Chucky’s Back

Intimidation

Its become obvious – The main thrust of the right wing in the USA is now Intimidation - “You’re either with us or against us.” This week alone the Intimidation has exploded to new levels.

• Man arrested for “Let The Violence Begin” Death Threat to Senator Patty Murray (D. WA) over her pro health care vote
• Man arrested for serial death threats to family of House Speaker Nancy Pelosi (D CA) over health care vote. “The mother links son’s death threat to FOX news“
• Revealed Massey mining disaster CEO Don Blankenship has spent over $6 million against any judges or state legislators who fought for workers protection in his mines. Massive and serious violations and fines not paid at this non union mine.
• Analysis of influx of violent threats including over 30 governors who received letters that they had “3 day to get out or else” over taxes (sorry there a short ad)
• Go. of VA announces Confederate history month (not civil war history month) and forgets to mention slavery. Imagine Germany honoring just their soldiers, and storm troopers  in WW 2 and forgetting the holocaust.Gov. later apologized. Analysis Listen to the letter written to Black congressman called N—-r and other names over and over in analysis.
• Republican Congresswomen Michele Bachmann quote “I want Minnesotans armed and Dangerous.” This is just one of many quotes. She appeared two nights ago with 1/2 term governor Sarah Palin. From last night Rachel Madow show

Montana has a long but enlightening history of the violence within the Republican party in the comments section of the blog. Is this their “Waterloo”? Now the intimidation, bullying and hatred is growing.  Repulicans are condoning it or ignoring it because it adds to their power/money.

Intimidation is unacceptable, it goes beyond the realm of free speech. It should be prosecuted as assault.

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

Increased, above average volume and moderate decline for US markets. Normally a big volume moderate decline would raise an eyebrow, but that’s the way this rally has progressed especially in the last month.

Investors411 has gone over all the warning signs, but momentum currently is still with the bulls. The McCellan Oscillator is technically in neutral territory so Investors will not add or subtract from positions now. (except or short term trades)

Seeking Alpha is the #1 recommended sight by YOU on stocks. You folks send me more personal emails on stocks from authors featured at this site than any other. Each morning it is one of the site I skim for news –  Their analysis of yesterday’s fall – a larger than expected decrease in consumer borrowing.

Consumer borrowing is certainly a factor, but it sure looks like the rising dollar (see below) and oil prices is more significant to both stocks and the economy. Mantra – Watch the dollar because it is close to a major resistance level – US stocks will move in the opposite direction. (See past Investors411 and below for reasons the dollar moves)

Significant Indexes

• McClellan Oscillator fell s to -6.84 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. – This is still NEUTRAL territory – technically neither overbought or oversold.
• US Dollar – rose  +0.27% yesterday. [Anything over +/- @0.50 is significant.] +o.53 over two days. and over 1% for three days.  The dollar over the last 3 days had a significant impact on why stocks fell yesterday. We are moving close to resistance/breakout level

Positions

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

EWZ (Brazil) Over the years the ETF’s for Brazil, China and Emerging Markets have been Investors411′s #1 investment choice. Although diminished (Down from 25% to 10%) EWZ is still #1. See OVERVIEW section of blog for more. Brazil:

• Benefits from a huge amount of natural resources.
• In 2000 a left wing government took over and spread the wealth so more working class people spent money. Money flowed so the economy grew. It does not have to be a “left” wing government to have greater success what you have to see is a spread of wealth/power from an oligarchy to working people who spend the cash. (there are other factors involved – but time limits explanation.)
• Brazil is less impacted by “shadow financials”
• Brazil has an election in late 2008 and term limits mean they will have a new President – This creates uncertainty and is a negative.
• More in depth economic analysis
• We have to be careful because Brail is going to outperform on the way up and down.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

WHAT’S UP? – Religious terrorism; George Tiller, Randell Terry, Bill O’Reilly, Rachel Maddow, Frank Schaeffer, Army of God, & others – Breakout – Change to CAUTIOUSLY BULLISH – Our positions still outperforming. 

Religious Terrorist Victim

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Dr. George Tilller – photo from Goggle

Yesterday many American newspapers headlined the  death of the pro choice abortion Doctor George Tiller who was gunned down by a pro life terrorist in Tiller’s own church. Some significant points on the Anti Abortion terrorists, their groups and supporters.

• Scott Roeder his accused killer was associated with a group  called – Prayer and Action News
• Another organization Roeder was associated with  - Operation Rescue.
• Operation Rescue leader Randell Terry “celebrated” Tiller’s death.
• Operation Save America is another radical pro life group.
• The Army of God actually praises people who kill anyone associated with performing abortions.
• Radial right wing talk show host Bill O’Reilly (and others) constantly denounced Tiller (28 times) with phrases like “Tiller the baby killer” fomenting hatred toward him
• Frank Schaeffer, author of “Crazy for God”  a former Pro Life leader explains how privately pro life leaders encourage force against pro choice people to change their views. He holds O”Reilly responsible.  His editorial.

For more on this see the Rachel Maddow show video (first 20 minutes) 

Bottom Line -

• We have a whole lot of politically radical mentally unbalanced people in the USA 
• We have a whole lot of guns. 
• We have a whole lot of people who, like O’Reilly, are rewarded for preaching hatred 
• Fear mongering = better media ratings 

From George Tiller to Barak Obama there are a lot of people who are targets.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

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Technicals & Fundamentals 

From Monday “This market wants to rally. It sure looks like we will break out of month long trading pattern this week”. The NASDQ (technology) & Russell 2000 (small cap stocks) have taken over the leadership roll. In longer term bull markets the NASDQ and Russell usually lead.

The benchmark S&P 500 not only broke out of its consolidation pattern it closed above its 200 day moving average. Both technically very bullish signs.

Volume is still not cooperating with the price move. Only the NASDQ saw increased and above average volume. The fact that technology instead of financials has taken over leadership is important. To sustain a rally you need “sector rotation” where first one sector leads then another.  For the last 3 months its been only financials.

XLF - The ETF that tracks financials (mostly shadow banks ) rose +1.06%. Financials had been the leading sector and techs (NASDQ) have taken over that position. 

WTIC - Oil prices again rallied +3.42% at $68.58. Energy related stocks kept the rest of the US markets from loosing more ground. As stated before – “Higher oil prices are an indication of economic recovery, but also hurt that recovery because it means energy prices will rise.”

At some point oil prices gushing higher has to negatively hit stocks. I thought $60 was that level, but was obviously wrong. Perhaps $70 and certainly $80 should bring any stock rally to a screeching halt.

BDI - The Baltic Dry Index measures the flow of goods (world trade).  Still rocketing higher (see chart). This is extremely important because one of the greatest obstacles to a worldwide recovery is the lack of trade between countries (protectionism)

Reading The Tea Leaves -  FROM YESTERDAY – “Looks like we are going to break out of the consolidation pattern to the upside this week… Tech is driver’s seat.” 

We had our breakout Monday and as long as the major indexes stay above breakout levels Long Term Outlook will stay CAUTIOUSLY BULLISH   It’s the 3rd quarter GDP that matters and we will not start seeing results for that till just before Labor Day. So it looks like the summer could be decent.

As stated before, we can go from -6% GDP to zero and markets should rally.  The question or long term problem is what happens after that.

Positions - (See positions section at top of blog for more)

•  EWZ - (Brazil) Waiting for a 5 to 10% dip to reenter this ETF +4.00% yesterday
•  GLD (gold) is one of the hedges against inflation. Down -0.49% yesterday. DGP is a consideration for more aggressive traders – This ETF does @2X what the GLD does
• FXI - our major position here  rose +5.78% yesterday. Last two days have seen a 9+% gain. Moving too high too fast. Short term traders should consider selling into any big rally today and buying back in n the dip.
• GEX - alternative energy - +3.09 yesterday 
• FAS - 3x financials has been working. This position is for traders not investors. +4.55% yesterday
• QLD – 2x what the NASDQ 100 does. Looking for a dip to get back in. +6.04%

 From yesterday – “Mea Culpa - We have cashed in on some of our longer term positions recently (EWZ, XLF & QLD)(26%, 23% & 16% gains) and these stocks are still moving higher.  Looks like the pullback/entry point  is simply not happening. I thought stock would not move higher on $60 oil. I was wrong. Looks like oil will hit $70 and perhaps $80 before impacting stocks “

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING !