament and literally applaud the idea of letting those who don’t have health insurance die.”

The facts on health care aren’t a parody.

We live in the richest country in the world. A country where the 400 wealthiest people have as much wealth as the poorest 150,000,000 Americans or 80% of households.

The Organization for Co-Operation and Development OEDC is 34 nations banded together to promote just what their title says.

Their 2011 Report based on 2005 data show the USA with  far more expensive health care system and we narrowly edge out one other country for dead last in life expectancy. Just like the previous UN study.

LINK To Charts and editorial

********************

STOCKS

The Bulls are Back

The Cute white bear cub no longer leads the Stock Section of Investors411.

The short term bearish trend could not hold on

China leads and they are going to be around for a while. While US markets have moved @ +20% off their early Oct. lows China has moved @ +40% [FXI] FXI -ETF for 25 Chinese stocks – is on the verge of a breakout.

Yeah, Europe still matters, but China alone counts for 25% of worldwide growth.

“Wall Street Profits at Record Levels So Why Aren’t Stocks?” CNBC - CNBC sanctifies greed, so another headline might read “Wall Street Profits are Back So Why Isn’t Employment?”

Stocks rallied into the close on some pretty bad Euro/Italy bond data. Rallies in good news put the bulls back in charge – at least for the short term.

Our two forecasting tools remain in NEUTRAL – So there is plenty o room for a move either way.

• A rising MO 50DMA , what we have now, usually correlates with a bull run. The relatively rapid rise in the MO’s 50DMA (below 0 to +25) is almost always associated with a longer rally

” 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.

_____________

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

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.

________________

.

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

________________

.

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.

___________________

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)

.

_________________

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.”

—

Disaster Capitalism

2008′s Economic shadow bank meltdown was a chance for American based companies to shed US workers and hire new cheaper labor in the emerging markets.  This might be termed a form of “Disaster Capitalism.” Great for emerging markets, but obviously harmful to American working class.

“Disaster Capitalism” is a term used by Naomi Kline in her controversial book The Shock Doctrine. In its essence, for our current situation it is about how large American companies/wealthy individuals have used the 2008 meltdown to transfer additional American jobs and economic resources to emerging markets.

Bottom Line – You, fortunately, lived through an era where America dominated economically. Within a decade this will no longer be true as globalization is stampeding throughout the world. We are experiencing that shift now.

—

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

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

US Stock Markets -

Rally on below average volume (volume is also down @ 30% from year before) Bad news Friday was no obstacle to rising stocks. Employment numbers, an enforced foreclosure halt, and warning by somewhat important tech company NVLS did not hinder a rally. This is a bullish sign

Flat jobless rate means little to most US stocks.  Of course if unemployment were to increase this might hurt stocks. This is doubtfull since the Obama stimulus plan added from 1.7 million to 3.3 million jobs according to non parisan C.B.O. Globalized US equities are no longer dependent on the US maintaining a robust GDP. In a globalized world the growth of emerging markets like Brazil, India China etc. is what’s keeping stocks afloat.

Fundamental Outlook – “The concept of a double-dip recession has been replaced with slow and steady improvement, and even if we don’t get it, we have a Federal Reserve that’s ready to step in and support the rally,” said Art Hogan, chief market analyst at Jeffery’s.

This is basically the view Investors411 has had since we upgraded the long term outlook from NEUTRAL to CAUTIOUSLY BULLISH.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar fell -0.26% Friday. Since last report down over 0.50% For stocks falling dollar trend is = Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rose +1.28% Friday  An 8 week bull run, then a two week fall. After short consolidation, looks like bulls are back.  = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Rose to to +21.47. Still lots of room to move higher or lower. Location= NEUTRAL

Reading Tea Leaves

Same short term outlook holds – “Still lots of room for bulls to move higher before overbought on MO. Still lots of room for dollar lower before it reaches a a major support level.“

From Wednesday – “Sure looks like we have a runaway bull market. SPX at 1161 with 1221 as this year’s high and major resistance level”. S&P 500 now at 1165.

The Market manipulators should buy the dip till we reach major support for the dollar, or resistance for the S&P 500. The dollar is the still key index to watch.

