Income Inequality

(sorry see Link below for chart)

The chart shows the growing gap between the top 1% (pink color) and the other 99% between 1917 and 2008 in the USA.

Chart from Henry Bloget at Business Insider also points out the significant rise of the wealth gap between 1981 and 2008 of the 1% vs. the 99%. Original data from Pro. E Saez UC Berkeley.

Kudos to Paul for turning us on to Business Insider.

Too see all the full sized charts - LINK

Download the charts, Post them on Facebook, send them to your friends, and/or drop some off at your local “Occupy ——” protest site.

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Stocks

What was hopefully supposed to be a confirmation day (= prices hold on to most of their gains from previous day) of a major breakout turned into a meltdown of broken eggs.

China’s GDP numbers last night – Headline – 9.1% Down from 9.5% and less than expected 9.3% Heng Seng (China’s stock market) down -4.3%

Bunches of earnings reports. IBM fell after its report yesterday and Goldman’s reports a HUGE loss.

• Our primary forecasting tool, the McCellan Oscillator fell dramatically to +37.84 (moderately overbought = NEUTRAL/Bearish
• Our secondary forecasting tool, the Put Call Ratio, rose to 1.18 = NEUTRAL
• For more on these two indexes click on STRATEGY section on top of page.

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Reading Tea Leaves

Mea Culpa - I was far less aggressive with my Short the market call than I should have been yesterday. “Because of the OMG MO – Short term traders may be successful in shorting rallies.” but I also stated “there is no clear buy of sell signal”

For longer term Investors - There is no buy or sell signal unless we had a confirmation day. Yesterday was supposed to be that confirmation of a price breakout from its trading range. It got crushed. Therefore no upgrade to CAUTIOUSLY BULLISH and no clear buy or sell signal.

For short term traders - Again my bad the MO has worked - “Over the last 3 years the MO at OMG levels has always meant at least a 5% decline over the next week to month.” This should have been a RISK ON trade yesterday instead of “Because of the OMG MO – Short term traders may be successful in shorting rallies.”

Today – Reading Tea Leaves - Expect at least a 5% decline from highs.

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Paul’s Corner

It’s 7:30 AM Tuesday and Barr is waiting for my email with today’s words of wisdom from Paul’s Corner. Let’s see what should I write? The dollar is up, more news from Europe, markets sold off yesterday, China’s GDP fell for the third straight quarter, ain’t nothing new here folks, same old stuff we have seen for the past few months and the market hasn’t changed, so do we really need a new Paul’s corner for today? Maybe I’ll just copy and paste last week’s edition, things haven’t changed.

Ok since I’m being lazy here what does Dave Steckler have to say? From his blog last evening:

Well, it was nice while it lasted. Last week’s action sent the equity indexes up 5% or so but today the Dow Industrials fell almost 247 points to close at 11,397.68. Volume was below average.  The S&P 500 Index dropped 1.94% and the Nasdaq Composite shed 1.98%.

Germany shooting down hopes for a quick fix to Europe’s debt crisis was blamed for the sell-off today but as we’ll see, the charts show it was not unexpected.  Oil and gold/silver prices all fell but Treasuries gained strength as prices rose and yields fell.  The U.S. Dollar rose.

Read  Dave’s full blog, Link

Well Dave that sounds like last week’s blog and the previous weeks blog, so hum, it sounds like we are  stuck in this nasty sideways trading range.

How about Ron Brown’s morning report?

At this point, it is a one day pullback on light volume.  The shift to the downside was dramatic for the Force Indexes and the % shift down for the small caps.  The VXX shot up over 10% which shows just how nervous this market is.

The NASDAQ fell back into the trading range and gave up 2%.  I’ll be watching tomorrow to see if this was just a slight pullback, or if the market fall back further into the trading range.  If selling continues on heavier volume, that will be a signal that the market is probably heading lower.

Gee whiz same here, just more of the same stuff we have seen for months now. But wait, notice both Dave and Ron suggested light volume on yesterday’s sell off,  this is good. Just maybe the market has reached equilibrium. Just  maybe.

I can’t add much to what the masters of market analysis have said other than I did order a hamburger with out cheese at the local diner last evening and it came as ordered, no cheese! So just maybe this market is finally getting ready  to go. If you care to play, be careful with your capital, your grandchildren are counting on you for not screwing up with their inheritance.

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Investors411 LONG Term Investments

Each day Paul (change setting from profile to activity) offers up to the minute commentary on the markets & YSL #5 in the Comment section of the blog. Catch his Paul’s Corner every Tuesday and Thursday.

Our Hedge Investment - Theory – Technology will do better than financial sector over time. Thus hedge is set to hopefully work well in both up and down markets.

• Short Financials – Investors411 will use ultra short SKF (opened at 78.91 – now at 76.51).
• Long Technology - Investors411 will use ultra long QQQ (tech’s) QLD (opened at 81.13 – now at 86.55)
• @ a 2+ % gain on this trade so far

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Long Term Outlook

3 to 6+ months

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

CHECK ALL DATA, I MAKE MORE THAN GRAMER ERRORS.

• HFT’s Investors411 uses a broad definition of HFT’s to include all programed trading using computer algorithms.  Here’s an old 2009 Jon Stewart parody on HFT’ that is informative and fun.

Shanghai Traffic at Night

SHIBOR

What the Hell is SHIBOR and why should I care.

Perhaps some of you know what LIBOR is because it directly tied to your mortgage rate or home equity loan. SHIBOR = Shanghai International Offered Rate. This is the standard interest rate Chinese banks offer each other.

Here’s the problem – China is the White Knight – that is supposed to come to the rescue of everything from European debt to the future growth of the world’s economy.  American companies are counting on China for cheap labor and future customers. – Here’s the problem almost no one is talking about –  Interest rates in China have significantly increased in the last week, few days.

The source I referenced above is often over the top and glorifies Ron Paul. But I think they have a point. Their headlining a blip to 9% rates today. That number is accurate according to the SHIBOR main web site.  I can’t find many major financial sources as alarmed as the original source. However I know China’s interest rate hikes this year are a major major concern for every investor. [Google "China Rate Hikes"]

Bottom Line - This is yet another reason to say - its NOT a time to have unprotected long assets. When China’s interest rates become a topic on financial channels markets will melt down quickly

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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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Index	Percentage	Volume
Dow	-0.66	Down
NASDQ	-0.67	Down
S&P 500	-0.65	Down
Russell 2000	-0.81	-

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Technicals, Fundamentals & Analysis

• The McClellan Oscillator (MO) chart fell to +15.35 ( below -30 = somewhat overbought, above +30 somewhat overbought ) From yesterday – The MO has been unable to get above the +30 to +50 range for 6 months. So it sure looks like our four day rally will run out of room very soon. There is a series of lower highs on the MO chart that s very bearish in the long term. MO right now = Neutral

• $USD The Dollar rose  +o.34% 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 For stocks short term trend = Neural

• Reading The Tea Leaves - Shorter term – From yesterday –  ”MO shows we’re technically entering overbought territory. Advantage bears. Can’t help thinking all those put positions were the reason for the rally. Now that the # of Puts is back to normal, we are close to overbought, and only a week and 1/2 of Fed money remains to juice stocks the bears case should gather momentum.” MO now neutral, and momentum with bears.

• Reading The Tea Leaves - Longer Term - No change – See May 20th blog.

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Paul’s Corner

Your Stock List

Your Stock List 4 certainly took it lumps with the end of the bull run that we enjoyed since last September. Selecting stocks at the end stages of a  bull run is often difficult and your chances of making money is slim.  It’s time to retire this beaten warrior and start researching a new “Your Stock List”

[Editors note - See/LINK to POSITIONS Section of Blog (scroll down to bottom) for May 20th recommendations on YSL and the list of stocks]

Kindly make your suggestions to Barr for review. CPHD and ABC should remain from YSL 4 so we need 12 to 14 new stocks for the list.

HGSI screens have produced an interesting list of quality growth stocks that have ignored this correction. For your review, a few charts with excellent credentials.

SBH – Sally Beauty Holdings, Inc., together with its subsidiaries, engages in the distribution and retail of professional beauty supplies. The company operates in two segments, Sally Beauty Supply and Beauty Systems Group.

UA – Under Armour, Inc. develops, markets, and distributes performance apparel, footwear, and accessories for men, women, and youth primarily in the United States, Canada, and internationally.

HOC – Holly Corporation, together with its subsidiaries, operates as a petroleum refiner in the United States. It produces light products, such as gasoline, diesel fuel, jet fuel, specialty lubricant products, specialty and modified asphalt, liquid petroleum gas (LPG), carbon black oil, and gas oil/intermediates

CRS – Carpenter Technology Corporation engages in the manufacture, fabrication, and distribution of specialty metals primarily in the United States, Europe, the Asia Pacific, Mexico, and Canada.

TUP- Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products.

HS – HealthSpring, Inc., through its subsidiaries, operates as a managed care organization in the United States. It focuses primarily on Medicare, the federal government sponsored health insurance program for the U. S. citizens aged 65 and older,

RBN -  Robbins & Myers, Inc., together with its subsidiaries, supplies engineered equipment and systems for various applications in energy, industrial, chemical, and pharmaceutical markets worldwide.

CROX - Crocs, Inc. and its subsidiaries engage in the design, development, manufacture, marketing, and distribution of footwear, apparel, and accessories for men, women, and children.

FOSL – Fossil, Inc. designs, develops, markets, and distributes fashion accessories worldwide. It offers a line of fashion watches under its proprietary brands, such as FOSSIL, MICHELE, RELIC, and ZODIAC; and through licensed brands, including ADIDAS, BURBERRY, DIESEL, DKNY, EMPORIO ARMANI, MARC BY MARC JACOBS, and MICHAEL KORS.

FTO – Frontier Oil Corporation, together with its subsidiaries, engages in refining crude oil and marketing refined petroleum products. It purchases crude oil to be refined and markets the refined petroleum products,

OME – Omega Protein Corporation processes, markets, and distributes fish meal and fish oil products in the United States. It produces and sells various protein and oil products derived from menhaden, a species of wild herring-like fish found along the Gulf of Mexico and Atlantic coasts. (Just added to the Russell 3000 index)

ZAGG – ZAGG Incorporated designs, manufactures, and distributes protective coverings, audio accessories, and power solutions for consumer electronic and hand-held devices.

Disclaimer, no buy or sell recommendation is made for any stock listed in this post. Understand?

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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. This stock  is up almost 5% since purchased and has a dividend of @ 13.5%

TZA – ETF that is 3 times short small cap stocks Sold remaining TZA near open at 38.30 for -5% loss. When you add in the rest of the recent TZA trades +8% & +4% total = @ +2%

Mea Culpa – Selling TZA yesterday was probably a big mistake.

From yesterday -The short term player in me wants to sell this position (futures are down so TZA will rally at open) and buy back in at a better point. The long term investor wants to hold onto this. I’m leaning short term. I’m influenced far too much by short term trading blogs and almost all of you want something to buy and hold. You’ve repeatedly told me you “have a life “ and don’t have time to watch things on daily basis.

Like many of you I believe in DIVERSITY. I have a portion of my portfolio in long term holdings (mostly dividend stocks) and have protected them by owning some ETF’s that short the markets SDS & TMZ. I have discussed this in the blog and with many of you that have my email address. SDS & TZA are insurance for potential price falls. I will continue to protect my long positions until further notice.

Investors has gone over Dividend Stocks over the past couple of months and when I have the time I’ll compile this and put it into one section and post it the POSITIONS Section ASAP.

Repeat Strategy remains

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

Disclosure - I own NLY, & TZA as well as a group of dividend stocks – 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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

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YOUR Stock List

Stock list #4 is here.

Paul and I have finally finished. The first three “YOUR Stock Lists” clobbered the benchmark S&P 500. See POSITIONS section of blog for the new list and past results. (scroll down)

Although results will be tabulated from today to some point 1 to 3+ months in the future, the worst thing you could do is enter all positions at once. Investors411 has a “buy the dip” strategy for trending stocks. All chosen stocks are in a positive bullish trend. Here’s  a list (some of these points are repeated in the POSITION Section) of some relevant points.

• A preferable time to enter  these stocks is when the MO is at or below -30 (see McClellan Index below) MO currently near zero, which is neutral.
• Don’t chase stocks that are too far above their 17 & 50 DMA. How to judge this is to look at how high the stock got above its 50DMA (blue line on chart) in the past six months and if its near or above those levels don’t buy. The same for 17DMA (green line on chart) Some stocks are over extended now some are not.
• The list of stocks is broad, but a bit heavy in technology.
• This list should out perform in a bull market but could underperform in a bear market relative to S&P 500.
• Its NOT a list of the top momentum growth stocks, but solid liquid growth stocks that have a diversity of proven bullish chart patterns and sectors. Its aggressive but, not too aggressive.
• It seems the major factor behind stock manipulation (Fed’s quantitative easing) is coming to an abrupt end on June 30th. Investors will be front running the removal of liquidity. In other words the will get out of Dodge ( the stock market) before the event occurs. So the risk is far greater in this stock list than others.

Most of these 14 stocks were chosen/submitted by YOU or are from the past YSL #3. Paul & I added a couple. Paul R often makes comments on YSL in the comments section of the blog. You can look there for more in depth analysis and filters on YSL #4.

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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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Index	Percentage	Volume
Dow	-0.72%	up
NASDQ	-0.50%	down
S&P 500	-0.74%	up
Russell 2000	-0.47%	-

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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 stock bubble. See Investors411 STRATEGY section for more

• Some entity manipulated a save at the close as stocks managed to cut 1/2 the losses.
• Even with oil crude oil rising another 2.50%, markets, thanks to the Fed tsunami of liquidity, fell only @0.50%
• Risks Abound, But S&P 500 Up Trend Still in Place – Excellent piece of analysis of our manipulated stock and other world markets by Richard Shaw
• The dollar is one of Investors411′s Forecasting tools . Traders ‘Short’ Dollar as Currency Loses Attraction Therefore, this editorial from the Financial Times is especially relevant.

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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] Dollar fell again. Its fallen 10 of last 14 days. This time -0.10% Friday . Oil prices now are by far the #1 forecasting index (see below) For stocks dollar short term trading pattern = Bullish
• McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] MO fell to  +2.35. Over the last three months the new parameters seems to be +/- 30 as an overbought/oversold level. MO Stocks outlook = Neutral

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Reading The Tea Leaves

From Friday – The McClellan Index has worked almost flawlessly over the past few months. Check out the chart above. Therefore, with the MO at+25, in the short term we are probably very near a top. Longer term trend is still with the bulls. – It was a short term top.

All eyes on oil prices. However manipulated US equities holding up pretty well despite higher oil prices.

I realize that many experts (who are far more experienced than me) see the markets moving lower. But, I still view the tsunami of liquidity provided by our Fed/Central Bank as being able to sustain the rally for now.  That’s been the case for months and I’m sticking with CAUTIOUSLY BULLISH till we have some technical evidence of stocks toasting.

Obviously as stated above its a bubble, but so far no clear sign that its about to burst. Declines can be swift and dramatic so be vigilant.

What to watch today

• USO - ETF for oil - Oil up = stocks down
• UUP - (Tracking ETF for dollar) Clear 2 month pattern of bears ruling Remember - The dollar is a contrarian indicator. Bad dollar = good stocks
• AAPL - Bounced off its 50 DMA support level. Back approaching new high

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Positions

A 5% trailing stop today on both REMX & RJA today.

5% trailing stop on UCO & UWM today.

Two active considerations today DGP & DBC.

One strategy of Investors411 is to take 5+% profits on 1/2 the position and let the rest ride.

Will post when I buy/sell in comments section of blog.

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.

DGP – (ETF is 2X gold) . Set to follow silver and approaching breakout. Broke out to new all time high and has started to pull back. Buy the dip to 17 DMA

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 - Both DBC & DJP are on breakout runs. Buy the dip to 17 DMA

RJA (Agriculture commodities Index)An ETN, not an ETF. Hopefully longer term holding. .

UWM (2x small cap stocks) TNA (3X small cap stocks)

Mea Culpa – Both DGP & DBC are on breakout runs and should have been bought earlier. Investors was all talk and never pulled the trigger on the trade. An obvious mistake.

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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.”

Fear

Each day two classrooms in the United States are emptied in the USA because these children are diagnosed with cancer.

Yet the brainwashing American media yesterday, from networks to blogs, focused on a “mentally ill, homeless and violent” man with guns and a bomb holding three hostages in Silver Springs MD.

Our culture has simple become conditions to over hype anything with guns, bombs and a potential terrorism because fear of terrorism sells politically and commercially. Your chances of dying from cancer, diabetes, heart attacks, or going brain dead from alzheimer are thousands of of times greater than a terrorist attack. Sure, we should be vigilant but we should also recognize reality.

Wikipedia reports that only 16% of the approximately 200,000 rapes a year in the USA are reported. How many classrooms are emptied because of the million women who get raped each year in the USA? Yet our American media growing trend is to focus on any potential terrorist related violence rather than rape.

Guess which country is #1 in the world in number of reported rapes so far this year?

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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!

Index	Percentage	Volume
Dow	+2.54%	?up
NASDQ	+2.97%	down
S&P	+2.95%	down
Russell 2000	+3.81%	-

Technicals, Fundamentals & Analysis

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

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

Quotes from yesterday - “Churning. “More often than not a big battle like yesterday between bulls & bears means a reversal in direction. In this case that would be a rally….Overall think the BB/HFT’s are setting up for a rally.

We had one big rally in slightly above average, but decreased volume. (sorry for  ”?up” above – couldn’t clearly read the NASDQ volume chart) This is your typical rally in a BB/HFT controlled market.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar, of course, fell  a whopping -0.82%.  Because the BB?/HFT are obsessed with the inverse dollar/stock relationship, you’d naturally expect a huge drop in one gets a huge rise in the other = Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rose +1.03% yesterday. After a 5 week rally the BDI has flattened out. Now starting to rise. = Neutral/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 +6.81 Now above Zero, & both 50 & 200DMA’s. Nowhere near +/- 60 so there is lots of wiggle room on each side, but momentum obviously with bulls. Therefore = NEUTRAL

Reading Tea Leaves

Monitor, a trader, in comments section of blog describes the MO forecasting tool best – “An observation – The McCellan Oscillator works!!!!! Plus or minus 60 seems to be a reasonable point where markets turn. If you like to take risks just go long or “buy the dip” when its under minus 40 and wait. Within a few weeks it will be at over 40 and sell”

It actually not all that cut and dry, but the general focus seems to be correct for a Long Term NEUTRAL market.

Mea Culpa - For long term investors there was a point over a week ago when the MO was below -60 & the Dow fell another 100 points which was a buy point.  Personally, as the record shows, I did buy some long positions TYH & SSO, but let the FEAR of loosing $ force me out of those positions with minor gains instead of holding onto those positions. My mistake.

Obviously another typical BB/HFT rally where short positions are forced to buy stocks to cover their positions. This gives added momentum to the rally.

September looks to be one roller coaster ride, now with an upside bias. There will be buying and selling points for both traders and investors. Stay tuned.

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

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

Positions

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

Current positions –  EWS (Singapore)

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Ronald Reagan:

The Great American Socialist

All of you made outstanding public comments on Friday’s blog from a must see video of the Tea Bagger’s to an excellent editorial by economist Ravi Batra – “Ronald Reagan: The Great American Socialist. ” The far right is calling Obama a socialist because he wants to “redistribute the wealth” yet Ronald Reagan by this definition can be credited for a huge redistribution of wealth.

• Reagan’s 1981 tax cut was massive especially for the wealthy and corporations. This ” large reductions in income tax rates in 1981 were followed by abnormally slow growth” Source Wikipedia
• The rate fell from 70% to 28% 1980 to 1988 for wealthiest Americans. Check out changes starting in 1980 (when Reagan took office) Great chart of tax rate of wealthiest individuals and tax rates from 1903 to 2003 at TruthandPolitics.org LINK
• Batra continues – “deficit soared from 2.5 percent of GDP to over 6 percent, alarming financial markets, sending interest rates sky high, and culminating in the worst recession since the 1930′s”
• Reagan was in trouble so he “looted” YOUR savings in the Social Security system. To fix the massive losses YOUR Social Security trust fund (taxes you paid) were now used to pay for programs, stop inflation, fix the recession by paying down the deficit.
• By 2007 this totaled “$3 trillion dollars ” (including 1+ trillion in interest we would have had) and is a major reason why Social Security is in such trouble. But the reality is the fund is empty and used now to reduce the deficit.
• In fact “In 1986, Reagan slashed the top tax rate further. His redistributionist obsession led to a perversity in the law. The wealthiest faced a 28 percent tax rate, while those with lower incomes faced a 33 percent rate; in addition, the bottom rate climbed from 11 percent to 15 percent.”

