Iran Day 14

Collage of dead protesters – Photo Andrew Sullivan Blog

Sorry, I’m just too emotionally exhausted and heartbroken to continue sifting through the blogs and tweets on Iran. You look at too many videos, audios blogs, tweets, and analysis and it’s overwhelmingly sad.

Best 4 sources still

Nico Pitney at the Huffington Post here

Andrew Sullivan at the Atlantic here

Robert Mackey at the NYT here

BBC- world’s largest news outlet that strives to be unbias here

The Obama Debate

We’ve had an excellent debate over Obama’s policies and effectiveness in the comments section of the blog .  You all have make some great points. Investors411 has both praised Obama and condemned him (mostly over the choice of Larry Summers as chief economic advisor)

Right now Obama is a very popular president (something like 60% positive and 32% negative) So what.

To jumble the title of his book – We have The Hope , but not enough Audacity .  This summer is the time for him to forget about consensus building and take charge. The single issue he alone can make the most difference in  this summer is health care.

"[Obama's]command of the issues — and ability to explain those issues in plain English — is a joy to behold. His administration has spent months talking and working with everyone on health care. Fine. Now its time for Audacity.  Take one plan and lead. See Nobel Prize winner Paul Krugman editorial here

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index	Percentage %	Volume
Dow	+2.08%	up
NASDQ	+2.08 %	up
S&P500	+2.14%	flat
Russell2000	+2.88 %	-

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Volume was below average again  and up just a smidge for the NASDQ and Dow. Perhaps some expert analyst can glean something from the volume, but the bottom line is no big moves are being made by the big institutions and there are a lot of people sitting on the sideline. Some of these folks are very unlikely to get back into investing in stocks. Volume is NOT confirming any price move.

Yesterday’s big move higher was probably a whole bunch of traders (as opposed to long term  investors) getting caught having to cover their short positions.

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Top 3 Recommendations/concepts

Very happy with the mid term results posted yesterday! Obviously Investors 411 toasted the benchmark S&P 500.  Going forward 3 recommendations/concepts

• China (FXI )will continue to outperform USA (See Positions & Overview at top of blog for more on this and other recommendations)
• Brazil, (EWZ ) India (INF ) and alternative energy (GEX/PBW ) are still decent buy the dips plays.  But you have to be careful on all of the above including China. Even though they will outperform USA. They will fall faster in a meltdown.
• The economic problems  created over the past decade are massive. Over leveraged or phony wealth accounted for huge part of economic growth and where is that growth going to come from now?  Our (the USA) debt, dependence on foreign oil, and our inability to change entrenched special interest groups are three large anchors holding our economy back.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Mid Year Review of Stock Positions

Scroll down to bottom of STOCK section

Iran Day 13

Iran Photo from Andrew Sullivan Blog

Violence continues. See previously recommended sources – Lede from NYT, Huffington Post, Andrew Sullivan & BBC for more. At 9:13 EST Nico Pitne y at Huffington Post has a video of the Supreme Leaders military firing on demonstrators here

What can you do to help the protesting Iranians? Tom Friedman has an interesting long term approach. Iran’s Green Revolution = America’s Green Revolution. you can read about it here

Obama Debate Rages on

The are you happy with Obama ? debate continues to rage in the comments section. More fireworks See posts by  "A Friend" and D.

Health Care

Going to spend a lot more time on this . Two important points for now .

• From D’s comments post - "if a private option is so bad why have none of the dozens of counties that have public heath care voted to change back to private health care?"
• Time magazine’s Michael Grunwald has an excellent article on Health Care costs here Why some major hospitals and areas charge less than others for comparable services. Example Mayo Clinic & Cleveland Clinic @40% less than UCLA Med Center and John Hopkins.
  

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index	Percentage %	Volume
Dow	-0.28%	down
NASDQ	+1.55 %	flat
S&P500	+0.65%	down
Russell2000	+1.06 %	-

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Technicals & Fundamentals

The volume was again below average. It hard to be sure about making a forecast when our #1 forecasting tool - volume – gives no indication of which way prices will flow .