Earnings Season blooms this week. – If we do get a continued set of bad earnings forecasts then this would trump the above outlook

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)

• EWS (Singapore)
• USO (price of oil/commodity).
• SSO (2x what S&P does)

Looking to add emerging markets or Gold on dips.

Check out Paul R’s always useful updates on individual stocks and sectors in the comments sections.

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

-

Jobs, Jobs, Jobs

Ever since the 2008 meltdown Investors411 has stated financial and economic conditions are “far far far far far bigger than first imagined.” This statement that has been made many times and is still bolded in the position section of the blog.

Poll after poll (except among Tea Party supporters) have said “To Hell with the Deficit, Its Job, Jobs, Jobs.“ See yesterday’s Investors411 for  a list of historians and economists who make the same case less colorful language.

Immediate Help

• Extend unemployment benefits its “the human thing to do.” Republican Billionaire Mort Zukerman
• Extend unemployment because (the average American unemployment check was under $300 a week in 2009) it will stimulate the economy. These people will SPEND the money and we all benefit because money flows.
• Republican’s know that the longer they can delay a vote on this the less money will flow and consequently the more people unemployment will grow before the November elections. Every day they delay = the more votes they get in November, because they can blame Obama for unemployment.
• It’s certainly hypocritical to endorse the Bush tax cuts on the wealthy. Next vote for unnessesary war funding outside the budget for over 10 years. Then play politics because our own American families of former workers are going hungry.

Longer Term Help

• Infrastructure projects get you the most bang for the buck according to Mort Zukerman (who I usually don’t agree with) and most economists.
• We need an Independent Infrastructure Bank Not one where a powerful Senator like Democrat Harry Reid can take $350 million for a high speed train from LA to his home state of (Los Vegas)Nevada.

Bottom Line – Andy Grove, Intel’s CEO had it right – Globalization has created a major “scaling” problem in the USA. Unless we somehow change that direction the ultimate result is going to be very negative economically for the USA.

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

The High Frequency/Black Box traders (that are focused on the here and now) pushed the markets higher in weak trading. This has been the typical headline for many moons in what’s been a falling market since April. – Lower price highs and lower lows.

IBM was the earnings report of most interest and its down @-4% in pre market trading = Bearish

APPL – Both Monitor and Paul R have warned about today’s earnings report at close.

YOU have pretty much reached consensus that holding a stock, especially in a declining economic environment, is highly risky before its earning report. If you are an insane lover of risk (short term trader) and AAPL continues to drop before earnings – it does take some of the downside risk away.

Ruptured oil well leaking again and possible leaks on oil on ocean floor related to BP oil spill. Best site for this is The Oil Drum = Bearish

Significant Indexes-

• McClellan Oscillator (MO) rose to +21.91 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. = NEUTRAL
• US Dollar –  The dollar Friday was basically flat +0.04% [Anything over +/- @0.50 is significant.] The dollar is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, have used the inverse relationship of the dollar as a key part of their trading system. Earning have trumped this indicator for now & we have consolidated for last two days. = NEUTRAL
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also good proxy of China.) BDI is in free fall from a high of @4200 to 1700 yesterday. This is a huge -60% drop 8 weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI rose for the first time in 8 weeks the BDI rose Friday & +0.70% yesterday. At long last the BDI finding a bottom - a bullish sign, but too early to tell.Fundamentally the -60% drop is very BEARISH

Reading Tea Leaves-

Don’t think the negative fundamentals of the BDI (Trade and China) & Europe have been fully integrated into stock prices yet. Sure fells like we are going to have a negative day. But, with Black boxes in control (almost everyone else has fled to safer investments of bonds and treasuries) – you never know.

Positions

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

Updated over weekends Investors411 holds ONE position at this time

From Yesterday – SH – The ETF that shorts the S&P 500 was bought at 51.45. It’s up over 3% now. 1/2 will be sold at 3% profit and a stop/loss has been put in place at what it was bought for. 1/2 of SH was sold for 53.02 for +3% profit.  Letting the rest ride and will sell when conditions on MO near oversold.

No other positions long or short are contemplated in immediate future because MO is neutral. Sorry, there is little to do but sit tight,  be happy you’re almost all in cash, and wait till we get oversold or overbought.

One exception is GLD or DGL (@200% GLD). Its dipping and if it falls to its 200 DMA – would consider buying on fundamentals.

Great Cartoon on al Qaeda

Sorry, I had trouble loading this “Troubletown” image by Lloyd Dangle

But here’s the LINK

“Mind Your Own Business”

Isolationism has returned to the USA.

49% of US residents believe “The US should mind its own business internationally and let other countries get along the best they can on their own,” according to a Pew Report. Up from 30% in 2002.  44% disagreed. UPI story – LINK

Headline from Pew – “U.S. Seen as Less Important, China as More Powerful
Isolationist Sentiment Surges to Four-Decade High.” The poll also has some significant opinions on what the Council of Foreign Affairs believes (Who is the CFA LINK )

LINK to Pew Poll .

US has just launched a major offensive attack with 1000 soldiers in Afghanistan. Local cable & networks has all the fireworks for those who still want to watch shock and awe.

Global Warming

Reality – Let’s for the sake of argument say the there is a 2% chance the scientists are wrong about Global Warming. So what?

The era of cheap energy is over. Natural resources are finite . The energy sources we use most are pollutants that also kill. Go breath the polluted coal dust in China’s air (slow death) or shut yourself in the garage with your car running (quick death)

It’s technologically wonderful that we can drill five miles beneath the ocean and then go horizontally to find oil and/or squeeze oil out of rock/shale.  But besides pollution this is also obviously dramatically more expensive in cost. We are also becoming more dependent on foreign supplies/dictators for energy. Therefore,  strategically,environmentally, and economically we need to diversify energy resources.   Stop being idiots and work to diversify energy sources.

KISS & STOCKS

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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, Fundamentals & Analysis

Dollar rose a wee bit and stocks fell. Looks like fear of bad jobs report spooked the markets.

Volume was way up on the Dow and significantly above the moving average for the S&P 500. Large volume on a moderate down day (less than 1%) is bearish . Perhaps this is a whole lot of traders expecting bad numbers for the jobs report.

Jobs # for Novembe r

Headline -  10.0% Unemployment . HUGE POSITIVE SURPRISE Unemployment number drops from 10.2% in Oct. Job loss is -11,000 jobs , (5 digits not 6) and the revisions of past two months way down. Oct. down from -190,000 to -110,000. Sept. down -80,000 too. The non farm payroll decline is greatest since Dec. 2007

These numbers are too good.

Now going to get a bit more technical

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

——–

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 rose +144 points yesterday and closed at 4062. Technically  the BDI broke out through its major resistance level 4291 (this year’s high) over a week ago.  The BDI has rallied about 1800 points since late September. After 16 up days in a row, 9 down days in a row & now up 2 days in a row. Multi day moves in one direction are common

What it means – Long term we created a higher high on the chart = Bullish. The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets. After, what looks like a technical correction we are agin moving higher.

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The Dollar is currently the #1 forecasting tool .

$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  +0.08% yesterday . Anything close to or over +/- 0.50 is significant  The dollar closed at $74.71 . 

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$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at +4.82 This is a Neutral Position . This chart is showing we seemed to have reached a plateau. It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 .  There has been no clear buy or sell signal for over a month,. Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell

The closer we get to +/- 60 the better our chances of making money with a shorter term buy/sell signal

Positions

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

This section need to be updated – Sold 8% (24 to 16 % position in portfolio) of FXI and all of DGP. Taking profits was a mistake and bought back all of DGP (Double gold) & 1/2 of FXI.  This all happened because yours truly got spooked over the Dubai crisis.

Recommended ETF’s and Trades

DGP – Investors411 once again sold all of the DGP (2x what gold does)position at 32.7 yesterday. (see yesterday’s Investors411 – danger of going parabolic)  About a week ago I sold  DGP for a +6% gain. This time it was only a +3% gain. Still holding onto some GLD and expect a pull back.  We have NOT had a big parabolic move higher, but perhaps a small one and are definitely over extended. Gold is going to drop like a stone today because of jobs report (see yesterday’s update) The DGP play is only for traders and short term investors.

NVS – Tightened the stop on NVS to @ 5% below where it is now.

AMZN – Perhaps it was a mistake to hold onto this stock into the jobs report, but we still have 1/2 position if this stock. It’s up almost 20%, but due for a pullback.  Again any stock investment or ETF that doubles or triples what a normal ETF does is a short term play for traders and short term investors – NOT long term Investors .

Long Term Outlook = CAUTIOUSLY BULLISH

Iran

What was supposed to be demonstrations marking the 29th anniversary of the Iranian revolution turned into a night and day that members of the Green Revolution let their voices ring out. Professor Juan Cole’s website has details and video. Its heatening to see so many protest (“huge crowds”) despite those that have disappeared into Ahmadinejad’s Iranian prison system. LINK

Vietnam & Iraq/Afghanistan – Optimism

Even though many including this blog have focused on the negatives surrounding the “unjustified” invasion of Iraq and long term consequences,there are some major reason for long term optimism.

In Vietnam we used chemical weapons (agent orange) carpet bombing and even resistance was slow to organize. These weapons were not used in Iraq. Democracy was insisted on by Sistani (the #1 Shia religious leaders) and after a year of demonstrations the US relented. In Afghanistan the poll numbers have already turned negative LINK This poll was before the election debacle.

In no way does this excuse our growing nation building disaster in the Mideast under Bush and Obama. But, it is a long term ray of sunlight in an otherwise dark cloud.

US Elections

Republicans won two governorships in NJ and VA formerly held by Dems. The Dems won a congressional seat in NY – formerly heavy Republican district.  Overall a better night for Republicans and bottom line is about the economy.  Three out of mainstream observations

• NJ Democrat Gov. candidate was a mucky muck at Goldman Sachs.  GS & Wall Street are loved about as much on Main Street as the New York Yankees outside NY metro area.
• The “conservative” running in NY congressional race considered radical right wing FOX commentator Glenn Beck “his hero.”  He had huge support from the “tea bagger” or dominant wing of the Republican party.
• Long time incumbents spent huge money and had difficulty getting elected – example mayors Bloomberg in NYC and Menino in Boston.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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, Fundamentals & Analysis

This is the last post for the week

Friday’s jobs report is the news for the week .  What we have is an oversold market going nowhere. Wall Street term for this is “churning.” Because we are so oversold a good jobs number (loss less than 200,000) would probably move market higher.  Oversold also limits downside risk.

Best Read of Tea Leaves – We will not get a sub 200,000 number.

For traders – A high unemployment figure means the stimulus will keep flowing  and I’d buy the dip. Even though everyone is watching Friday’s employment figure – keep an eye on the dollar. If we have a significant break through of the resistance level expect a meltdown in stocks as the dollar rises.

In Asia and Europe oversold markets rallied last night, so this could carry a positive bias to the USA today.

FOMC meets to day – expect no change.  Any changes in wording would be negative and a shock.

The Dollar War - (Part 2) The big news of the day was India buying $6.7 billion dollars worth of gold from the International Monetary Fund. This is an investment in gold not dollars. Still, obviously central banks did buy enough dollars to halt any dollar decline yesterday.

FYI - Best 25 preforming stocks since Obama’s election LINK

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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 @ 24% 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 a significant +62 points yesterday and closed at 3247. The rate of change is diminishing slightly. A higher high price on its chart pattern has been confirmed The BDI has rallied almost 1100 points since late September. =  Bullish for stocks & world trade right now

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The Dollar is currently the #1 forecasting tool .

$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 a modest -0.12% yesterday. The dollar closed at $76.33 . The dollar did briefly rise above its 50 day moving average.  The dollar is technically doing what prices do in front of major resistance/support levels – hesitating. The longer it hesitates the better the chances for reversal.

From yesterday – The next important resistance level for the dollar is the falling 50 day moving average (blue line on chart). This is at $76.67 this AM . So dollar is only 0.34% away from major resistance. It’s the line in the sand – Best read of the tea leaves is that it will hold. In fact, Investors411 will add to some positions  as we get close to this resistance level.