So now we have Heath care/public option and are afraid to tax the wealthiest individuals to pay for it. Those that benefit from Reagan and Bush tax cuts and have accumulated millions in compounded tax savings to protect themselves from the lack of funds in Social Security or heath care problems.  Those millions/billions have been amasses since 1981.

45,000 Americans die each year because they do not have health care (700,000 go bankrupt each year because of lack of decent health care-figures quoted on Bill Mahr HBO show) That’s equal to the deaths of 15 world trade center attacks . All this happens in the only civilized country in the world that makes a profit off of breast cancer, heart attacks, leukemia, aids etc…

Heath care is one component of this wealth distribution. It would redistribute more funds to lower and middle class families.

Special Note – The Investment philosophy of Investors411 continues to be invest in countries with a growing working class of people NOT a growing oligarchy of wealthy individuals. This is why the ETF chosen are focused on India, China, Brazil, South Korea and other area where money flows because middle classes and those aspiring to the middle class spend money.

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Mea Culpa – Many of you sent personal and public emails or talked with me about Friday’s editorial “Why You Should be Afraid for America” One of you stated this is not a headline you’d find in the NYT and suggested , this is a fearful  “tabloid headline”  He’s right. I am an emotional guy who spent part of his youth marching for civil right, against the Viet Nam war, and income equality from the deep south to the infamous 1968 Democratic convention in Chicago. The headline was designed to attract your attention and in my heart I’m fearful for America’s future. I’ll try to watch it but please allow for the occasional over the top headlines.

Thanks to Paul R who sent inthe Batra editorial and all those other who make the comments section perhaps the most exciting part of this blog.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0.42%	down
NASDQ	+0.24%	down
S&P500	-0.34%	down
Russell2000	-0.31%	-

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

Volume was way down and that’s just what bulls want to see on a mildly bearish day for the S&P 500 and the Dow. Considering how strong the dollar was it is surprising to see the markets fall so little. (see below) The NASDQ even gained ground.

The Dollar is still the key index to watch right now. The inverse correlation between the dollar and stocks dominates the US markets

Fed meets today and makes announcement tomorrow.

Fearless Forcast = Rally continues. this week.

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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) .

2388 is support level/number to watch – Yesterday BDI fell -33 to close at 2357. This is not a big fall, but a major support level has been broken. = Bearish for worldwide stocks.

The BDI is 44% off its high (early June) Before that it gained almost over 630% from its all time low of 663 (April high of 4291 )

What this means – World trade is in trouble – lots of ships are sitting in ports empty.  To some degree, China has stopped buying raw materials and/or the US consumer is not buying as rapidly as earlier in the year. Braking a support level is significant, but 2357 (current level) is still a long way from the Dec. 2008 663 low. = Storm clouds gathering

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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.

As predicted the $76 support level held.

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

The dollar rose +0.40% yesterday and guess which way most major US markets went – D__N.  ) 0.40 is a relatively large move up for the dollar.

Note that if you look at the longer term chart of the dollar that it has NOT been above its 50 day moving average since April.  The dollar is in a short,medium and long term BEAR market . Would buy stocks if the dollar got close to 50 day MA.

The two day rally in the dollar has also impacted oil prices that fell -3.53% yesterday. Right now this looks like a technical correction.

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

Individual stock – One of you last week has asked me about MVIS (Microvision) See chart This chip company has exploded and broke out of its trading pattern even though stocks have been down/flat the last few sessions.  Would buy this on any dip. There are a whole bunch of traders out there ready to do the same thing.

Our swine flue play NVS and tech play AAPL are out peforming US markets – but it looks like we are in for some minor correction as the dollar rises.

NB – I just offering these trades because you folks asked for something other than ETF’s – I do NOT know enough about the fundamentals and a zillion traders know more. Also,its far easier for major players to manipulate these stocks than ETF’s which are huge market baskets of stocks.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

WHAT’S UP? – Iran Day 7 – Kissinger, Kerry, Kahameni, Moussavi, Ahmadinejad, Obama Effect – Some conclusions – The “Supreme Leader” Reading the Stock Tea Leaves – low volume – The dollar & the Baltic Dry Index – plus more

IRAN Day 7

Friday demonstration -Photo Getty

• Perhaps biggest rally yet as “Day of Mourning” brings million+ to street yesterday. Story Link
  
• “Supreme Leader” Ayatollah Kahameni today called the elections fair Story Link
• The “Supreme Leader,” this is the name they use for their dictator, accused US, Britian, and Zionists of compicity incasting doub on the elections.
• Henry Kissinger endorses Obama’s hands off strategy “Anything he [Obama] says would handicap Mousavi “(opposition leader) This echo’s Senator Kerry “Think Before You Speak” editorial

Some Conclusions the Far Left and Far Right are NOT going to like to Hear.

• The focus has shifted. It’s no longer The American’s against he Muslim world (you’re either with us or against us) but between the conservatives and modernist in Islam.
  
• Ahmadinejad was created under the hard line Cheney/Bush approach to the Muslim world. The “Green Revolution” under the “Obama Effect”
• Lesson learned – All Muslim’s are not the same – Just like American there are there many different sides
• If the Ahmadinejad/Kahameni militant temporarilly win – remember they are the main supporters who encourage and support other violent terrorist groups like Hamas and Hezbolah.
  
• Look at what the Ahmadinejad/Kahameni militants do to their own people and think what they would do to you, Sunni Muslims, Israel, or any who do not follow their orthodoxy.
  
• These militants in Iran are more dangerous than “Supreme Leader” Kim in North Korea because they are religious miitants.
  

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index	Percentage %	Volume
Dow	+0.69%	down
NASDQ	-0.02 %	down
S&P500	+0.84%	down
Russell2000	+0.48 %	-

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Technicals & Fundamentals

Mea Culpa – Like many others I’ve been caught up in the events in Iran and not been doing due diligence on stocks and other issues. But still believe in basic conclusions listed this week. However,  the conclusions/forecasts have been pretty accurate starting Monday. See reading the tea leaves below.

Significant forecasting tools/Indexes for stock markets

Note - Repeated statements in brown

$USD – The dollar is the index to watch. The bottom line right now is – When the dollar goes down-stocks and oil prices go up and visa versa. Dollar went up +0.45%.   It looks like the dollar may be establishing a short term bullish pattern (see chart)  of higher highs and higher lows.  Too early to tell difinitively. However if you get another 1 to 2% rise inthe dollar the mantra of the last few months will probably reapear. Investors 411 mantra is Dollar rallies = Oil & Stock prices fall.

XLF - The ETF that tracks financials (mostly shadow banks ) have been stuck in consolidation for over 3 weeks. +2.41% in low volume. Financials are in danger of breaking down through a major support level. (see chart) They got a reprieve yesterday. Any breakdown would be bearish.

WTIC – Oil prices closed up +0.29% yesterday.

BDI - The Baltic Dry Index measures the flow of goods (world trade). 24 up days in a row, 6 down day in a row, & now a 6 day rally. But again yesterday the move higher was minimal and we have NOT reached the highs of 6 days ago.

We could be putting in a double top or a slightly lower high. This would be a longer term bearish sign if it occured.

Reading the Tea Leaves

The conclusions/forecasts have been pretty accurate starting Monday.

• Monday’s lead statement - Expect a tired low volume market to retreat this week .
• Low volume means indicates no bias toward bulls or bears.
• The low volume breakout has failed and we are back in the old consolidation area and, therefore back to NEUTRAL outlook.
• Strong support at @ 900 on the S&P 500. This has held for a couple days.
• The low volume indicates a technical correction of a market that went too high too fast.
• The possibility of this 4% correction turning into a 10% correction exists – still with low volume

The key two words are low volume . This shows little commitment my major players one way or the other.

The BDI and especially the Dollar are the indexes to watch. This is a technical correction, but volume is the key. Some unexpected bad economic news could turn volume around and put the bears and fundamentals in control.

In the Long term its hard to see the dollar move higher because fundamentally we are printing so much money and injecting a lot of stimulus intothe markets.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING