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.

.

*****************

.

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

Yankee Bob Is Back

Yankee Bob editorial below.

Bob is an artist out of North Carolina and a big fan of the 2nd place NY Yankees

What kind of democracy does not act on the will of it’s people and instead, actively thwarts the will of the majority ? What kind of Beacon of Hope can we be if on issue after issue the will of the people is ignored and now we have Presidential Contenders pretending that Corporations are people??!!

The people in poll after poll want

• The wars in Iraq and Afghanistan to end.
• More protection for the environment.
• More regulation and inspection for our food,water and air.
• To raise taxes on the Rich and to make corporations pay a fair share
• They favor restrictions on corporate donations in elections and do not share the idea that corporations are people with full Constitutional Rights
• They want the right to collective bargaining and they favor unions.
• They don’t care about the deficit nearly as much as they do about job creation.
• They want Social Security,Medicare and Medicaid extended and defended not taken apart.
• They want the Republicans to compromise and Obama to fight for this agenda not to cave in and compromise it all away.
• They favor choice over restricted abortion rights
• They favor equality for gays, not oppression.
• They favor voting rights over fake cries of voter fraud.
• They don’t want public education cut or privatized
• They favor an intensive commitment to alternative fuels and transportation and energy usage over our reliance on fossil fuels. Yet nothing is happening even though the technology exists
• They want green energy and green jobs but nothing is happening.
• They want jobs not cuts in everything they hold dear.

It doesn’t seem to matter what the people want or need. We are getting nothing. At Nuremberg,Hermann Goering was quoted that the will of the people did not matter at all. The leaders will decide the important issues and then they will use the press and PR to make them think that what we decide was their will.

Goering said – Every country does that. What kind of democracy is this where the will of the people is subverted ? We need a Roosevelt in the White House and Obama is no Roosevelt.

_______________

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

_______________

Technicals, Fundamentals & Analysis

Shorter Term Outlook.

day/days/week

• France, Italy & Spain have banned short selling to avoid a run on banks for next 15 days. This was done in defiance of EU regulators LINK

• Going Postal – US post office may cut another 120,000 – Post office has cut 110,000 over last few years. LINK

• The McClellan Oscillator (MO) fell to -29.61 (-30 somewhat oversold, -60 oversold, -90 OMG oversold). The MO just inched out of oversold territory. There’s wiggle room for stocks to move either way = Neural

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

From yesterday Bottom Line - Lows were certainly retested yesterday. So the stage is technically set for some kind of oversold rally.

Today’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.

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.

• Long Term Outlook Listed Below.  Major long term trend (monthly) lines that have been broken. LINK If the Fed does some type of QE #3 – this also could get us back to cautiously bullish LINK

____________

Look for Paul’s Corner every Tuesday and Thursday

______________

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. 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 mistake to sell and take meager +3% profits. Like a millions of other people who see worldwide economic problems ahead – waiting to buy another dip. Gold dipped dramatically yesterday -2.19%, but at one point was down @4%. The CME group changed margin requirements on gold, and this might be a one day delayed reaction. Also sure looks like GLD had its climax run and could be settling.

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 (sold some yesterday) SDS & TZA (ETF’s that double and triple short the market) as hedges.

________________

Long Term Outlook (for US Economy)

BEARISH

_______________

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 record – 5 years of beating benchmark S&P 500

-

Jobs, Jobs, Jobs

Ever since the 2008 meltdown Investors411 has stated financial and economic conditions are “far far far far far bigger than first imagined.” This statement that has been made many times and is still bolded in the position section of the blog.

Poll after poll (except among Tea Party supporters) have said “To Hell with the Deficit, Its Job, Jobs, Jobs.“ See yesterday’s Investors411 for  a list of historians and economists who make the same case less colorful language.

Immediate Help

• Extend unemployment benefits its “the human thing to do.” Republican Billionaire Mort Zukerman
• Extend unemployment because (the average American unemployment check was under $300 a week in 2009) it will stimulate the economy. These people will SPEND the money and we all benefit because money flows.
• Republican’s know that the longer they can delay a vote on this the less money will flow and consequently the more people unemployment will grow before the November elections. Every day they delay = the more votes they get in November, because they can blame Obama for unemployment.
• It’s certainly hypocritical to endorse the Bush tax cuts on the wealthy. Next vote for unnessesary war funding outside the budget for over 10 years. Then play politics because our own American families of former workers are going hungry.

Longer Term Help

• Infrastructure projects get you the most bang for the buck according to Mort Zukerman (who I usually don’t agree with) and most economists.
• We need an Independent Infrastructure Bank Not one where a powerful Senator like Democrat Harry Reid can take $350 million for a high speed train from LA to his home state of (Los Vegas)Nevada.

Bottom Line – Andy Grove, Intel’s CEO had it right – Globalization has created a major “scaling” problem in the USA. Unless we somehow change that direction the ultimate result is going to be very negative economically for the USA.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Technicals, Fundamentals & Analysis

The High Frequency/Black Box traders (that are focused on the here and now) pushed the markets higher in weak trading. This has been the typical headline for many moons in what’s been a falling market since April. – Lower price highs and lower lows.

IBM was the earnings report of most interest and its down @-4% in pre market trading = Bearish

APPL – Both Monitor and Paul R have warned about today’s earnings report at close.

YOU have pretty much reached consensus that holding a stock, especially in a declining economic environment, is highly risky before its earning report. If you are an insane lover of risk (short term trader) and AAPL continues to drop before earnings – it does take some of the downside risk away.

Ruptured oil well leaking again and possible leaks on oil on ocean floor related to BP oil spill. Best site for this is The Oil Drum = Bearish

Significant Indexes-

• McClellan Oscillator (MO) rose to +21.91 [+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. = NEUTRAL
• US Dollar –  The dollar Friday was basically flat +0.04% [Anything over +/- @0.50 is significant.] The dollar is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, have used the inverse relationship of the dollar as a key part of their trading system. Earning have trumped this indicator for now & we have consolidated for last two days. = NEUTRAL
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also good proxy of China.) BDI is in free fall from a high of @4200 to 1700 yesterday. This is a huge -60% drop 8 weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI rose for the first time in 8 weeks the BDI rose Friday & +0.70% yesterday. At long last the BDI finding a bottom - a bullish sign, but too early to tell.Fundamentally the -60% drop is very BEARISH

Reading Tea Leaves-

Don’t think the negative fundamentals of the BDI (Trade and China) & Europe have been fully integrated into stock prices yet. Sure fells like we are going to have a negative day. But, with Black boxes in control (almost everyone else has fled to safer investments of bonds and treasuries) – you never know.

Positions

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

Updated over weekends Investors411 holds ONE position at this time

From Yesterday – SH – The ETF that shorts the S&P 500 was bought at 51.45. It’s up over 3% now. 1/2 will be sold at 3% profit and a stop/loss has been put in place at what it was bought for. 1/2 of SH was sold for 53.02 for +3% profit.  Letting the rest ride and will sell when conditions on MO near oversold.

No other positions long or short are contemplated in immediate future because MO is neutral. Sorry, there is little to do but sit tight,  be happy you’re almost all in cash, and wait till we get oversold or overbought.

One exception is GLD or DGL (@200% GLD). Its dipping and if it falls to its 200 DMA – would consider buying on fundamentals.

What’s Up - Pakistan  - Are we making the same mistakes? ; Israel/Palastine - an ineviable war and a path not taken; Polls and Avaaza; Markets continue low volume & low volatility. Stocks held onto Monday’s gains; Volume and volatility continue to fall. Bulls with the football

Refugees (Photo LA Times)

Pakistan

Are we going to learn from the mistakes of the past? Right now the Pakistan government is fighting the Taliban in certain areas of Pakistan. This has created a refugee problem of  almost a million people. 

One report shows the same old counter productive results. Each day the Pakistan military announces the # of Taliban killed. Each day in the massive refugee camps full of people fleeing the violence, Taliban allies offer food and help to those whose lives have been shattered. Add to this often unmanned Ameirican planes blast the Taliban and there is significant civilian collateral damage.

There are some signs that things will be different. For now the Pakistani clerics are supporting the government denouncing the Taliban tactics. Also, Hillary Clinton has asked for $110 in humanitarian aid. Perhaps this time the focus will be more on winning over the hearts and minds of the people instead of focusing on body counts. Only time will tell.

Netanyahu  (Photo Google images)

Israel/Palestine

This is a minefield whenever its brought up.  So let’s take Obama’s Notre Dame advice and look for some common ground. A recently conducted poll of Palestinians and Israeli contained the following results.

• 70% of the Palestinians and 65% if the Israeli’s wanted Obama involved in the peace process.
• 59% of the Israeli’s think Obama is trustworthy  vs. 31% think Bibi Netanyahu (Israel’s PM) is trustworthy 

The Bottom Line here is the USA/Obama should get more involved in the peace process. If this situation is allowed to fester another war is inevitable, perhaps within a year.

 Avaaza (Voice) is a multi national group of 3 million members that is trying to get Obama more involved in the peace process. Check  out Avaaza.org. and their add.  Another way, if Avaaza is not your cup of tea, is obviously to directly contact Obama and let him know how you feel.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

-

Technicals & Fundamentals

Markets basically went nowhere and Volume remained light.

In one sense this is bullish – we held onto Monday’s big gains. However, volume has been weak and well below average for the last 4 trading sessions.  Since volume is the chief confirmation factor of a price move, we simply have no confirmation of the price move.

XLF - The ETF that tracks financials (mostly shadow banks ) moved lower yesterday -2.03 in light, but increased volume. The chart (see side of blog) shows light volume for the last 7 days. The XLF has entered a rangebound pattern between 11+ and 13+. Yesterday’s close was 12.04. The downside volume has been greater than the upside volume. This gives a little of the mojo to the bears.  A breakout from this range (@11+ to @13+) will determine the overall markets next move.

Market’s Major Mantra - Again – “If Shadow Banks go up – so will stocks. If Shadow banks go down so will stocks” 

WTIC - Oil prices closed at $60.10. Up +0.86%. Prices had established a range between $54 and $60. We are sitting directly at a major resistance level for oil.  

HIgher oil prices have two sides. Higher prices for oil usually means investors think the economic picture is getting better. Higher oil prices means everyone pays more for gasoline.

BDI - The Baltic Dry Index that measures world trade  broke through resistance last week and is at a new 6 month high. The BDI broke through a major resistance early last week and rose another +1.5% yesterday. Repeat - World trade is critical, because if protectionism/nationalism between countries grows over trade the recovery is doomed. Very Bullish indicator for world economics and stocks

Reading this weeks tea leaves - Our primary forecasting tool – Volume – is not clear, so let’s use our secondary indicators -  

Markets moved higher on good news (India) and the BDI give us a short term bullish bias.  Resistance level of 13.08 on XFL is the breakout area to watch. Any move above this is very positive for bulls. Another important breakout level is 930 on the benchmark S&P 500. Right now the bulls have the football.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING !

WHAT’S UP – A Republican defection: Republican’s embrace the far right and shrink – Specter & Sebelius; First US death from "Swine" flu – Your comments- "The Critic" and Abby Gold. GDP comes in worse than expected for 1st 1/4 = -6.1% ; Shadow Baks stocks slipping: Trade (BDI) between countries start to slip again – swine flu?

Senator Arlen Specter -Alex Wong/Getty Images

Republican Defections

Republican Senator Arlen Specter (PA) is switching from Rep. to Dem. Here is some Links – WaPo , & Politico

BottomLine – It’s not just Specter and the fact that he brings the Democratic Party closer to a veto proof 60 vote majority. (It is now 59 votes and Franken (Dem) looks like he will win in MN.)

What’s happening is as the Republican’s become more extreme (embracing the far right – example Limbaugh) they are loosing supporters.  Most polls show Democrats gaining slightly or remaining flat. Independents are the group that’s growing the fastest . Yahoo story

Kathlene Sebelius

When it Rains it Pours – Republicans

Republicans voted against putting in $900 million for flu pandemic protection into the stimulus package. Big mistake. Obama now is proposing a $1.5 billion supplemental to handle the growing crisis.

Republicans have also blocked the nomination of KA Dem. governor Kathlene Sebelius to the top health position and a whole lot of other positions in heath care remain unfilled. So we have a potential major crisis and the party is caught with its pants down. Tides go in and out. But, the tide is certainly going out for Republicans now. Sebelius finally gets the job CNN story link

First US Death from Swine Flu

A 23 month old child in Texas has died from the flu – The first US casualty. NYC has the most cases and the disease is being transmitted by humans. Link to CNBC story on Flu

Both "The Critic" (Who is traveling from a foreign country to the USA) and Abby Gold have very relevant  comments.  They stress the over hype of the media and plummeting pork prices. See comments section on right side of blog. (photo credit – AP)

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Technicals & Fundamentals

USA GDP Numbers for 1st 1/4 = -6.1% (breaking news 8:30 EST) Worse than expected number. But this is not a forward looking statistic. There was better than expected consumer spending numbers in this report.

No real movement yesterday in US equities. The fact that US indexes were flat despite the possible flu pandemic news is bullish for stocks .

Possible Flu Pandemic (See yesterday’s Updates)

From yesterday – As always – don’t make huge massive moves (all in all out) – But  both FXI and EWZ have had a great run over the last six weeks and some protection seems prudent .

If the outbreak continues to grow - Link to what happens to Oil prices and Commodities

———-

XLF - The ETF that tracks financials (mostly shadow banks ) rose -3.09 % Friday in decreased volume .  Financials have lead this rally and if they  collapse so will almost all other sectors (see Positions section of blog on XLF)

The XFL is consolidating between @ 9.4 & 11.3. XFL closed at 10.43 .   9.4 and 11.3 is the support  & resistance levels all Wall Street is watching.

BDI – The Baltic Dry Index (measures trade) has started back down again after establishing a technically bearish lower high. BDI down - 2.67 % (see chart at side of blog) Too early to call a trend, but troubling.

Fed meets today . Release of interest statement at 2:15 EST today – No dramatic changes expected.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTIN G !