Positions

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

Our major core positions into weekend. (See Monitor’s post in comments section)

NB  – These core positions have been long term positions for years and are STILL OUTPERFORMING the benchmark S&P 500 – For more see overview section

GLD – Gold rose a significant 2.41% and broke out to a new all time high in huge volume. This was based on the news of India buying a huge hunk of the shinny yellow stuff. (buy the dip)

EWZ – Brazil – has gone up too far too fast and was overdue for a correction. (see past updates)It had about a 10% correction (see chart) and its 50 day moving average is acting as strong support.  Think those of you who bought the dip will be rewarded in the long run.

FXI – China -  too recetly had almost had a 10% correction, another buy the dip opportunity.

Both China and Brazil could go lower if the jobs number is bad or the dollar rises too high. They go down faster than US markets, but rise much faster than US markets. The BDI recent move higher is favorable for both.

Considering diversifying into Indonesia & Vietnam ETF’s Also, for traders as an individual stock AMZN – great technicals& fundamentals, but also a swine flu play. If the flu ends up keeping folks housebound AMZN should profit. (more on Monday) It is currently dipping.

Concerns – 10 even 20% corrections are healthy for FXI and EWZ in the long term. Yes, these and other emmerging markets are recovering fundamentally far faster than the USA. But anything that goes up to too fast forms a bubble and they burst.

SPX – Selling entire position as soonas I get back from art show – taking profits and freeing $ for other investments.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Poverty Grows in 2008

Another 1.5 million people entered poverty in the world’s richest country last year. A total of 12.7% of the population. Obviously this number will increase in 2009. LINK The amount of poverty in this country keeps growing. Once we all hung together and the middle class grew. Perhaps the single largest cause of growing poverty is the lack of health care.

• Now we have 14,000 losing health care every day
• almost 50 million Americans are uninsured
• the costs of those insured is going up at an annualized rate 8% every year
• every 30 seconds an American declares bankruptcy because of heath care
• an army of insurance agents looking for ways to deny coverage to those who have it.

Linking Physical Strength, Intimidation and Anger

photo – Kremlin/ Presidential Press Information Office

The headline tells it all and this research group uses Vladimir Putin (Russia’s most powerful man) as the prime example. The Miller-McCune group turns research into solution so both the story and its sponsor are of interest. LINK

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

We recovered almost all of Monday’s losses, but in  weak below average volume . Volume was up just a wee bit. Therefore no confirmation of the price move either way

Significant forecasting tools/Indexes for stock markets

BDI - The Baltic Dry Index measures the flow of goods (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern .  The BDI fell -70 points two days ago and -90 yesterday. We are about to form another lower low. The mid term trend since early July is clearly bearish, with a series of lower lows and lower highs.

In a nut shell the BDI is

• short term - Bearish pattern
  
• mid term -  Bearish pattern
• long term - Bullish pattern

Bottom Line – This is NOT looking good . While we are still a long way off from major support levels but the mid term (since June) bearish trend is growing. T he case for trade barriers between nations and a growing worldwide recession is getting stronger.

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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.

The dollar fell -0.60% yesterday and, you guessed it, stocks rallied. The Dollar is in a range between $79.5 and $77.5 . A breakout to either side will seriously impact stocks. Dollar at $78.52

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

A gradual reduction in the price of the dollar is part of the solution to global worldwide recession

This is the index to watch because its impact is immediate.

Positions

The whole Positions Section has been revised (Click on "Positions" at top of blog). Check it out

Still have not had a chance to revise Positions section of blog.  Buying on dips – Smaller positions in FXI (China) & EWZ (Brazil) have been added to. Also an SPX (S&P 500) position has begun to be built on dips .

• Considering selling the smaller amount of China stock recently added at a loss and a small amount of longer term position on China.
• Considering Going back into US financials  as a longer term play on dips – If Dems & Obama are going to do nothing to regulate these massive (too big to fail) institutions and continue to throw cash at them – They will continue to make $$$$$.
• This is shaping up to be at least a 5 to 10% correction.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!