.

Stocks 2011

The economic outlook for the USA is no better than 2009 or 2010. Every time we learn more about the unregulated, over leveraged 2008 financial and housing meltdown the wore it gets.

The 3 dominant mega trends are still significantly impacting economics and stocks across the world. Investors411 has added a 4th – Lies/deception/opaque capitalism.  The 4th trend is growing in the world’s largest economy – the USA & ultimately will devastate economics if it continue.

The problems in the USA are both systemic and due to our dependence of unregulated, opaque, casino capitalism.

There are sectors, countries and asset classes that should do well in 2011. So here’s a rough list that I will  go over in detail tomorrow and Friday

• Gold
• US financials (I hate these bastards)
• Brazil, Norway & other energy rich countries
• Rare earth sector (from steel to solar materials)
• China’s wind and solar power industry
• Energy
• Even US major indexes should do well – as long as Fed supports them.

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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	+0.18%	up
NASDQ	-0.16%	up
S&P 500	+0.08%	flat
Russell 2000	-0.36%	-

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Technicals, Fundamentals & Analysis

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

• Markets were flat & volume abysmal
• Infamous AIG rocketed almost +10% higher Monday. Opened higher  and ended day with slight loss. AIG held almost all of 10% gain is Bullish for stock and shadow financials.
• Repeat – Weak trading means two entities dominate High Frequency Traders and the Fed.
• Double dip In Housing Prices is happening. – Roubini – Data seems to back up his conclusion that home values are on way down again.
• Decline in housing value is bad news economically for the economy & your house. But good news for stocks because it gives Fed more justification to keep quantitative easing and low interest rates going.
• Consumer confidence dips amid job worries

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Reading The Tea Leaves

Paul R stated last evening in comments section that “Looking at the charts and market internals again, things are NOT looking good. Market leaders are breaking down.”

He’s Right - Nothing has felt right about this overbought market. All the major indexes are over extended above their 50 day moving averages. Many of the momentum stocks are consolidating or heading down. This is also a strange holiday week & because of the ultra light volume so its hard to make a clear call.

AAPL is the big kahuna out there for stocks and especially technology. It’s not over bought. If you look at the chart you can see a pretty constant 6 week trend where Apple moves,let’s cal it one standard deviation higher than its rising 50 day moving average. APPL inched out to a new high yesterday. If Apple breaks down watch out!

Always remember – This market is being held up by artificial means – the Fed. That means when bad news occurs like housing prices dipped for 4th straight month & consumer confidence is falling – stock traders think the answer will be more quantitative easing by Fed. This doesn’t mean we can’t have a correction, but over 18+ months its shown there is support under stocks that make buying the dip successful.

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Positions

• #1 UWM - (2x small cap stocks ETF) – Sold 1/2  for +9% profit
• #2 UWM
• EUO – (double short the EURO currency)
• UCO – (double long oil) Bought Tuesday at  12.39 (this is a trade of short duration)

Below is rather technical and might make your eyes glass over. However, if you want to have the basic tools for investing I do strongly urge you go to Chart School (see below)

UCO - Trade -Reasoning –  This is NOT a trade I should have made in Investors411 because it breaks the basic strategy of buy the dip of a trending sector. My bad – several of you sent me personal emails on this and the following is my reply.

• To make any trades (as opposed to long term investments) you have to understand candlestick chart patterns,
• In fact, StockCharts – perhaps THE best FREE site on technical analysis has a who tutorial or school section.
• Almost All the links to charts at Investors411 are links to StockCharts.com charts from the $USD to the individual stocks listened on Your Stock List in the POSITIONS section of blog.
• Tom DeMark developed a 9 day momentum trading system that has nothing to do with Stockcharts, but to understand the system you have to know how to use candlestick charts.
• Here’s a good example of the DeMark system on ETF’s in video I did go over this on Dec. 1.
• I believe UCO is going to be a good long term investment because oil is likely to hit $100 or more. Historically oil prices go up as summer riving season approaches and emerging markets are demanding more oil.
• However oil prices are at a new yearly high and a long term investor (not trader) should buy the dip in UCO.
• What I saw was a half decent DeMark 9 trade. A breakout that had yet to run out of momentum. It had only 6 days of momentum from a low and I plan to get out on the 9th.
• This is not the best use of this system. Another reason I regret announcing the UCO trade.
• However I will hold onto UCO till day 9 and willing to take a 2% hit on the ETF. (I placed a 2% stop below the price I bought it for)

Bottom Line – there are a lot of trading systems out there. This is one of the better known. None of these systems is perfect. I just happened on this system over a decade ago and often use it for shorter term momentum trades. From DeMark’s Wikipedia listing “His timing techniques have become the industry’s standard.”

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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 for lists of potential stocks & ETF’s including ”YOUR Stock List.” (YSL)-

Is it time for Investors to put on their helmets and head to the bunkers?

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	-1.39%	up
NASDQ	-1.66%	up
S&P 500	-1.69%	up
Russell 2000	-2.72%	-

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. Paul R in the comments section has found a great source describing the BB/HFT traders and consequences of what they do.

Another increased above average sell off that has been typical of the BB/HFT controlled US indexes for many many moons.

Perhaps its time to bring  out the old  Lost in Space Robot with all its bells and whistles and scream DANGER WILL ROBINSON DANGER DANGER. This was the third big volume significant downside day in the last two months and that almost always means the worst is yet to come (The Hindenberg Omen?) But BB/HFT’s have made a mokery of this kind of technical analysis. So caution is in order but the Robot is peaking out of the closet.

Here’s what’s holding up US stocks (Clearly NOT the US economy which is deteriorating) – Emerging Markets

EEM the ETF for emerging markets was down about 1/2 of US indexes (-0.77%) How long can emerging markets can things to hold together in the USA (see Reading Tea Leaves)

Significant Indexes

• The Dollar (USD)  [Anything price move over +/- 0.50 is significant. Doll moves inversely to stocks] The dollar rose +0.27% yesterday.  Almost two week trend = Neutral
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rally +3.66% yesterday. 5 week trend = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO fell to -27.32 = Neutral

Reading Tea Leaves

The good – The 5 week rally in the BDI is a clear sign that emerging market growth is continuing. China’s ( the #1 emerging market) stimulus worked, but almost overheated their growth. They have come down into a more normal range and are becoming more self sufficient every day.

The Bad – Back in 2008 Investors411 stated – the economic mess was far, far far, far, far bigger than expected (best example financial sector & this statement is still posted in POSITIONS section of blog) Economic mega trends (see OVERVIEW section of blog) have started to fracture both the USA & Europe economically. Neither has an abundance of cheap oil (peak oil mega trend)

The Ugly – Obama’s stimulus plan & tax cuts have halted the fall, but the jobs are still going overseas because of globalization mega trend. More jobs will be lost as the will for more stimulus fades. It’s election time and even a $60 billion (may have figure wrong) aimed directly at small business (“the engine of jobs growth”) and formerly supported by many Republicans was filibustered by those same Republicans. Nothing will get done in the next two months.

Longer term - 10s of millions of new jobs are being created each year in emerging markets. Millions more are graduating from universities in these emerging markets. When a computer tech will work 12 hour shift in China for $0.75 an hour and the same tech in the USA costs $18.75  for an 8 hour shift, who is Apple going to hire? (I made up the figures)

Just finished writting this and I’ve talked myself into and even more bearish position.  So lets go with the kitty in a helmet

Positions

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

Current positions - EWZ & EWS sold 1/2 of EWS for 0.5% gain

Because of yesterday’s meltdown  held off on buying USO & will start with a smaller 2% stake in a dip today.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Heritage School House

Back To Basics

At the top of the Investors411 blog are 5 different categories [HOME PAGE, HELP/EDITOR, STRATEGY, POSITIONS   & OVERVIEW] These are designed to help you access more information and describe the basic viewpoint of this blog.

Investors411 follows mega trends and how they influence stocks, politics and your lives. See yesterday’s blog as an example of how megatrends influenced solving a 30% of GDP deficit after the World War 2 and how a different set are hindering a solution to our 10% of GDP deficit now.

The world of the stock market has changed. In 2008 Investors411 clearly stated that the financial meltdown would have a “far, far, far, far, far” bigger impact than expected. It obviously has and will continue to do so.

Here’s the Good News - The 2008 meltdown threw global trends for a loop. But over the course of the last two months, technically, the same country stock patterns have reappeared. Old favorites like EWZ, FXI, EWY (S. Korea – 21% of exports to China vs only 10% to USA) have and are outperforming the US indexes again. Check these out by using the charts at the side of blog.

Led by Paul R and others in the comment section lists of individual stocks that may benefit from these and other mega trends are published and commented on.  See Positions below.

What’s Different – The Black Box/High Frequency Traders BB/HFT control the vast majority of trades. (50 to 80% on a given day) The vast majority of these are day or swing trades. They are NOT focused on historical long term technical analysis because they are short term traders that can swing either way (long or short) In the end fundamentals will catch up with them, but remember “the markets can stay irrational longer than you can stay solvent.” (Wish I knew the author of that statement)

Here’s the Bad News – We haven’t fixed our opaque shadow bank financial system. Neither has Europe. We have enormous future problems that will create more debt – military spending, social security, medicare. We have a fractured, less transparent political system and a media that plays to fear mongering and bias. I’m sure YOU could add to this list, but let’s end with this. Emerging market countries are providing a greater chance for upward mobility for their citizens than 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!

Index	Percentage	Volume
Dow	+1.99%	down
NASDQ	+1.80%	down
S&P 500	+2.20%	down
Russell 2000	+1.67%	-

Technicals, Fundamentals & Analysis

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

Same Mantra for this week -The Black Box/High Frequency Traders BB/HFT control the vast majority of trades.

Stocks continue their Black Box rally in typically light, decreased volume.

The McCellan Oscillator – This is currently our #1 top forecasting toll for when the market will turn.

Significant Indexes-

• McClellan Oscillator (MO) rose  to +66.40 over the last few days [+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. Even though the MO is in overbought (sell) territory, but it reached over 90 a few days ago. It could easily reach 90+ again before consolidating or making a significant fall. = Neutral
• US Dollar –  The dollar  fell significantly -0.74% yesterday [Anything over +/- @0.50 is significant.] The dollar/stocks relationship is strong – Dollar up = stocks down and visa versa. Dollar  is in a two month long fall and is approaching a major support level. The fall = Bullish
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also, good proxy of China.) BDI was in free fall from a high of @4200 to 1700 . This was a huge -60% drop in 8 weeks is very bearish Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI has staged a two week rally and is up +17% rally and is at 1977. Rate of increase decreased yesterday. That’s not bullish, but the 17% rise is = Bullish

Reading Tea Leaves-

We’re back to Magic Monday’s where the BB/HFT take the markets higher in lower volume.  This means we could see a rally on Friday as traders hope for another magic Monday.  There is still wiggle room in the MO (90-66 = 24 points) for the markets to go higher before becoming too oversold they have to retreat. Remember these numbers are NOT exact and a rough approximations.

Positions

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

EWZ is the only long position at this time. Will sell 50% at 5% gain.

Sorry don’t have time  to go over these in depth, but they all seem to be worthy buy the dip candidates.(IMAX now questionable). But here’s YOUR Stock List (Mostly a list of the stocks YOU sent in) Both Paul & I have gone over these stocks. He has provided their earnings report dates of those that have not yet reported this quarter. Holding a stock into earnings is an obvious risk.

BIDU, AAPL, SNDK, PCLN (today), F, CREE (8/10), SAM (today), GMCR, HMIN (8/10), SWKS, RADS (8/5), SKX, VCI, UFS, IMAX, UPS.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Happy New Year

EWZ (Brazil) – Investors411 #1 holding up +117% this year

This issue of Investors411 is the beginning of a 3 part series on ETF’s, stocks & economic forecasts for 2010. It is designed to educate YOU on how to make the same kind of money others have by following some simple investment strategies that Investors 411 has used for years to beat almost all major US indexes for the last 5 years. But first a word about

Avatar and IMAX

I’ve now seen the movie and it is truly jaw dropping . Some of the genius belongs to Director James Cameron and the rest to the Imax (a publicly traded stock) theater technology. To quote Time magazine "Look around! Embrace the movie – surely the most vivid and persuasive creation of a fantasy world ever seen in the history of moving pictures – as a total sensory, sensuous, sensual experience. " It’s like The Wizard of OZ going from black and white to c o l o r .

The IMAX theater concept is an investment choice suggested by one of you.  Right now the stock (which was on our list of YOUR recommendations) is exploding higher (LINK to chart) in HUGE volume. I’m going to nibble on/invest in the first small dip.  It will be hard to top Avatar, but IMAX is the future of movies & 3D TV is on the way.

2010 Economic and Stock Forecasts

Part 1 Positions

For 2010 Investors 411 is going to keep its focus on basically 4  core positions that it has held, throughout most of the last five years. These are the ETF’s (Exchange Traded Funds). An ETF allows you to buy a market basket of stocks or an actual commodity for less than it costs to own a mutual fund and it gives you a better tax break because it trades less (buys/sells different stuff) than most all mutual funds. ETF’s also trade like stocks and have NO hidden fees.

The fundamentals behind the choices of these core positions are simple and  explained in greater depth the OVERVIEW section on the top of blog LINK These mega trends include-

• Globalization – The key force that is allowing some countries to develop faster than others.
• Peak Oil – The world has a limited supply of commodities  and we are running out. As we run out these commodities get more expensive.
• Share the Wealth – Countries that have growing middle classes expand faster that counties that have wealth oligarchies that hoard their money.

Over the years these Investors411 core positions have outperformed almost every major US stock index are-

• EWZ – Brazil
• FXI – China
• GLD – Gold
• EEM – Emerging markets

Especially this year Investors411 held a lot of related positions and some stocks. You can find a list of these at the POSITONS section on the top of the blog LINK (check these out NOW before they change for 2010)

Investors411 did stray too far from its core holding – partly because of the enormous swings in the market this year. Top gainer was EWZ held from the beginning of the year (8% of portfolio total holdings) gained +117% . The biggest loss was a STUPID hedge on China (FXI) position. It was made because of fears about the Swine Flu epidemic seriously impacting China. FXP and ETF that is a double short of basically the FXI. Translation – if Chinese stocks go down FXP goes up @ twice as much.  The short term FXP trade (2.5% of portfolio total) lost -13%

Several NEW position may/will be used in 2010

• MOO – Agriculture based ETF – Will outperform because the huge growing middle classes in especially China & India will eat better. Already opened a position here
• EDC – This is an ETF that does 3 times what emerging markets do. Lots of risk here so it will only be bought or sold under specific conditions involving the McClellan Oscillator (see below & more later)
• ROH & TYM – Technology. Again like EDC these two involve lots of risk because they do 2 and 3 times what tech stocks do. Only to be bought/sold under special circumstances and are short term trades. (see above)
• Commodities – There are many ETF’s that are solely based on a commodity like GLD and not based on a company. Diminishing resources and increased demand for these commodities make for a decent investment.
  
• Stocks – Because YOU asked for it some stock positions like IMAX will be suggested. (see last few Investors411)

Tomorrow Economics – The Good ,The Bad, The Ugly - 2010 Forecast

KISS & Stocks

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage	Volume
Dow	+0.03%	flat
NASDQ	+0.13%	up
S&P500	+0.02%	flat
Russell2000-	+0.04%	-

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

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

Technicals, Fundamentals & Analysis

Weak volume continues. Most technical analysts consider flat trading (stocks have gone basically nowhere for the last few days) after a trend (upward in this case) a sign  that the trend is revering itself (bearish).  The problem here is it is usually accompanied by strong volume.  All in all THIS IS A BORING WEEK for analysis on stocks. YAWN – Investors are waiting for the monthly employment report at end of next week.

Weekly jobless claims number at 8:30 came in better than expected  Weekly claims fall to lowest since 7/19/2008.

The McClellan Oscillator (see below) has wiggle room on the upside but is slightly overbought.

FEARLESS FORECAST – same as before "Up to flat week" – Historically this is an up period (Santa Clause rally) Even though we are entering overbought territory – hope of a positive employment report for Dec. & historical bullish factors should keep stocks on the up.

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

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Significant forecasting tools/Indexes for stock markets

The Dollar & the BDI have been temporarily eliminated. Right now how overbought we become is taking on more significance.

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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 +22.57 This is a slightly  Overbought Position. This chart has recently formed a series of higher highs and higher lows over the last 5+ weeks.  So it looks like there is a possibility of one more swing higher before we get to a clear oversold position (over +60).

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 (Updated over weekends)

These are positions I actually own

Resource for ETF’s -MSN Money has 821 ETF’s listed according to performance 1,4,13 weeks 1, 3 5, years on a 20 minute delay for daily prices. LINK

SELLING & BUYING

One of the ETF’s we are going to use in 2010 is EDC – an ETF that does 3 times what emerging markets do.

Still holding onto all of UWM.

When/If McClellan Index gets back above +60 will sell some more.

Long Term Outlook = CAUTIOUSLY BULLISH

Let Them Eat Cake

“Marie Antoinette à la Rose”

Harry Ried and the Democratic Senators have come up with  a Health Care plan that insures an additional 31 million Americans and closes some coverage loopholes -  Even though this plan is far weaker than other plans that have been voted and kept in place by the voters of other civilized industrial democracies the left wing Huffington Post seems to be happy - LINK

Michael Moore and others call this a giveaway to the health insurance industry LINK

The Marie Antoinette crowd who would rather tell the children, those seeking employment and others to “let them eat cake” have come up with nothing to help even the uninsured.

Global Trends & KISS

(Keep It Simple Stupid)

Yesterday, Investors411 went over an obvious global trend - sex , from politics to economics, sells . Incidentally, all the stores I went too were sold out of the Newsweek  magazine with the hot Sarah Palin cover. It probably went as fast as the  Washingtonian magazine with the hot Barack Obama cover.

In the Overview Section LINK of the blog, written a year ago are outlined 4 major trends that that greatly influence economics and the stock market.

Relative to all the major investors out there, I’m for lack of a better word stupid . They know more, have armies of help and banks of computers. So I’ve identified 4 major mega trends that not only make YOU and me better investor, but helps understand or relates to all things from economics to politics. It’s worked for the last 5 years so there is probably something to it. In short they are -

• Globalization
• The shortage of commodities (Peak Oil)
• Spread the Wealth
• The Great Recession

Yes,the  Overview Section which covers this in more depth, should get revised or updated.

In a narrow sense, they are investment tools that have given Investor411 the ability to outperform the benchmark S&P 500. In a broader sense, they make the world more understandable.

KISS & STOCKS

For those of you whose eyes gloss over in the stock section I’ve tried to KISS it today, but I left a little in for those who want the deeper analysis

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0.11%	up
NASDQ	-0.48%	up
S&P500	-0.05%	up
Russell2000	-0.36%	-

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

Volume – Volume or how many people buy/sell a stock on a given day his usually the #1 confirmation factor of a price move. That’s why in the above chart the price and volume figures of the major US stock indexes are used. When lots of investors buy or sell the price move becomes more significant.  Kind of like a crowd that rushes through the front door (the door would be called technical support or resistance level in stock market terms) on the day of the big sale.

Today even though the volume was up from the previous day its NOT significant because it is still below the average volume.

If you get lost with a term or want to know more use Investopedia.com dictionary and other help programs or Stockcharts.com tutorial programs.

Why Stocks Are Moving Higher – There are several major reasons and lots of those reasons relate  to the 4 mega trends.

• Many emerging markets like China never entered recession. They have managed or regulated capitalism, not our unregulated free market system.
• Stimulus programs around the world in all the G 20 countries. Basically governments printing money, cutting taxes, low interest loans etc. Stimulus works best if you have lots of money saved (are a creditor nation) and badly if you are in debt. (you are a debtor nation)
• While the financial meltdown caused by not regulating the US financial system  did spread and impact the world. Countries that bought into the US “free market” or “greed will regulate itself” system were hurt the most. Therefore, there are some heathy countries.
• The US government/taxpayers socializing the risk of the shadow banks and let them remain in the shadows by eliminating mark to market accounting and has NOT offered any real solutions. The same bubble is building again and stocks ar rising.
• Zero interest loans by US government creates a whole bunch of cash that has to go somewhere – Under the sofa, collateral for bad loans, and/or into the stock market.  So stocks look relatively cheap.

Now going to get a bit more technical

If you don’t understand a term look in up at Investopedia.com dictionary 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 has broken out to new yearly high

The BDI rose a  HUGE +258 points yesterday and closed at 4643. Up 15 days in a row . Technically it broke out through its major resistance level 4291 (this year’s high)  The BDI has rallied about 2400 + points since late September.

The BDI is starting to go PARABOLIC – starting to move up too far too fast-inevitable result is a crash and burn. DANGER for Bulls

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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 fell  -0.32% yesterday. The dollar closed at $75. 06. This is back above the major $75.00 support level. 

CAUTION – The first breakout (up or down) is often false. This happened two days ago Right now the momentum (since the long term trend is down) is with the Dollar bears and consequently stock bulls

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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 +12.85 This indicates stocks are slightly overbought 

Even though the Dollar Rules consider overbought levels (60+) on this index a point to lighten up on stocks)

Key to chart – Zero  is roughly  neutral and roughly when you approach to @ +60 you are overbought and approaching -60 you are oversold . Buy at oversold and sell at overbought. Nothing is absolute in this chart. In fact using the moving averages as a central point is better than using zero. Nothing is absolute about the minus or plus 60 number either.

Oversold conditions = buy, Overbought positions = sell

Positions

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

Sorry have not had a chance to update Positions section in well over a week – see past updates

Investors – Folks who buy and want to hold for months/years.

Comments – NOT the time to buy or add to recommended positions. (FXI, EWZ, GLD )  Enjoy the rally. Shorter term investors may want to sell part of the 3 major positions while they are at highs.

Repeat – Clearly NOT the time to be adding long positions.  We’re close to new highs in major positions and the BDI looks like its started a parabolic run. (GLD might be an exception here and buying a small dip still makes sense)

MOO agriculture ETF has just broken out of its trading pattern to the upside and a minor position could be started. (more later) Still considering minor position in  VNM (Vietnam ETF – has dipped recently)

Obviously would like to buy more but waiting for a more oversold environment. Looks like we may be starting a correction.

Traders – Folks who day trade or are in and out of stocks within a month or two

AMZN & NVS positions are on hold right now. We’ve already sold 1/2 these positions.

Long Term Outlook – The dollar looks like it may break down through major support and the benchmark S&P 500 is on the verge of a yearly high – Outlook will change to CAUTIOUSLY BULLISH if/when this happens. But subject to further change back to neutral since breakout was weak.

Long Term Outlook = CAUTIOUSLY BULLISH

A Big Wet Kiss

A Big Wet KISS – No in this case a BWK does not mean what you think

KISS = Keep It Simple Stupid – Investors411 is going to spend the rest of the week Keeping it as simple as possible. If you’ve followed Investors411 for a while you know that the blog outperforms the benchmark S&P 500 Stock Index because it follows a series of mega trends and invests accordingly. See OVERVIEW section at top of blog.

The No Brainer simple mega trend it the case of the two above magazine covers for potential investors is SEX sells

When I was 20 something I loved the artwork, fantasy and heroics of comic books. So I bought some for 10 cents and put them away in plastic cases. Last year as a Bar Mitzvah gift we gave one Conan the Barbarian and one Iron Man comic worth a total of @ $1000.00 to a grandson. - A 5000% profit if my math is right.

So today I’ll buy and save Newsweek Covers of Sarah Palin.

First, in a brown paper bag I’m going to take it to Town Government tonight, I’ll take the Newsweek and show it to some of my fellow officials. Hopefully testosterone crowd has not already bought up all the copies of Newsweek to put under their mattresses.

Palin is going to whine cry and blame others for the picture she posed for.  She plays this "why’s everybody always picking on me" victim better than anyone else on the planet.  The obsessed media will juice this and a few years from now I’ll have a magazine/cover worth a lot more than most investments. If American’s buy her glitter and elect her President I’ll make a fortune.

Bottom Line – The Trend is simple and works = sex sells, Does anyone have old copies of the Washingtonian?

KISS & STOCKS

For those of you whose eyes gloss over in the stock section I’ve tried to KISS it today, but I left a little in for those who want the deeper analysis

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	+0.29%	down
NASDQ	+0.27%	down
S&P500	+0.09%	down
Russell2000	-0.09%	-

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

Technicals = Looking at pretty pictures of charts and finding patterns. Investors and Traders are animals who tend to run in herds moved by fear and greed.  We collectively form habits – After the first few time stopping at a red light becomes a habit. The same happens to most traders

Fundamentals = All the figures that show if a planet, country, sector or stock is growing or shrinking. In this case its growing or shrinking economically. The most important of fundamentals are mega trends.

Bottom Line – Technicals and fundamentals are useful when predicting what will happen. Investors411 uses them to predict the future – At the end of each day’s blog there is the Long Term Outlook. That show the general predicted longer term (3 to 6 months) outlook for the market

One important distinction to realize when looking at stocks . - Almost everyone else (especially those who invest or trade the big money) knows more than you or me.

• They have an army of computers and techies doing far more in depth analysis than we do.
• Also, they cheat – sometimes legally and sometime illegally.

The advantage we have is in KISS (Keep It Simple Stupid) and by using technicals we can follow what this big herd of sharks  are doing. Because they have so much money its hard to hide what they are doing.

Now going to get a bit more technical

If you don’t understand a term look in up at Investopedia.com dictionary 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 @ 1+% 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  very significant +161 points yesterday and closed at 4381. Up 14 days in a row . Technically it broke out through its major resistance level 4291 (this year’s high)  The BDI has rallied about 2200 points since late September. =  Bullish for stocks & world trade right now. Especially good for our positions in FXI & EWZ

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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  significant  +0.56% yesterday. The dollar closed at $75.3 0. This is back above the major $75.00 support level. The dollar rose significantly (above 0.50%) and so did stocks (just a little) This is a rare disconnect. The dollar and stocks almost 90% of the time have been moving in opposite directions. The fact that stocks were able to have a small rally and break the trend is in the short term  BULLISH

CAUTION – The first breakout (up or down) is often false. This happened yesterday Right now the momentum (since the long term trend is down) is with the Dollar bears and consequently stock bulls

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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 +22.63 . This indicates stocks are overbought and The McC fell  -34.41% yesterday. Not sure if this data from Stockcharts is correct

If we get another big rally the McC will be clearly overbought and its definitely time for long term investors to take some profits.  No one should be adding to long positions now. Traders and shorter term investors should be considering taking profits.

Even though the Dollar Rules consider overbought levels (60+) on this index a point to lighten up on stocks)

Key to chart – Zero  is roughly  neutral and roughly when you approach to @ +60 you are overbought and approaching -60 you are oversold . Buy at oversold and sell at overbought. Nothing is absolute in this chart. In fact using the moving averages as a central point is better than using zero. Nothing is absolute about the minus or plus 60 number either.

Oversold conditions = buy, Overbought positions = sell

Positions

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

Sorry have not had a chance to update Positions section in well over a week – see past updates

Investors – Folks who buy and want to hold for months/years.

Comments – NOT the time to buy or add to recommended positions. (FXI, EWZ, GLD )  Enjoy the rally. Shorter term investors may want to sell part of the 3 major positions while they are at highs.

Traders -  Folks who day trade or are in and out of stocks within a month or two

AMZN & NVS positions are on hold right now.

Long Term Outlook – The dollar looks like it may break down through major support and the benchmark S&P 500 is on the verge of a yearly high – Outlook will change to CAUTIOUSLY BULLISH if/when this happens. But subject to further change back to neutral since breakout was weak.

Long Term Outlook = CAUTIOUSLY BULLISH