Significant forecasting tools/Indexes for stock markets

Note - Repeated statements in brown

Right now, there are two indexes that are significantly influencing stocks in the USA & world. The US dollar in the short term and the BDI in the longer term

$USD – The Dollar rose +o.73% yesterday. Any move over 0.50 is significant. The strong inverse correlation between the dollar and stocks has existed for many moons. In the short term we are seeing some breakdown in the strong inverse correlation between the dollar and stocks. The best explanation for this is that the dollar is trading within a range and when it breaks out of that range (78+ to 81+ see yearly chart here ) this inverse correlation will again become  more apparent.

BDI - The Baltic Dry Index measures the flow of goods (world trade). 24 up days in a row, 6 down day in a row,  a 6 day rally and now a 4 day fall. Technically we failed to make a higher high and if/when we make a lower low it will be technically a very bearish sign .  Momentum is building to the downside.

If trade is diminishing through out the world then a worldwide recovery is in big trouble.

Reading the Tea Leaves

This market has moved too high to fast and is a technical rebound. As stated two weeks ago we may see a 5 to 10% technical fall or consolidation. This week fearless forecast – Another down to flat week. Look for the areas around 875 and 850 on the benchmark S&P 500 as support levels.  So far because of the lack of heavy volume this looks like an over bought correction and not a total meltdown that tests the old lows.

Investors411 has recommended buying some downside protection on any minor rally. A 5%+ position in -SDS – An ETF that is ultra short’s the S&P 500 -  Bought yesterday at @$57. This is probably not going to be a position that will be held for a long time.

Caution – The last time I was worried about a drop (Swine flu) I bought FXP (ultra short China) and got burned

Mid Year Review of Our Positions

Part #1-Part 2 tomorrow

I’ve rounded off some of the numbers and the first number is the % of the entire portfolio invested. You can learn more by going to "Positions" section on top of blog. Some position in the same ETF were added at different times, so they have different results.

All numbers are approximate All position are year to date or from when they were bought this year (This does not include some short term day or swing trades – If your interested in this send me a separate email)

Our benchmark S&P 500 is flat for the year

FXI -(China)

• 8% of portfolio, up 24% position open
• 8% of portfolio, up 37% position open
• 8% of portfolio, up 20% position open

FXP – (Ultra Short China)

• 5% of portfolio down 13% position closed

EWZ (Brazil)

• 6% of portfolio, up 26% position closed

GLD (Gold)

• 3% of portfolio up 13% position closed.
• 3% of portfolio down 4% position open
• 3% of portfolio up 9% position open

QLD (Ultra long NASDQ 100)

• 6% of portfolio up 16% position closed

XLF (Financials Stocks)

• 5% of portfolio up 23% position closed

IFN (India)

• 3% of portfolio up 1% position open

GEX (alternative energy)

• 3% of portfolio up 10% position closed
• 3% of portfolio up 3% position open

The Hedge (Equal amounts of QLD – ultra long NASDQ 100 & SDS ultra short S&P 500)

• 15% of portfolio up 1% position open

SDS

• 5% of portfolio up 1% position open

Analysis tomorrow – But obviously Investors411, as in past years, toasted of our benchmark S&P 500

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Iran Day 10

Photo  Flckr user Jamie Vatanhah

The BBC has an excellent post of brown shirted Iranian government forces riding on there motorcycles and shooting into a crowd here or a women from inside Iran describes what’s happening to BBC here

NYT lead story has Government publicly admitting that there were more ballots than votes cast in 50 Iranian cities here here The usual sources still provide the best description of what’s happening . Also add the live NYT blog the Lede

Read Scott’s worthy description of Iran’s/US past history in his post on the right side of blog.

The Obama Debate

Frank Rich editorializes its Obama’s Make or Break Summer here (See Sunday’s blog) Bob and D already staked out there positions. Here they are.

Bob – I am feeling badly betrayed by Obama. His health care reform is nothing that will help and his reforms for Wall St look like they were written by Wall St. He has not kept his promise on Don’t Ask, don’t tell and his Justice Dept is defending DOMA. His energy head is pushing for Govt.subsidies for Nuclear Power,but not for renewables. He refuses to prosecute the High Crimes and War Crimes of the Bush administration. I am angry,ashamed and I feel betrayed! Maybe Nader was  right! Obama is not going to give us health care ,or green energy. He is giving us endless war,a fascist state and new nuclear power plants. At least Bush never pretended to represent us,but O did. Damn him to hell!

D – Bob, I can understand people being frustrated with Obama, he hasn’t done everything I want too. But sometime you you get what you get and your cup is 1/2 full. I hope it fills up more over the course of the next 4 years. Some of the Positives that Obama has helped create -

1) As Barr said under Bush we got Ahmadinejad, Under Obama we got the Cairo speech, Lebanon election and the Green Revolution in Iran
2) We don’t have a right wing radical nominated to the Supreme court, we have Sonia Sotomayor
3) Laws expanding children’s health care funded by a cigarette tax
4) science means something again and we passed stem cell research
5) Abolishing torture, ordering Guantanamo closed and a fixed timetable for Iraq withdrawal.
6) A big stimulus bill/taxcut to get the economy moving again.
7) Moving toward better lower cost heath care for more Americans
Keeping the economy from crashing and a stock market rebound
9) Money in the stimulus for green jobs and education.
10) The new respect the US has gained from other countries around the world.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index	Percentage %	Volume
Dow	-0.19%	up
NASDQ	+1.09 %	up
S&P500	+0.31%	up
Russell2000	+0.64 %	-

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Both the NASDQ and the S&P moved higher in above average volume.  However Friday was what is called a "quadruple witching day"  This means either a whole bunch of stock traders were riding around on their broomsticks in audition for the new Harry Potter movie or a whole lot of options expired.

Bottom Line – Increased volume NOT a fact on Friday.

Major event – Fed Meets this week

Technicals & Fundamentals

Significant forecasting tools/Indexes for stock markets

Note - Repeated statements in brown

Right now, there are two indexes that are significantly influencing stocks in the USA & world. The dollar in the short term and the BDI in the long term

$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 down-0.34% .   It looks like the dollar may be establishing a short term bullish pattern (see chart)  of higher highs and higher lows. Still to early to tell

Fundamentally its hard to understand why the dollar is rising, because we are printing to much $ and have s large stimulus package. Still other countries and traders are buying dollars. Lots of different ways to spin this – one is there is still confidence in the US economic system.

BDI - The Baltic Dry Index measures the flow of goods (world trade). 24 up days in a row, 6 down day in a row,  a 6 day rally and the BDI fell minimally on Friday 4073 to 4070 . The BDI is more a long term indicator. The chart pattern shows that the BDI has reached a critical resistance level its high of the year.  This could either be a double top chart pattern (bearish) where price fails to move higher or we may break out to new highs. Time will tell.

If trade is diminishing through out the world then a worldwide recovery is in serious trouble.

Reading the Tea Leaves

Still think this market has moved too high to fast and is a technical rebound. As stated two weeks ago we may see a 5 to 10% technical fall or consolidation.  But one Economist who called the whole stock meltdown in the first place Nourille Roubini see a "significant market correction" LINK His reasoning is oil prices and interest rates are rising too rapidly.

If these do continue to occur, what started out as an over bought technical retreat could turn into a full scale test the low bottom.  So in future Investors will keep an eye on interest rates and continue to watch oil prices.

This week fearless forecast – Another down to flat week.

• Holding onto long term positions FXI ,
• PBW/GEX (sold 1/2 of GEX and waiting for dip to buy similar amount of PBW – then will sell other 1/2 of GEX and buy PBW.  PBW is just a better preforming alternative energy ETF
• IFN Bought a small amount India ETF.

Personally, have not reinvested in the other positions that Investors411 held – QLD ( 2x NASDQ) EWZ (Brazil) & XLF/UYG (financials) Waiting for more of a dip.

"The Hedge"  SDS and QLD is basically flat since it was introduced.  For more see Position s section at top of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING