Obama’s Speech

Here’s today’s lead editorial in NYT Obama needs to  “follow through — with more energy and dedication than they have shown so far.” The NYT was one of the best reviews I saw others were a lot harsher. Bluntly – great speech, but where’s the beef?

The rock and the hard place – So far BP’s stock has lost @50% of its value. You push these SOB’s too far too fast and the company disintegrates leaving the taxpayers to pick up the bill.

America’s Debt

Who is the biggest holder of America’s $13 trillion dollar national debt? Hint they hold over $5.2 trillion of it. Slide presentation on Huffington Post was a big surprise to me. The 15 biggest holders of US debt-Link here

Who holds 40% of the national debt and what does that mean?

Tea Party

Tonight at 7:00 PM EST Chris Matthew’s will have a documentary “The Rise of the New Right” on MSNBC. I suggest that you watch it on line or see it live.

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!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

Another low volume major move for US indexes that crushed significant resistance levels for several of the major indexes = Bullish.

As stated before, volume has NOT been a factor in trading for many many moons.

From yesterday – “FXE (tracks the EURO) is the ETF to watch along with Spain’s EWP”  FXE was up a very significant +0.97% & Spain was up @ +5.75% along with Italy. Spain and Italy are the two largest of the European PIIGS + Hungary nations that are having debt problems.

The MO has reached Overbought territory = Bearish

The Baltic Dry Index BDI kept falling – It’s dropped well over 25% of its value in the last month. Since the BDI measures shipping rates this fall is NOT good for world trade, economics. The BDI is often a lagging indicator,. For stocks = Bearish

Significant Indexes

• McClellan Oscillator rose dramatically to +79.56 [+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. You have to go back to March of 2009 to find a higher MO. Clearly  Oversold = Bearish
• US Dollar –  The dollar again fell significantly -0.82% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important.For stocks = Bullish

Reading the Tea Leaves - The HUGE institutions that control 80% of the market ran wild yesterday. Their black box computers all gave a buy signal in front of what’s called a “quadruple witching day” on Friday – This means lots of options expire so there’s usually lots of volatility and trading. Except few outside the Mega Sharks (huge institutions) are investing or trading- so volume has dried up but not volatility.

The Mega Sharks seemed to have decided that Europe is going to be OK & will rally like the US did when Obama took office and the Fed flooded our shadow banks with $$$$. Back then the MO pushed up over +100 and stayed above +20 for 2 months as stock continued to rally.(see chart) Its now at +80.

A similar situation with the EURO could be happening. Don’t let American self centerdcenternessness get in the way – Europe total GDP is slightly larger than ours. We had another day where treasury auctions in Spain & Ireland went well. Just like they have had in the USA for over a year. Therefore, what happens there matters.

Even though we are now clearly oversold, we could see a sustained rally (couple months) develop. The dark cloud in all of this is the falling BDI.

Personally, what’s happening fundamentally does not justify, the rally. It’s Irrational, especially with falling trade (BDI). But mega giant sharks/institutions control this market and what anyone thinks outside their giant computers is irrelevant. The mega sharks control of stocks are a quantum shift from old trading patterns and rules. (best examples – volume is irrelevant & huge volatility in currency markets)

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekend

Sold 1/2 of UUP (ETF tracks dollar) for small loss at 25.08 -2% Will probably sell rest today

Sold VCI at 38.00 for +15%

Traders – +80 on the MO is the signal to sell what remains or short any rally.  See Positions section for some ideas.

Investors – Some of YOU commented (see comments section of blog) that you sold into the rally. Good idea. I’d sell into a rally today also.  No one went broke taking profits. When the MO dips down to @+30 you can nibble.

From Yesterday – “Not the technical breakout we were hoping for. Let’s wait till the resistance level actually falls to change the outlook. Maybe today .” The technical levels fell and the long term outlook = NEUTRAL

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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Obama, Obama, Obama

• The Obama administration is responsible for us still being in Afghanistan & Iraq. He is the commander in chief (see yesterday’s Investors411).
• His administration is also responsible for the weak financial reform coming out of congress. All Obama had to do it to throw strong vocal support Kafman/Brown, Volker amendment, Lincoln’s derivative bill for them to pass.
• BP, is responsible for the spill, as are a decade of lax rules and enforcers. But its long past time Obama, the commander in chief, did more than talk tough and blame BP. Yankee Bob has editorial on how expensive fossil fuels really are.

Solutions, Solution, Solutions

• John Sovjani in comments sections comes up with some innovative fiscal solutions in comments section of blog A gas tax and legalizing/taxing pot are among his choices.
• Bob Sadinski’s (AKA Yankee Bob) editorial focus is to change more rapidly to alternative energy because of the real environmental costs of fossil fuels. (see link above)

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!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

Stocks roared out of the gate, but fell in the PM as those huge institutions with those giant super computers all sold.  The translation here is – the bulk of all trading is being made by institutions with complex trading algorithm. They take hold of US markets, usually after 2:00PM and determine direction. That direction was down into close = Bearish

Somehow the rumor/news got out that China was considering taking $ out of the Euro. The announcement  was an absolutely dumb move if you’re the Chinese and are doing this. Probably some large entity that is short the Euro or long the dollar created or contributed to this. Markets still very sensitive to negative European news. China has denied this. = Bearish

The McClellan Oscillator sent out a strong bullish signal yesterday. From Investopedia – “Conversely, when a bear market is still declining, but a smaller amount of stocks are declining, an end to the bear market may be near” Yesterday the financial channels (Bloomberg & CNBC reported a lack of breath and volume behind the PM decline)= Bullish

We’ve not had a bear market, but @ a 13% correction. One technical sign that it is coming to an end does NOT make it so. But the MO has been below 60 for a long time and due for a technical correction or a short run higher.

Fundamentals haven’t changed! But we are long overdue for the McClellan Oscillator to move above -60. A technical bounce.

Futures are up in US and European markets higher. = Bullish

Significant Indexes

• McClellan Oscillator rose to -64.99. [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is still OVERSOLD territory, but we are now out of WAY oversold territory. How the MO works. Yesterday was one of those strange days where the markets went lower but MO went up.= Bullish.
• US Dollar –  The dollar rose  a significant +0.62% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. This broke its major resistance level and the dollar is now trading at year + long high. Foe stocks (especially US stocks) =  Bearish

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own

Sold last 1/2 of SDS at 35.50 near market close. There was a +5% gain on 1/2 and a 0% gain on 1/2.

Traders – Bought 1% IMAX at 16.70 & DGIT at 42.26 near market close. Reasoning – These stocks were rallying into the close, markets were falling, Monitor (see comments section of blog announced DGIT and SNDK had made new year long highs ) and these two stocks are clearly out performing well over 98% of the market even though they did not hold onto their breakouts. DGIT & IMAX rallied into close as markets fell.

Still long 2%IMAX, 1% ESRX, 2% DGIT and 2% VCI.

I hope IMAX, ESRX DGIT & VCI turn into long term gains, but fundamentally I seriously doubt it. If lucky will take profits (sell 1/2) on any gain of @5% with DGIT. Also will sell 1/2 VCI (dropped over 4% yesterday – should have sold 1/2 when stock was up over 5%) & IMAX in major rally.

Still waiting for dip to buy EUO. If markets rally strongly today.

Traders Investors411 also bought FAS at open and sold it when it fell back to price it was bought for. (actually lost less than 0.4%)  Caution this is a very volatile (3X financials) stock.

Traders – Trading strategy – Investors411 is taking @5 % profit on any recently purchased position and letting the rest ride. Investors is then putting a stop/sell order on the price it was bought for.  In volatile markets the only thing to do is make short term trades. Will sell 1/2 of  IMAX, VCI, and/or DGIT if criteria is approached at near open. Selling into rally

Investors – Wait for trend to establish itself.

NB – Friday’s Investors411 will be minimal and published early.

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Mad Hatter from Tea Party

Bravo Arizona

The most under reported election story yesterday-Arizona, like most states is faced with a budget problem, faces massive cuts especially in “education, police, health care and other services”  Arizona, is a conservative state.  They voted to RAISE TAXES by an overwhelming 64% Story LINK

Tea Party

The most over reported story by American media – Kentucky. Raul Paul (Ron Pail’s son) and a Tea Party favorite won election and beat the Republican establishment candidate. Paul and the Tea Party was all over the National media and you heard almost nothing about the Democrat winner Jack Conway. Despite the following facts -

• Both Conway and his challenger gathered more votes than Paul in this traditionally Republican state.
• 35% more Democrats voted than Republicans in KY.
• This was a close race and they usually get more attention than those with easy victories

The problem is the Tea Party’s ability to have American media be their lapdog.  This media bias is a HUGE problems for Democrats.

Oil Smothers Coast

Headline Huffington Post headlines and has photos

Investment Analysis of EU Crisis

Below under Positions

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!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

Both the Dollar and the US markets fell = Bearish

Increased, average, volume on down day = Mildly bearish

$9 billion was taken out of mutual funds last week = we are loosing the retail investors = Bearish

Rally into close – probably due to dollar falling and Fed minutes suggesting growth = Bullish

Strongest sign = The dollar fell significantly & stocks did not end up positive = BEARISH

From Yesterday – All of this is about the European stability and survivability. If this EU falls so does the worlds largest economic zone. (it’s slightly bigger than the USA) The good news for Europe is the lower the Euro goes the better it is for their exports

Significant Indexes

• McClellan Oscillator fell to -105.37 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is OVERSOLD territory. The lower this oscillator go the more oversold markets become. =  Bullish
• US Dollar – Yesterday the dollar fell to $86.28. Down a significant -0.84% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important . The area around $88 is a major resistance area/ multi year high for the dollar. Obviously some entity(ies) are stepping up to buy the Euro. (see analysis below) Looks like this will stabilize the Dollar/Euro relationship at least for now. = Bullish

There’s more Bearish than Bullish above and futures are way way down. We have FEAR on Wall Street.

Time to bring out the Old Lost in Space Robot and Shout DANGER WILL ROBINSON DANGER DANGER The 200DMA of the benchmark S&P 500 is going to fall at open and that should bring on a lot of long term investor and programed trade selling.

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own

Have not had a chance to update the positions section of blog.  No buying & selling yesterday.

We moved deeper into OVERSOLD territory, McClellan now at -105.37 = The momentum on the downside is strong. We are again near low two weeks ago of  -123 and the Oct. 2008 meltdown low of @-130

Stopped out of the rest of SNDK yesterday.

Yesterday IMAX took a -3.79% hit in well below average volume. If it has a similar day today it will be close to it’s 50DMA and a buy the dip opportunity

Analysis of EU Crisis & Investing - When the McClellan Oscillator reached a low of -130 in 2008 we stood on the verge of a meltdown or collapse of the banking and insurance companies all across the world. People were already lining up and many had taken uninsured $ out of banks on that Friday.

The question is are we on the verge of a collapse of the European Union? The crisis, of course, is all part or a continuation of the 2008 meltdown (over leveraged shadow financial structures) The EU was created to insure the prevention of war (WW2), to stand as a block against the Russia, and be an economic power in its own right. It’s combined GDP is greater than the USA. If this Union were to disintegrate the world’s economy could easily suffer a meltdown. If European banks meltdown and the whole worldwide opaque, over leverage banking system  could again stand at the edge of a cliff.

If you think the EU will dissolve or be irreparably damaged, the fallout will be HUGE across the world – Probably a second Great Depression. In this case the McClellan will go below -130

My read of the tea leaves is this will NOT happen.  Central European banks and Central banks will print whatever money it takes and inflate their way out of this like the USA. Bailouts have already started. Yesterdays rally in the Euro and decline in the dollar was probably due to European Central Bank (maybe others too) buying the Euro. But it will get ugly before it gets better.

Therefore, buy the dip, is still the option Investors411 will use it.  However, taking profits on UWM & probably loss in ICON at open or on any rally today.

Short term there is just too much downside momentum and we are in danger of braking 200 DMA on benchmark S&P 500. This trumps everything else!

If we have a climax sell off, will nibble on dip.

Any close below the 200DMA on the S&P 500 will change outlook to CAUTIOUSLY BEARISH We came close yesterday.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

I think it was Pogo in the old Walt Kelly comic strip who said it first “I’ve seen the enemy and it is us.”

It Just Gets Worse – Gulf Oil Spill

The NYT is headlining that the size of the spill has been seriously underestimated (Perhaps 4 to 5 times larger) & drilling was allowed in Alaska/elsewhere without permits

Whistleblowers, BP hiding data, BP not following regulations, a giant oil  & More from Big Oil Spill Page

Perhaps, the most alarming or sensationalized news is in the following from Dan Froomkin at Huffington Post -

A new analysis of sea floor video indicates that nearly 70,000 barrels could be gushing out every day, NPR reports. That figure is at least 10 times the US Coast Guard’s original estimate of the flow, and “the equivalent of one Exxon Valdez tanker every four days.”

Bottom Line - The technology may be revolutionary and work, but human error and greed always are factors not entered into the equation. This does changed the balance on everything from drilling off shore to nuclear power for me. (more later) You just can’t mess with Mother Nature. The only way to ensure people play by the rules is to have a strong, (if it has to be) big, tough government that enforces these rules.

If our politicians protect shadow financials or any shadow company (BP) – they should be voted out of office.  All we have now seems to be crony casino capitalism.

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!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

Stocks moved significantly lower in weak, below average volume. Because volume was weak = NEUTRAL

From Yesterday - All week long the 50DMA of the benchmark S&P 500 has been mentioned as a key resistance level = RED light for markets.

What happened yesterday - Stocks again bumped all day against the 1173 S&P resistance level. It became evident that the S&P 500 was going to not break out. At 3:00 PM EST  all the major institutions came in and sold driving the market down toward its key @1150 support level. S&P ended day at 1157.44. Closing at low = Bearish

If we close below 1150 today = Bearish Therefore 1150 is the line in the sand to watch.

The increased size of the Gulf oil Spill is going to be along term negative on most stocks, if the new analysis turns out to be correct = Bearish

European stocks down @ 2% this AM. = Bearish

Shadow banks seem to be winning the financial reform battle = Bullish

Significant Indexes

• McClellan Oscillator fell to -29.08 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is NEUTRAL territory.
• US Dollar – rose +0.63% yesterday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important Dollar Rules because it broke out to new high is a significant move. = VERY BEARISH
• The BID – Kept climbing. It has broken out to a new 5 month high. The Baltic Dry Index measures the cost or flow of goods/trade between countries. This is positive for export countries like Brazil and China and commodities. Goods costing more means trade is increasing. One analysis of this is shipping costs are rising because of Gulf oil spill. = Neutral

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own

Sold ( took profits in) 1/2 of Investors411 positions in TYH yesterday when it became evident that we were NOT going to break out in the S&P 500.

Time to take some profits, especially if you did not yesterday. (no one goes broke taking profits)

• The dollars breakout move yesterday is very bearish in the long term.  The dollar is rising because the Euro is falling.  Most analysts I’ve heard expect this breakout to continue.
• The McCellan Oscillator is in NEUTRAL territory and has a ways to go before -60 or even lower. It did get down to -123 last Friday . Do not believe  we will reach those levels again soon. But, the dollar is acting like an anchor on any stock advance.

Traders sell at open and/or wait for a rally.

Again the major tipping point is a drop below S&P 1150 support. Perhaps it will hold, but if the dollar keeps moving higher the best US stock will do is move sideways.

China FXI is going nowhere.  As mentioned earlier this week it is a canary in the coal mine stock.  This canary over the last few days did not rise as fast as US stocks. Therefore it has started to chirp. FXI is one position Investors is going to sell today.

Yesterday @ 5+% was taken off the table (see Positions) & will do another 5 to 10+% today.  That total will be up to 1/2 of what was recently invested.

We can buy back in when the McClellan reaches a lower level. Obviously I could be wrong, but the dollar’s move is significant.

GLD is looking good to buy on dips.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

AP Photo

Financial Fraud

Few in Washington get it. Senators Kaufman & S. Brown do – (see past Investors411) Shadow banks and individuals/homebuyers entered into FRAUD The enablers of this fraud were the greedy, over leveraged, shadow banks. The very clowns/idiots/money grubbers in Washington ripped apart legislation that had kept us safe from this happening since the Great Depression are now trying to make everything right again.

Stupid Democrats - What the American Public Gets is the FRAUD – The liar loans, the bank misrepresentations, the crooked individual who entered some of these transactions. Now that you can debate & vote on this – pass the Volker rule, Kaufman/Brown legislation and get tougher on all your proposals.

Simon Johnson has another excellent editorial on this that you should post on your Facebook page, Twitter or email its URL to your friends and politicians.

Catastrophic Oil Spill

This environmental/economic disaster keeps getting worse each day

• NYT headline The continuing oil spill has reached the Louisiana coast
• NPR headline The environmental disaster could be worse in size and/or impact than the Exxon Valdez
• BP stock has lost  $26 billion in equity and fell -8.34% yesterday alone
• We all mourn the loss of life of those who died on the platform

Oil is still gushing from the break and it will take “months” to cap this. We can only guess the impact from Texas to Florida on the beaches, the economy, the environment and the wildlife that this will have.  Remember, the Exxon spill happened in unpopulated  Alaska.

Bottom Line Politically  -  Drill baby drill is dead

I’ve got oil on my face – Hope you’ve been checking out the commentary section There were 17 posts on this, financial reform, stocks and more.

I’ve long supported a comprehensive approach (like Obama) to energy as long as the more environmentally alternatives came first. Why – Simple economics- the growing energy demands of the world. From emerging markets to the USA energy demands are increasing and the supply can not compete with the demand.  We can’t build, far more acceptable, alternative energy alternative fast enough to keep up with the demand.

Yes that means I support nuclear energy. But but as part of a comprehensive approach we need enery sources to come on line quickly or we are going to be fighting wars over them.

Example – In my home state the Cape Cod wind farm after 10 years and Kennedy’s death has finally received national approval. But there will be perhaps years more litigation before it gets started.

We should absolutely be investing far more in alternative solutions and strongly against coal because its the least clean source.  A year or two ago I set up a chart on carbon emissions vs fuel sources from either PeakOilNews or the Oil Drum. Will try to find it again.

I reasoned after Katrina these oil platforms were safe – It sure looks like I was wrong.

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!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Tech stocks which dominate the NASDQ rose yesterday in increased above average volume. Techs and small caps are usually the drivers behind any long term rally = Bullish

Good gains for S&P and Dow but in weaker volume. Lighter volume melt ups are the new trend.= Neutral

The big news for weeks/months will be how much the the Greek debt crisis spreads. A plan will be unveiled this weekend Now, markets are rising on this bad news. That’s =Bullish

Dollar falls back from breakout into trading range. Short term= Bullish

McClellan near zero (but it does have room to run higher till it reaches overbought territory) = Neutral

We seem to have a stampeding bull market. Monday’s have been good for stocks for the last 3+months. So traders should again run up stocks again today. Buy the dip. Short term trades in TYH & UWM could work on a dip.  Lot’s of Bullish signs out there

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On individual stocks – Check out Paul R and some others comments to the right. Do your homework if your particular growth stock has dipped down enough it might be time to buy.

The Trend Lives, but the Market is Tired editorial – Our McClellan does NOT show tired yet - always good to get second opinion.

XLF – Whose afraid of Financial Reform? Certainly not the big shadow banks that dominate the XLF (the financial ETF) It gapped higher and ended the day a huge +2.29% higher.  They have the money, power & lobbyists to squeeze what they want and get a weak financial reform package out of congress. Investors & traders in the XLF are basically saying financial reform is a joke. One caution volume diminished from previous two days.

Significant Indexes

• McClellan Oscillator rose rose to  -1.74 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is close to the middle of NEUTRAL territory
• US Dollar – fell -0.39% yesterday.  [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules. Is very important.  Dollar closed at $82.01. The breakout of the trading range lasted one day  and the USD has fallen back from its new high into its old trading range. Rising dollar almost always = falling stocks.

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) - These are positions I actually own

IMAX reported earning yesterday. While the earnings were better than expected, traders “sold on the news.” This is a common occurrence especially for a stock that has move up a lot in the last few months. But even more importantly a stock that moved up 15 to 20 % in the few weeks directly before earnings. Therefore, a great earning report was already built into the price and traders “sold the news” (a Wall Street term). IMAX was down a lot more, but ended the day down -2.86% on a day all major US indexes rallied.

Bottom Line – holding a stock through earnings involves risk especially one that has run up higher before its report (gains 5+ % in the two+ weeks before it reports.) Obviously the bigger the gain the more the risk.

NB – Investors411 makes a critical difference between longer term investors and short term traders.

GLD -ETF for gold.  Investors411 has owned this and the ETF that does 2X gold prices) in the past.  Gold has broken out to a new high and will be buying it on dips. (more later)

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING