Photo of Lake in Iran

War In Iran?

Is the US already in an undeclared war in Iran?

• Latest – US drone downed in Iran

• Stuxnet/Conflicker worm computer virus attacks Iran nuclear facilities.

• Assassination (bombing) kills top Iranian nuclear scientists

• Other assassination attempts?

• Plot to kill Saudi ambassador in US linked to Iran

Investors411 has reported in the past that Obama is 10 times more likely to use drones in targeted assassinations than Bush.

This sure looks at least like a cold war. Will it get hot? Betting odds from Intrade on an overt US and/or Israel air strike on Iran by June 2012 = 30%

Payroll Tax Cut

Obama makes case for extending Payroll tax cuts for middle class Americans. Most Republicans oppose this. Romney, of course is flip flopping. Taxes would increase by @ $1000 for most middle class families. LINK to story

Presidential Poll Numbers

Most folks realize Newt Gingrich is up in the polls for Republican Presidential nomination. Voting starts in a month. In the first four voting states Romney is moving in the opposite direction. LINK to story. – Poll compilation.

Newt’s rise has been too meteoric, but this is also a significant sign that Romney may be in trouble.

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STOCKS

The Reality

At the end of the year more conservative fund managers (mutual, hedge 401k managers) have to INVEST their money or explain to INVESTORS why their $$$ are earning next to nothing in a money market account.

For the last four+ months worldwide equities have been in turmoil. These conservative fund mangers hate high risk often measured by the VIX (see chart) As you can see the VIX has basically been above 30 for 4 months and recently dropped below.

The below 3o is kind of an all clear signal, and these conservative investors are sitting on 4 months worth of money.

Therefore – There’s a strong possibility we’ll see Santa Clause.

Of course, some strong fundamental factor can  disable Santa’s sleigh.

Yesterday Standard and Poors (a major rating agency) did put most of Europe on “negative credit watch” for a downgrade. Not enough to stop Santa but  a series of events like this my put the sleigh out of commission.

Strong correlation between Europe and US stock opening price

Europe

• The Bears Case - Europe (the world’s largest economic block) has a huge fiscal crisis with no apparent solution.

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• Technically APPL’s chart is much better than AMZN. The later in free fall.

• Exit strategy – Exit 1/2 the trade with  5+% gain. Let the rest ride.

More in comments section or tomorrow’s blog.

A Photo Essay

Pepper Spray

84 Year Old OWS Protestor Dorli Rainey

From Seattle Pi

“Icon” Portland Oregon OWS Photo

Students at UC Berkley OWS from Aggie TV

You Tube – Short Video & Long Video

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Criminal Prosecutions of

Financial Institutions

Et Tu Barack Obama

The above inspired by:

• OWS “Banks got Bailed Out, We Got Sold Out” Chant
• A Deal That Wouldn’t Sting NYT Gretchen Morgenson
• How To Prevent A Housing Recovery Seeking Alpha’s Bruce Judson
• 6,000,000 foreclosures since 2007 and another 4,000,000 in the works MSNBC
• Why Isn’t Wall Street in Jail? Rolling Stone’s Matt Taibbi
• Some on the left who believe only right wing politicians are in bed with shadow “banksta’s”
• Mostly because from college students to 84 year olds – there are those willing to sacrifice and fight for what they believe in.

Who are the 99%

See more of the 99% at

http://wearethe99percent.tumblr.com/

Pass on this or your favorite photo

Tom Friedman’s editorial in the Sunday NYT has an excellent article on the crony, casino capitalism we are fighting against.

Some major points –

• An under reported Citigroup Fraud “that made GS “look like boy scouts” – No one gets arrested while thousand of Occupy Wall St. protestors do.

• A comparison to Taharir Square in Egypt’s quest for justice where the “game had been rigged by the Mubarak family and its crony capitalists.”

• “Capitalism and free markets are the best engines for generating growth and relieving poverty — provided they are balanced with meaningful transparency, regulation and oversight. We lost that balance in the last decade. If we don’t get it back — and there is now a tidal wave of money resisting that — we will have another crisis.”

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Euro Zone Doubts

Lots of news outlets over the weekend cast doubts over last weeks  Euro Bailout. Here’s one from NPR’s Jim Zarroli .

But the best (easiest to understand)  is this two minute animated explanation featured in the Guardian.

Click on animation photo for link to video

The impact of these editorials on stocks covered below.

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Raising Cain

Huffington Post headline this AM is about “flavor of the month” (leader through October) Herman Cain having accusations of “sexual harassment” If there is any validity to these charges Cain is toast.

Candidate Rick Perry, last quarter in financially out raised Cain 6 to 1 and even beat Romney.  Money buys elections and flavors last a month. Perry, last week picked up endorsement of Mr Flat Tax -Steve Forbes. If Perry can stop putting his foot in his mouth he would be a very strong candidate.

Mitt Romney took a spank from mega conservative columnist George Will on Romney’s flip flops

Perhaps, Obama’s biggest weakness was how would he answer the 3AM phone call?  He did with Somali Pirate’s, Bin Laden, His #3, and Ka Daffy. Do we want an indecisive flip flopper answering that 3AM call?

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STOCKS

“Deja Vu, All Over Again”???

Yankee Star Yogi Berra

On July 21 st markets rallied on the news of a Euro Bailout Plan – Greek bond holders took a 21% cut , etc. The chart of the benchmark S&P 500 shows a significant rally in above average volume on the 21st. We held onto or confirmed those gains the next day just like last week and the second major Euro bailout plan.

After a weekend investors started to doubt the rescue plan and by Aug. 8th the S&P 500 was down almost 20%.   The question is – are the current doubts strong enough to have the same impact on the investment herd? (see above links and link below)

Click on photo for link

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Reading The Tea Leaves

• Our #1 technical forecasting tool, the McCellan Oscillator, is at +77.29 . 50DMA at 22.45. Overbought = Bearish.

• Our secondary indicator, the Put Call Ratio is at 1.00. Well below its 50DMA which is at 1.15 = Bullish/Neutral

• For more on MO & PCR see POSITION Section of blog (scroll down)

• China’s growth numbers has its critics, but again its GDP was over 9% again.

• Consumer sentiment is down, but consumers are spending more in USA.  Due to top 10% (income) on buying spree and the bottom 90% very worried.

Bottom Line – Too hard to make a definitive call on this situation because the manipulators (Central Banks) & shadow banks are hidden in opaque accounting.

However , if you use some inter market technical analysis, the kind John Murphy creates, you’ll see some clear hesitation across currency, bond and commodity markets. (What all this means in tomorrows Investors411)

Same long term outlook till/if we break down below 1225 on SPX.

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Long Term Outlook

3 to 6+ months

Investors411 upgraded its Outlook last Monday to CAUTIOUSLY BULLISH. Reasoning

• Technically, we broke out of this summers trading pattern. The resistance and now support level for benchmark S&P 500 is @ 1225.
• Fundamentally, the perception that European banks will survive (see Banksta at War) another over leveraged crisis
• A 2.5% GDP Growth in the third quarter is NOT a recession number.

CAUTIOUSLY BULLISH

Investors411 has 5 different 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.

Going Global

The Occupy Wall Street Movement has exploded globally to about 1405 locations worldwide. [OccupyTogether.net]

I did have the pleasure of spending time both Saturday and Sunday at Occupy Boston. From the street workshops I attended – a universal theme of jobs, fair taxes and financial oversight were the major themes.

Some major points.

• Top 1% of Americans combined posses more wealth than the bottom 90%
• 400 wealthiest Americans have a greater accumulated wealth than the bottom 150 million Americans
• Between 2002 and 2007, 65% of all economic gains went to the richest 1%

None of the workshops or discussions I had preached hatred of the rich, only that we needed a more balanced approach. Since the weathies 1% are making almost all the gains, 73% of Americans (Time magazine poll) favor raising taxes on the rich to help balance the budget.

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The Candidate Of Wall Street

Last election cycle Obama was the candidate who raised the most $$$ for Wall Street. This election cycle the NYT (Sunday lead story) reveled Mitt Romney as the candidate of Wall Street.

Show me the Benjamins

• Romney –  $1,500,000
• Obama - $270,000

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Britain’s Misery

Timing is everything.

On Sept. 19th Investors411 showed what happened to Japan when they enacted budget cuts = Drop in GDP.

The lead editorial in Saturday’s NYT shows the self inflicted misery in Britian when you cut the budget during difficult economic times, instead of  letting growth return first.

• “Britiain’s economy has barely grown since budget cuts were enacted last year.”
• “Highest jobless rate in 15 years.”
• “GDP growth last 1/4 = 0.01%”
• “Cut of public sector jobs…has failed to revive business confidence.”

Britain is now instituting QE (quantitative easing) programs of its own to stimulate the economy.  A move fiercely opposed by right wing politicians in the USA.

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Stocks

Google’s earnings report (season now in full swing) led markets higher Friday.  AAPL, AMZN & IBM are the 4 horsemen breaking out to leading tech and equities higher.

From England – why global market’s will rally This is the global consensus  and an excellent explanation of why Bulls have control and we have “started the seasonal rally”

Major European Summit meeting on Sunday 23 rd.  Looks like officials have found a way to privatize the risk and socialize the debt. Just like they what’s happening in the USA.

• Our #1 forecasting tool, the McCellan Oscillator rose to 80.23 or OMG overbought levels = BEARISH
• Our #2 forecasting tool, the Put Call Ratio, dropped  to 0.99 = NEUTRAL
• For more on these two indexes click on STRATEGY section on top of page.

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Reading Tea Leaves

• Over the last 3 years the MO at OMG levels has always meant at least a 5% decline over the next week to month.
• The ONLY time this did NOT occur was in  2009 when the Obama stimulus, 0% interest rates, TARP, and QE #1 combined to rescue equities.
• The pro’s that trade the PCR are NOT impressed with the MO. There PCR is bearish

Bottom Line – It certainly looks like most stock investors/manipulators/traders are signaling a bull market in the future. An event like the 2009 rally may be getting started. Today is the confirmation day of Friday’s breakout from the trading range. It’s hard to ignore how oversold we are.

There is no clear buy or sell signal.

Low volume rallies are acceptable because major institutions, Pro’s, hedge funds and HFT’s believe financial institutions that do almost all trading  think financials and central banks have won in Europe & the US. The people/governments/taxpayers will socialize their losses.

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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.

Traders – You’d like a lower MO, but at least into the European summit on the 23rd it looks like bulls may rule.  Buy the rumor and after the 23rd it may be sell the news.   The high MO is going to make rallies hard. Kudos to those who bought the last risk on trade when the Dow was 1100 points lower

Because of the OMG MO – Short term traders may be successful in shorting rallies.

Investors – Technically, a confirmation of the breakout of this summer’s trading range is bullish and the long term outlook will change to CAUTIOUSLY BULLISH.

Bottom Line – The economy is devastatingly poor for the vast majority of people in western democracies, but Wall Street is again winning.

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 72.20).
• Long technology - Investors411 will use ultra long QQQ (tech’s) QLD (opened at 81.13 – now at 89.15)
• @ a 1+ % gain on this trade so far

The four horsemen – AAPL, AMZN, IBM and GOOG should outperform if we move higher. Also YSL #5

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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.

Plutocracy vs. Protestors

This Saturday is going to be a big day in the Occupy Wall Street movement across the world.

Frequent blogger EW has found a way YOU can learn more about demonstrations in the 900+ cities across America, in colleges, in London and even his home base Berlin.

“All you have to do on Facebook is write the word “occupy” then fill in the city {in the search box}.  Saturday the 15th is going to be a big day.  London starting demonstrations or occupation on Sat. the 15th. The Occupy London page  that has over 13,137 friends. Here in Berlin our facebook page as grown and has 1712 likes/friends”

This weekend we will be joining Popeye and the Occupy Boston demonstrators.

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Change You Can Believe In?

The ruling Plutocracy has almost all the power – Our Supreme court has given them the right to flood elections with money elections. They have an army of paid lobbyists that guide their legislative agenda.  They own almost all the major media outlets and/or almost all programing  exists because of their paid commercials.

The amount of people who hate or disapprove of American politicians is at an all time high, yet ordinary people are powerless.

The plutocracy wants to shut down the “Occupy Wall Street” movement. The billionaire mayor of NYC, Michael Bloomberg,  is trying to shut down the NYC Occupy Wall Street as I write.

To get the change you can believe in you have to start thinking outside the political box of party politics.

• Obama is not going  have the army protect the demonstrators in NYC like the army protected the Egyptian protestors speaking in their park.
• Obama’s not going to send federal marshals like Eisenhower did to protect school integration.
• Obama is not going to join and stand with the demonstrators in NYC and say “let them stay and speak”

YOU are the one that has to make a difference.

Join one of the 900+ cities and universities across the world.

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Stocks

Google had a grand slam earnings report after the bell. US Markets were mixed in light volume yesterday.

• Our #1 forecasting tool, the McCellan Oscillator dropped to 54.35 or moderately overbought = NEUTRAL/BEARISH
• Our #2 forecasting tool, the Put Call Ratio, dropped dramatically to 1.o5 = NEUTRAL

Yesterday, for shorter term traders, Investors411 turned on a green light for a RISK ON trade to go short “Preferable – into any rally today” That rally never happened. Now our primary and secondary forecasting tools have taken a major step back in a mixed market. It would have been more understandable if they fell in a down market.

Therefore,  the yellow light is on for the RISK ON trade. Shorting is still more viable, but  only if we see a much bigger rally and a higher PCR.  We’ll have to wait for Monday.

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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.

Our Hedge Investment - Theory – Technology will do better than financial sector over time. JPM (big financial) missed earning expectations and Google (big tech) outperformed. This should be good news for our Hedge trade

• Short Financials – Investors411 will use ultra short SKF (opened at 78.91 – now at 74.12.
• Long technology - Investors411 will use ultra long QQQ (tech’s) QLD (opened at 81.13 – now at 86.05)
• This trade is still flat.

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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.

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Investors411 Technical Forecasting Tools.

The McClellan Oscillator

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Reading The Tea Leaves

Short Term Outlook

days, week+

• Both forecasting tools in Neutral

• YSL #5 had an outstanding day yesterday. LINK (scroll down) or See Paul’s comments. Since the majority of these stocks are high growth stocks, and these kinds of stocks are usually leaders in a bull market = Bulls are waking up. AAPL (Mother of all tech stocks and a YSL #5 stock) had a significant up day.

• Fed/Bernanke probably needs to “surprise” traders/investors for rally to continue. Something called Operation Twist, seems to be priced into this rally already.

• We do have a technical series of higher highs and higher lows building on major indexes. Also a technical bottom that’s been retested. That’s bullish

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Paul’s Corner

Great day for many of the YSL 5 stocks and a fair day in the market as many stocks are starting to move, BUT keep in mind the PIIGS news still over shadows the market. If you care to play don’t jump in blindly.

Quality growth stocks will always beat the S&P  500 and YSL 5 is doing well. Current gain is 12.11% vs. 5.56% since the Aug 18 Start. Here is the group performance analysis:

GPA Link

A good way to check the individual stock performance of your portfolio is to look at the Relative Strength of each stock. Using HGSI the following chart shows the % gain against the S&P 500 for the past 4 weeks. Note the S&P 500 equals 100, so if a stock has a number of say 117 for AKRX it means AXRX has done 17% better than the S&P 500. Looking at ZAGG with a number of 85 means ZAGG has done 15% less than the S&P 500 for the past 4 weeks.

RS Link

The following are YSL 5 chart observations and are made for education only. They are not a suggestion to buy or sell any stock.

AKRX – Broke out of a 6 week base 4 days ago. Extended, buy any dip.

ABV – Sitting on the 50, basing

NLY – Chart Ok

AAPL – Broken out, extended

CPHD – Extended, breaking out of lose base

CMG – Breaking out, extended

CROX – Sitting above the 50, very loose

GMCR – Basing above the 17

HANS – Good chart buy any dip

HLF – Basing above the 50

LULU – Break out from lose base

RES – Bounced off of lower trading channel

TSU – All HGSI indicators are red

ZAGG – Chart broken down, most indicators red

The  US Fed Reserve is providing stimulus to Europe, why aren’t the Tea Baggers and their lackey Republican hacks yelling about this and the cost to Mericans?

Remember, you are responsible for your investment decisions, and I am not. Please do your diligence, and please take ownership for your actions because I‘m sure not going to.

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500

See POSITIONS Section of blog for more on YSL#5.(scroll to bottom)

6 trading days ago we retested lows and Investors411 stated that for those who could stand the risk it was time to nibble. Forecasting tools are in Neutral, but the mojo is with the bulls.

NLY - Annaly Capital Mgt. Ultra high dividend stock –a @14% dividend NLY was bought in mid May at 17.14 Now at 18.16

GLD – (Long Gold ETF) Bought at 167.05 - Sold 1/2 for 8% gain. GLD closed at 173.31. Gold is contrarian to stocks and More willing to buy more than sell right now

Disclaimer - I buy everything in the hypothetical Investors411 portfolio. If stock is mentioned and I own it you will know.

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Long Term Outlook

(for US stocks only – not our economy)

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

More people working = more tax revenues = lower deficits.

You have to spend money to make money

This should have been Obama focus in his 2010 state of the Union – Not the deficit and government reduction. My only concern is too little and too late.

Investors411 Technical Forecasting Tools.

The McClellan Oscillator

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Reading The Tea Leaves

Our forecasting tools give no advantage to bulls or bears. There is some slight momentum with bulls because of the double bottom and series of higher  highs. NEUTRAL is the key word. Perhaps the calm before the storm. DAX – German stock market (already in bear market territory) down over 1% at 7:30 EST. – Bearish

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by JS

CALLS

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Buying calls are a way of taking more upside risk while limiting your downside.

SDS is a contrarian ETF that goes up 2x when the S&P goes down. It’s a decent stock to buy during this “fear” market, as protection.

The price this week was $24.56. To buy 100 shares costs $2456 + comm.

Buying this option:

-SDS111022C25 ( Oct 22,2011 @$25 ) costs $2.10 per share = $210 + com per contract. Your downside is $210.  This option is a bet that the S&P will go down dramatically by Oct 22.  SDS at the market bottom of last year July 2010, SDS was $38; at bottom of market in ’08, SDS reached $120.

Projected profit if S&P reaches these lows again:

You will start making a profit on this call if the S&P falls 4.5%. If it doesn’t fall 4.5% from the current price by Oct. 22, you will lose your

investment.

$38 – $25 (the strike price) = $13 – cost of call option  $2.10 + comm = @$11 per share or $1,100 profit per contract.

If SDS reaches highs of 2008, $120, you’ll profit $120-25 (strike price) = 95- 2.10 (cost of option) = 92.99 per share x 100 sh =  $9,299 per contract.

So on $210 bet,  one can profit $1100, up to $9299  if market reaches the recent past lows.  I use these options  as a hedge against stock I’m holding, as insurance. My loss is limited to the $210, my “insurance” premium. Let’s me sleep at night.

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500

LONGER TERM POSITIONS

See POSITIONS Section of blog for more on YSL#5.(scroll to bottom)

Until the Fed makes a commitment to more liquidity, its hard to add any unprotected long term position other than buying GLD on dip.

Strategy Outlined – A rough outline – The basic strategy is to buy the dip. Most crucial to this is our MO chart. Start buying when the MO dips to @-60 and add to positions if the MO goes lower. If the MO reaches +60 you either sell if still holding a position or short stocks (use puts or ETF’s that short stocks) This situation (@+/- 60) has occurred a bit less than once a month over last two years

Depending on what you invest in and if your an investor or trader you hold or sell. Examples –

• Shorter term traders – Sell 1/2 after 5 to 10% gain and can let the rest ride and become a longer term investment or until the MO approaches +60
• Shorter term traders – YSL#5 – Is more suitable for your investment style
• Shorter term Investors – Should use Puts and calls to leverage risk. Also a “protection” option for longer term investors in bad markets.
• Longer term Investors – Should only invest if the long term outlook is NEUTRAL. Your chances of success are better with a CAUTIOUSLY BULLISH outlook.
• Longer Term Investors – More likely to use Dividend stocks/ETF, but can use YSL’s.

Investors411 has just started using the PCR as an investment tool and will advise on how it mixes with the MO.

• For now extremes in the PCR (+1.50 & – 0.60) are sell and buy point.
• Remember how these charts (MO & PCR) mix and the Long Term Outlook is NOT and exact science, but Reading Tea Leaves.
• If you backtest results over the last two years you will find this a very successful method. But markets change and to will strategy.

NLY - Annaly Capital Mgt. Ultra high dividend stock –a 14% dividend

I still have a Put position to protect NLY. (strike price $17.00 for 3rd Friday in Sept) Also puts on other dividend stocks.

GLD – (Long Gold ETF)  Bought at 167.05 last week – a half position. GLD closed yesterday at 181.81. (I owe readers a column on this – hopefully Monday)  There are simply too many calls out there on GLD. Ripe for a bear raid by HFT’s. On other side – I believe it is likely that China is secretly buying tons of gold. If you have big position here I might take some profits.

Disclaimer - Personally I own  a group of dividend stocks including NLY, SNH, KMP, MO, HTD, ABV & AGNC and a few other smaller positions I have puts on over half of dividend stocks I own. I also use leveraged ETF’s TZA & SDS to minimize downside risk I buy everything in the hypothetical Investors411 portfolio. I will be purchasing additional YSL #5 stocks when we have a lower MO.*

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Long Term Outlook

(for US stocks only – not our economy)

*The most important foreseeable fundamental factor in determining the log term stock outlook is what The Fed (Bernanke) does to impact money supply (example – a new QE#3)

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

19 months ago in his 2010 State of the Union Barak Obama made perhaps his biggest mistake.

He did not focus on  the clear and present danger of jobs growth (which would have lowered the deficit) instead he focused on deficit recuction through cutting programs and raising taxes.

Perhaps he thought the other side would compromise in good faith. Perhaps, as some believe, he’s just a tool for the corporate oligarchy and in the end would make sure the folks who finance elections would get what they want.

On the battlefield General Petraeus in Iraq compromised with the terrorist who had fought Americans and brought them over to the other side = a compromise. But is the USA compromise to conservatives is an abortion – Tea Party Patriots – Don’t compromise.

Thanks to Jim J (for finding) and Erin Clouse (editor of the Brookline TAB for posting) this editorial from which the following points are drawn. The Tea Party and all the Republican candidates have take taken oaths NOT to compromise. The Tea Party -

• - It badmouthed the economy and the government at every opportunity, undermining the confidence of consumers, businesses and investors both here and abroad. And yes, the confidence of credit rating agencies.

• - When President Barack Obama and House Speaker John Boehner got close to making a deal for $4 trillion over 10 years, the tea party caucus yanked Boehner’s chain, and he pulled out of the talks. The grand bargain was dead.

• - Tea partiers spread the myth that a default wouldn’t be so bad, further feeding the perception that a powerful political bloc couldn’t be trusted to be responsible with the nation’s finances.

• - The tea party drove the debate — its leaders say so with pride and most pundits agree — to an unsatisfactory and unpopular conclusion: the debt ceiling reluctantly lifted, a last-minute deal nobody likes, a scant $1 trillion in deficit reduction, no reforms to taxes or entitlements, a disgraced and dysfunctional Congress, and a December date for another battle over the same turf.

As most of you realize, progressive are almost always willing to compromise – to look for a win win situation, but a conservative shoots first and asks questions later. Their world is black and white, heaven and hell, you’re either with us or against us and best your either a patriot or the enemy.

Click on picture below for enlargement  of latest (no compromise) brown shirted Republican to enter race

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KISS & Stocks

(Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

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Technicals, Fundamentals & Analysis

Shorter Term Outlook.

day/days/week

Gert Frobe from James Bond movie Goldfinger

Over the last two weeks almost every serious investor learned about gold or GLD. Two of the three legged stool that hold up the world economy wobbled over the last two weeks and investors rushed in fear to the shiny sparkle of gold.

The Three Legs

• USA – Total incompetence in congress. The far rights  strident refusal to compromise has set off warning bells from the stock market to Standard and Poors. Every European solution has included a tax cut on the wealthy, but NOT the USA which is dominated by Tea party Ideologues. Consumer confidence in the USA is near an all time low while retail sales is still blissfully chugging along. See chart below show a massive disconnect.

• Never forger our mantra – High Frequency Traders Rule US Equities – These entities make their decision in microseconds and not on long term trends.

• The McClellan Oscillator (MO) fell to-8.20 (-30 somewhat oversold, -60 oversold, -90 OMG oversold). Chart shows we are almost dead center in the middle of oversold and overbought territory. There’s wiggle room for stocks to move either way = Neutral

• Reading The Tea Leaves - Stocks are moving on headlines and that move is exaggerated by all the HFT trading.

From Friday’s Bottom Line - Technically because of the retest of the low and strong momentum higher HFT’s will take markets higher.  Headlines still rule and HFT traders can react instantly and with great volume to headlines.

Investors411 has been on a hot streak with daily calls and let’s see if we can make it 4 in a row  - Momentum carries markets higher today. It’s been relatively easy to get out of massively oversold territory, as we get more and more overbought the going for the HFT’s will get tougher and tougher.

Longer Term Outlook

weeks, month, months

• Repeat - May 20th forecast still stands. The recent Washington debt crisis debacle has focused everyone on cutting the money supply.  Simple math – The less money that’s out there = less jobs = greater chance the “Great Recession” returns. European debt and emerging market’s inflation fears add to this. As predicted the 15+ % drop has come to pass this summer Best read of tea leaves is a 1 in 3 chance for a bear market (20% drop from highs)

• Long Term Outlook Listed Below. Major long term trend (monthly) lines that have been broken. LINK. However, we are close to climbing back to NEUTRAL (see 50 day moving average on monthly chart), The Fed has promised long term low long term interest fates till 2013, and that’s significant for US economy. If the Fed does some type of QE #3 – this could also get us back to CAUTIOUSLY BULLISH LINK

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Look for Paul’s Corner every Tuesday and Thursday

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

YOUR Stock List #5 is done and except for some last minute tweaking and waiting for an earnings report. It will be published on Thursday in Paul’s Corner.

NB – With the exception of NLY & GLD (both profitable and remember NLY’s 3 to 4% dividend) Investors411 held no long positions for most of the summer and especially August.

NLY - Annaly Capital Mgt. Ultra high dividend stock – It’s been shaky, but so far NLY has held up reasonably well through current stock market slide. NLY is the only position in Investors411 hypothetical portfolio

I still have a Put position to protect NLY. (strike price $17.00 for 3rd Friday in Sept) Also puts on other dividend stocks.

GLD – (Long Gold ETF) Obviously a MAJOR mistake to sell and take meager +3% profits. Like a millions of other people who see worldwide economic problems ahead – waiting to buy another diptobuy. Also sure looks like GLD had its climax run and could be settling. We’ve had a two day dip and will buy if day 3 of a dip occurs.

Disclaimer - Personally I own  a group of dividend stocks including NLY, SNH, KMP, MO, HTD, T, ABV & AGNC and a few other smaller positions I have puts on most of dividend stocks I own. I buy everything in the hypothetical Investors411 portfolio. I also own some (about 80% of thisposition has been sold) SDS & TZA (ETF’s that double and triple short the market) as hedges.

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Long Term Outlook (for US Economy)

BEARISH

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Long Term Outlook (for US stocks)

CAUTIOUSLY BEARISH*

*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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

Investors411 has a 6  year record of beating the S&P 500

Fat so called “Free Markets” and the public

Investors411 2008 prediction – “The problem in the financial sector is far far far far far bigger than first imagined. Impact of this mess is going to take years to resolve.”

Each year in the POSITION section of the blog the above statement has been repeated. The so called “free market” capitalism that is sinking the US economy now looks like it will now take at least a DECADE before any resolution is is forthcoming and that’s if we are lucky. For a more detailed outlook as to what’s happening see OVERVIEW

Unfortunately The MAY 20 downgrade of the US economy and stocks has come to pass (we’re still a couple % short of the predicted amount, but that should happen today)

Like the two guys on the seesaw above –

A list of the economic imbalances in the future for the USA.

• Loss of focus on jobs – Without jobs the economy doesn’t grow and the deficit does not shrink
• Stimulus runs out – You can argue its effectiveness, but bottom line it added to GDP
• QE2 ends – The FED liquidity supply that propped up both stocks and the US economy is over
• Constriction of money supply begins – Government programs that helped create a vibrant and united America will be cut and jobs get cut with them. Simple math less money supply = less GDP growth= Great Recession Part 2
• Japan and Europe are in trouble, Emerging markets have inflation problems. (see Great Recession/Roubini link above)
• A “Misguided” S&P downgrade that is going to further decimate the state budgets/jobs and consumer confidence

Blame - What’s needed is short term stimulus and medium and long term austerity measures. (paraphrase from Roubini link above)

Tea Party/Republicans = Only one presidential candidate, Jon Huntsman, has dared take an opposing view to Tea Party orthodoxy.

• No compromise attitude.
• Free markets or nothing at all.
• No government regulations on markets.
• Abolish the Fed.
• Return to the gold standard.
• It’s the fault of the teachers, cops, firefighters, union workers, blacks, foreigners, foreigners and every low wage earner in America that we are in this crisis.

Democrats

• The Democrats started caving in under Clinton when Greenspan and others deregulated investment banks leading to over leveraging and the 2008 meltdown.
• Obama has caved in to big business/”free market” at almost every turn (see past blogs). From his health plan, to trade treaties to caving in on taxes for the wealthy. He’s NO Teddy Roosevelt.

US (you and me) – The reality is we have no one to blame but ourselves for letting greed triumph over common sense and caring about our fellow partners on the planet

Investors/YOU

Its sad to see so many Americans who have made out financially because of our economic system now turn on the system that gave them their wealth.

QE #3 may stabilize the meltdown, but  the Tea Party will do everything possible to block it.

Cash is a better position than equities, but as explained before it too has its drawbacks.  I hate having a negative position on American companies but in reality the major corporations are globalized entities and care far more about profits than you.

These globalized entities or corporate oligarchy care far more about profits than where they hire workers or find consumers. The less governance they have the more they will exploit workers and working conditions.

Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

NLY - Annaly Capital Mgt. Ultra high dividend stock – It’s been shaky, but so far NLY has held up reasonably well through current stock market slide.

In  my personal portfolio I still have a Put position to protect NLY. (strike price $17.00 for 3rd Friday in Sept) Also puts on other dividend stocks.

GLD – (Long Gold ETF) Bought at 157.1 last week. (see last weeks blogs and comments section) –  Sold at 162.4 last Wednesday for over +3% gain,  Will buy back in on dip.

Disclaimer - Personally I own  a group of dividend stocks including NLY. I have placed puts most  of of dividend stocks I own. I buy everything in the hypothetical Investors411 portfolio. I also own some SDS & TZA (ETF’s that double and triple short the market) as hedges.

My overall positions in stocks is to be short the US markets

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#1 Technical forecasting tool – The McClellan Oscillator (MO) chart fell to to -111.38 (-30 somewhat oversold, -60 oversold, -90 OMG oversold).

So we are at clearly OMG oversold levels.

Context -  last summer after QE 1 ended and before QE2 started we reached -135 However, he situation now looks worse than last year, but not as bad as 2008.  It’s reasonable to expect a -135 or lower on the MO

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Long Term Outlook (for US Economy)

BEARISH

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Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative Comments Section every day.

The Long Term Outlook has been downgraded because technical support has fallen and above.

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Long Term Outlook (for US stocks)

CAUTIOUSLY BEARISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE