Investors 411 Blog

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Health Care Debacle

There’s something in human nature that loves it when you can say I told you so.  Health Care reform attempts are crumbling and just like the greedy Wall Street Shadow bankers Anthem Blue Cross of California can’t wait to raise prices 39% on March 1.

Everyone knows that our long term debt problem is centered on a massive growth in military expansion and health care. Obviously unsustainable if you keep cutting taxes. The problem in health care is we spend far more on health care than we get in outcomes There are over two dozen industrialized democracies who pay far less and live far longer.  There may be problems in their heath care systems, but nobody’s voted to go back to a system like the USA’s.

One wonders how much of this 39% increase did Anthem use to defeat health care reform.

71% of Americans – Palin NOT Qualified to Be President

Latest WaPo/ABC News Poll shows Sarah Palin is NOT qualified to be President.

But,  according to those of you who comment on this blog – Is Barak Obama Qualified to be President? – Yes, this blog has been tough on Obama, but does his latest attempt to “begrudgingly” support  big bonuses on Wall Street in the very companies that help cause the meltdown  bring his credibility into question?

Paul Krugman – ” I’m with Simon Johnson here: how is it possible, at this late date, for Obama to be this clueless?“

Greece

The whole world waits to see what’s going to happen with Greek debt. Thee is a big meeting today in Europe. As far as stocks are concerned the sooner this is settled the better.

Greece like the USA and many European markets ran virtually “unregulated free markets”. Credit Default Swaps are still being traded on the bonds that Greece uses to finance its debt.  Someone has to pay for Greece financial system going overboard. Once again the end result will be Socialism for the rich and the working poor will feel the heat.

Dubai had the UAE to bail them out and Greece has France/Germany.  But there are lots of other countries out there who will feel the aftershocks of 2008 USA “unregulated free market” meltdown. Once again socialism for the rich and capitalism for the poor who pay and pay and then have their children pay and pay.

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KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage	Volume
Dow	-0.20%	down
NASDQ	-0.14%	down
S&P 500	-0.22%	down
Russell 2000-	-0.23%	-

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

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

Basically a nothing day.   The whole world waits to see what’s going to happen with Greek debt. Thee is a big meeting today in Europe. As far as stocks are concerned the sooner this is settled the better. We have a concept, not a specifc plan.  When a plan comes expect a short tem rally.

Greek bailout – Short term good news, but long term bad news. The more the Euro countries have to bail out the lower the Euro goes. Therefore relatively the dollar goes up. This costlier dollar makes our goods cost more in Europe and hurts US exports.

Oversold market’s natural direction is up.

Significant indexes – Forecasting tools for market direction

• McClellan Index fell to -32.47 =Moving away from Oversold. We’ve passed -60 or oversold levels twice recently. When the  McClellan Oscillator gets past those levels its a signal to buy.  The more we are over -60 the better at least a short term buy will come out successful. -32.47 is a better entry point than +32,44, but not as good as -60 or higher and beyond.

Positions

The  Positions Section has the latest buys and sells – Revised positions last weekend) – These are positions I actually own

Thinking about nibbling on ETF’s & stocks (see yesterday) as long as McClellan stays in the red.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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

——–

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

——-

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

——-

$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