It’s on its way

YOUR Stock List #5

• Four times, together, we’ve  roasted and toasted our benchmark S&P 500 LINK (scroll down for results)
• Four times YOU sent in entries for YOUR stock lists
• Four times  Paul & I have gone over them and picked potential winners (we added a few too)

Now its time for YOUR stock List #5 (YSL #5) and we think its the best yet.

Tomorrow in Paul’s Corner

YSL #5

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• Warren Buffett on Charlie Rose LINK – If you can hold the US debt ceiling hostage, you can hold it hostage to anything from abortion to the latest war.

• Warren Buffett in NYT “Stop Coddling The Super Rich” LINK

One early poll means almost nothing but Rasmussen Poll: Rick Perry 29%, Mitt Romney 18%, Michelle Bachmann 18% and Ron Paul 9% But it does raise an eyebrow.

Perry is a larger than life “gun toting, flag waving, bible thumping, Bernanke bashing, Tea Party loving, patriot.”

If I were Mitt Romney I’d be really concerned that if Bachmann of Paul drops out their vote will go to Perry and not him.

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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

• A weak volume rally followed by a weak volume decline – Just the kind of situation HFT’s in the past have used to extend a weak volume rally. News out of Europe did cause a drop, but interday we rallied off the lows.

The 3 Legs – Europe, USA & Emerging Markets

• Never forget our mantra - High Frequency Traders Rule US & European Equities- These entities make their decision in microseconds and are not based on long term trends. They account for low volume rallies and other atypical technical market behavior.

• The McClellan Oscillator (MO) fell to +9.99 (-30 somewhat oversold, -60 oversold, -90 OMG oversold)( +30 somewhat overbought, +60 overbought and +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 and mojo is with the bulls. = Neutral

• Reading The Tea Leaves – Short term momentum still with the bulls. Fed’s low interest rates till mid 2013 and relatively low levels of the dollar mean profits for globalized American companies should hold steady. Momentum still with the bulls till we reach oversold territory in the MO

Longer Term Outlook

weeks, month, months

• Repeat - May 20th forecast still stands. The May 20th summer forecast has come to pass and now we wait to see the Fed’s next move.

• The Fed’s promise of low interest rates through 2013, has brought the Long Term Outlook for US Stocks close to NEUTRAL. Any announcement of a type of QE #3 would push the outlook even higher.

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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.

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 dip. Mea culpa – The small two day dip was a decent  entry point and I missed it. Why Gold

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 about half 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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The Fed’s promise of low interest rates through 2013, has brought the Long Term Outlook for US Stocks close to NEUTRAL

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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

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.

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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

• 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

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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.

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.

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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

When people make mistakes and do NOT pay for those mistakes, then keep profiting from those mistakes, they tend to make the same mistakes only bigger and bigger and bigger

The US is digging an ever deeper economic hole.

To compensate for the loss of revenue caused by globalization (Jobs and profits going abroad) greed and an over extended military empire  we created an over leveraged, under regulated, shadow banking system of too big to fail banks.  This resulted in the 2008 meltdown, the start of the Great Recession and the loss of trillions of dollars of revenue.

Virtually nothing has been done to punish any banksters or, even more important, reform our financial industry. Without a competent regulated banking system real long term economic growth is impossible.

The problem keeps getting bigger and bigger and bigger

Wisconsin

Wisconsin vote LINK. The Democrats won 2 of the 6 recall elections of Republicans yesterday. Unfortunately they fell one win shy of winning a majority in the Wisconsin legislature

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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

• Again a repeat – What stocks need is a fundamental catalyst, to give potential investors hope. The Fed is the strongest entity out there to halt the slide. The Fed gave us a promise of ultra low interest rates until mid 2013 (two years) This AM GS sees Fed resuming QE #3 The outline of the 15+% summer meltdown was forecasted on May 20th

• CAUTION - Even more mom and pop investors have left the markets in the latest meltdown. High Frequency Traders rule even more than before. This is what is creating the massive interday volatility (especially in options). Don’t be fooled into thinking these are normal investors getting back into the markets – its HFT’s taking a an ever bigger and bigger share of US equity trading.

• The McClellan Oscillator (MO) From yesterday – chart fell to to -142.58 (-30 somewhat oversold, -60 oversold, -90 OMG oversold). This is the lowest the MO has ever been. = Bullish Yesterday the MO rose to -76.99 This is now an oversold market. Technically, we are not at record oversold levels, but more normal oversold levels Not as Bullish, but still = Bullish

• Reading The Tea Leaves – Best read of the Tea Leaves is for some more short covering early. This should send oversold  markets higher. There are a mountain of short positions still in place. Yesterday US equities had an enormous range. I’m sure the HFT’s will again pump and dump equities adding to volatility.

Bottom Line - When we get out of oversold territory (See MO) we will need another solid fundamental factor to move stocks in the short term. The low interest rates till mid 2013 can only go so far.

More often than not lows are retested before a rally.

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.

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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. Up  an irrational +9% yesterday along with AGNC the other high dividend stock listed in POSITIONS Section of blog. Many of you commented on this yesterday. You nailed the reasons for the advance, but remember HFT added to the gains.

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 profits. Like a millions of other people who see worldwide economic problems ahead – waiting to buy another dip.

Disclaimer - Personally I own  a group of dividend stocks including NLY. I have placed puts on all 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.

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Long Term Outlook (for US Economy)

BEARISH

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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

.

Republicans Walk Out

Eric Cantor (Republican House majority leader) has walked out of the deficit negotiations.

Reason – he will NOT compromise on tax cuts for the richest Americans

From the Wall Street Banksters to Hedge Fund Billionaires we have seen a huge transfer of wealth in the last 30/40 years. Peter Whoriskey from WAPO is latest to come out with data. So lets mix his data with Robert Reiche.

• 1975 – The top 1/10 of 1% = 2.5% of US income.
• 2008 – The top 1/0 of 1%= 10.4% of US income. (They earn over 1.7 million a year)
• Today the top 400 richest Americans pay a  only a 17% tax rate.

Wall Street Banksters,(derivative investors/players that caused the 2008 meltdown) Hedge Fund Manager  and uber wealthy  who invest in the High Frequency Trades (They make $ off the imbalances in trades) and others pay only 15% on their capital gains tax.

The uber wealthy are protected by an army of lobbyist in congress and obviously Eric Cantor and Jon Kyle.  It also sure looks like the uber’s have a piece or perhaps all of Obama on their side too. He sure hasn’t stuck his neck out and lead in  this default crisis.

China

SHIBOR The highly volatile short term interest rate levels in China have come down, but the longer term 1 year rate is steadily rising.

The following is Good news for Europe (depending on your point of view) –  China working with IMF on Europe

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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

• Major News of morning - Two Italian banks Intesa Sanpaolo and Unicredit have had their trading halted after falling about 8%.  Obviously bad news – how bad is in the details.

• The McClellan Oscillator (MO) chart fell to +5.23 (below -30 = somewhat overbought, above +30 somewhat overbought ) Repeat - The MO has been unable to get above the +30 to +50 range for 6 months.  So we have rally room to till MO gets to +30 to +50 range. = Neutral

• $USD The Dollar rose  significantly +o.79% yesterday. (+/- 0.50 is a significant move and the dollar is usually a contrarian indicator)  The trend since May 1 is bullish for dollar and bearish for stocks. Another rally day like yesterday and the 5/1 rally will have a new high. For stocks short term trend = Bearish

• Reading The Tea Leaves - Shorter term – From yesterday – MO now neutral, and momentum with bears. Wrong about momentum High beta stocks were able to rally in increased volume, despite a significant move higher in the dollar. Most high growth/beta stocks make their $ abroad and a stronger dollar cuts their profits. When beta stocks rallied despite the dollar’s rise it showed strength – For now the bulls are back

• Our MO chart has been very accurate in predicting short term tops and bottoms. So tea leaves say wait for an oversold or overbought levels to be reached before acting.

• Reading The Tea Leaves - Longer Term - No change – See May 20th blog.

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Positions

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

NLY - Annaly Capital Mgt. Ultra high dividend stock. Bought on a dip over a month ago.

TZA yesterday opened up a massive +4% higher and was way too high to buy.

Repeat longer Strategy remains – I’ll wait till the MO gets to at least +30 to short stocks

• Short any rally - Investors411 will use TZA (3X short small cap stocks) and SDS (2x short S&P 500 more conservative).
• Sell long positions into any rally -

Disclosure - I own NLY &  a group of dividend stocks which I have used some short ETF’s to protect. – I buy all stocks mentioned in the hypothetical Investors411 portfolio.

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

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The Fed has moved from an expanding money supply to a neutral – No QE #3. Congress is threatening to contract the money supply. “We [the USA] need to grow at this point more than anything else.” Investors411 outlook will remain negative on the USA unless the Fed and/or congress return to more pro growth policies and/or Euro defaults are solved.

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Longer Term Outlook

Neutral/CAUTIOUSLY BEARISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

Mark Haines

YOUR Comments

Once again YOUR Comments is perhaps the most interesting/informative part of the Investors blog. Everything from investment concepts to political editorials/trends is covered there.

Of special note is a tribute to a tribute to legendary financial reporter Mark Haines who died yesterday started by JS

Link Here (scroll down to read comments)

Today’s from comments has another editorial from Yankee Bob.

Never in my wildest dreams could I envision a Party that is as anti-American as the GOP is They have served themselves up for sacrifice IF AND ONLY IF THE DEMS CAN ACT AT LEAST A LITTLE LIKE THE PARTY OF FDR ….

1. Raising taxes. They won’t raise taxes on the rich or corporations but they WILL raise taxes on services they hate like Abortions Why can’t we have a minimim corporate tax that they can’t squirm out of or why can’t you tax corporate profits earned in the US. You want to declare yourself as owned offshore,..fine. But why can’t your US revenue be taxed here except  that the GOP will be against it.

2.  They are against gov regulation. Disaster in the Gulf. Disaster in Massey Mines. Disaster on Wall St. That’s what less regulation gets you.Their willfull desire for less regulation brings death from food pathogens

3. They are actually clamoring for lifting rerictions on child labor. It’s astonishing. What would that be for except to lower wages.

4. they are against ending the Wars.The Wars that waste trillions of dollars with absolutely NOTHING to show for it. Iraq is still a mess,and Afghanistan is still little changed. If those trillions had been spent on Domestic Infrastructure, then we would  have low  unemployment and a booming economy and good roads,bridges, dams,schools,parks mass transit . The money was spent on GOP wars. We have nothing to show for it but a bloated deficit and a bad economy.

It doesn’t have to be that way but,the GOP demands it. The same money spent on domestic infrastructure,education,transportation  alternative energy projects, and healthcare would have transformed the us into a vibrant dynamo. Couple that with increased tax on the wealthy and making corporations actually pay their share, reducing the defense budget would balance the budget.

Do you realize that the Defense spending has doubled since the fall of the Soviet Union? What a waste! Do you feel safer. Any nut with a pack of matches can burn most of the West but we spend billions on anti-terrorism. On What. Air cargo is still not inspected. Incoming cargo in our ports is scarcely looked at. If the terrorists are so plentiful and represent such a grave threat,…then they certainly haven’t done much.  My dog shows more ambition and determination then they have.

Yankee Bob

Systemic Risk That

Threatens Global Economy

Japan- The amount of radiation spewing from the broken nuclear reactors will soon top Chernobyl. Yesterday had the highest readings yet recorded from reactor #1

Europe’s weak economies – The financial stability of these countries keeps growing - Story LINK

The problem here is the trend. News keeps getting worse and the solutions used to fix the wounds don’t always work.

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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

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Shorter Term Forecasting Indexes

There are hundreds of forecasting tools, – These two tools have worked

When they stop working Investors411 will use other Indexes

• The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar was flat yesterday -0.01%.  Since late April we have been in a bullish trend and established two higher highs and now a higher low. The dollar is the key index to watch and has a strong inverse correlation with socks. Trend for stocks = Bearish/Neutral (More Bearish than neutral)
• McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] MO was basically flat. Closing price  -28.43 Yesterday Investors411 mentioned that stocks in April bounced off a low of just above -50. The same bounce seems to have started now.  Short term trend = Bullish/Neutral

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Paul’s Corner

As expected we had a bounce Wednesday. Silver up another 3.2%, US Oil up 1.7% and the Russell 2000 Small Cap Index up 1.3%  The S&P 500 up 0.3%. The small caps, aka “risk trade” lead they way. The oil stocks are moving up once again. Most indexes where up all afternoon and volume a bit higher than normal which is good. Is this the end of the correction or just a bounce?

The following group indexes all were up today with a decent move up through their Bollinger bands.

• Trvl&Leisr-Gaming Index (INDEX)
• Health-Products Index (INDEX)
• Office Supplies&Equip Index (INDEX)
• Comp-Educ/Enter Index (INDEX)
• Health-Instruments Index (INDEX)
• Retail-Jewelry Index (INDEX)
• Chem-Speciality Index (INDEX)
• BusSvc-Cml Printing Index (INDEX)
• Comp-Financial Index (INDEX)
• Health-Dent/Med Sup&Svc Index (INDEX)
• Health-Bio/Genetic Index (INDEX)
• Constr-Mobile/RV Index (INDEX)
• Retail-Mail Order Index (INDEX)
• Comp-Networks Index (INDEX)
• Container Prod Index (INDEX)
• Hsld-Furn/Office Index (INDEX)
• Enrg-O&G Equip Index (INDEX)
• Chem-Fertilizer Index (INDEX)

Here is how Your Stock List looked at the close yesterday.

• SPRD jumped 8.6% closed on the 50 DMA
• LYB up 4.63% with the oils, closed above the 50, buyable
• BEXP up 4.44% with the oils, below the 50 above the 17 buyable
• CPHD up 3.75% closed above the 17 in buying range
• KSU up 3.3% mostly white candles the past 8 days, all green indicators
• POT up 2.68% Below the 50 chart does NOT say buy at the moment
• RVBD up 2.57% above the 17
• PCLN up 1.61% chart still breaking down, most indicators red
• ABC up 1.49% sitting just below the 17, basing
• ALTR up 1.46% below the 17, above the 50 basing
• RNOW up 1.32% below the 17  and the 50
• ADTN up 1.27% appears to have settled down into a basing period, at the 50
• SKWS up 0.32%, not buyable, on the 200
• SAP up 0.35% broken down below the 50
• JNPR up 0.14% Woof!
• BIDU up 0.28% the mighty BIDU appears to be breaking down, NOT buyable
• IMAX down 0.04% sell off with a hammer candle stick, usually a bounce after a hammer.

So what’s the market going to do today? Let’s load up Quote Tracker………here we go folks another day of fun!

Chart review is for education and NOT a stock recommendation.  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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Positions

SLV and AGQ had another excellent day. Often, technically,  when stocks/ETF’s gap higher for the third time in a row it means exhaustion or they have temporarily run out of buyers. So if silver again gaps higher at open you could see a reversal. Very tempted to take 1/2  the profits into rally and let the rest ride.

Disclosure – I have a long term position in GLD for a senior center account I manage  and member of my family. I also own some SLV from a covered call position bought over two months ago. I own every position in the hypothetical Investors portfolio which now consists of SLV & REMX

Caution - AGQ (2X leveraged silver ETF) does not exactly tracks silver. There are opening and closing distortions. Contact me if you want to know more. Same for ZSL(double short silver) DGP is double long gold – for those that like great risk

Last warning on YSL.

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Check out the advice, recommendations, analysis by bloggers on stocks,politics and trends in the comments section of the blog Many of the best concepts regarding YOUR Financial Future are discussed their. Watch for Paul’s Corner every Tuesday and Thursday

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Longer Term Outlook

NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Focus today is on Quantitative Easing (sometimes referred to as QE 1, QE2, Fed POMO)

The following is a link to a three year chart of the benchmark S&P 500

Notice the strong correlation between quantitative easing and stocks moving higher.

• QE #1 starts in the spring of 2008 (along with FASB) and market move dramatically higher
• QE #1 ends at the end of the 1st quarter in 2009 – stocks move down.
• QE #2 announced in Nov. of 2010. Stocks move higher again (they start a month+ earlier in anticipation of more QE 2)

Since November 2010, the chart pattern has been bullish with low volume rallies. The Fed buys treasuries from (and gives them a 0% loan rate) shadow banks and they, wink wink, know what to do with the money – prop up stocks.

• Major Fundamental events (Japan & revolutions/oil prices) can only dent this steady march of low volume rallies higher.
• Every technical analyst realizes that low volume rallies for month after month are basically an impossibility.

So unless there is another unforeseen factor, stocks should again move higher till QE 2 runs out on June 30th. If stocks fall then QE #3 is possible. This is a bubble building manipulation that benefits the ruling wealthy class in the USA, so it should continue.

Bubbles pop and working class American’s will pay the cost or go under (inflation or monetary collapse). However, for now, stimulus (Obama tax compromise) FASB & 0% interest rates are still in place. So the future looks decent for stocks till the bubble bursts.

Tom Friedman Pulitzer Prize winning NYT Editorialist

The Strike Out

The Date – June 29th 2005

The Editorial - The End of the Rainbow – Ireland

Ireland adopted an unbelievably lowest corporate tax rate of 12.5%, America’s shadow banking and casino capitalism (AKA free markets). Tom does an Irish jig for joy over what he sees as a bright  future. Tiny Ireland now needs a gigantic EU bailout and austerity to just survive

The Home Run

The Date – December 1st 2010

The Editorial – From WickiChina – China

What the Chinese officials on their way to world economic domination would be saying about our self destructive government and media if WikiLeaks. At first I laughed then it was just sad. A sample  -

There is a willful self-destructiveness in the air here as if America has all the time and money in the world for petty politics. They fight over things like — we are not making this up — how and where an airport security officer can touch them. They are fighting — we are happy to report — over the latest nuclear arms reduction treaty with Russia. It seems as if the Republicans are so interested in weakening President Obama that they are going to scuttle a treaty that would have fostered closer U.S.-Russian cooperation on issues like Iran. And since anything that brings Russia and America closer could end up isolating us, we are grateful…

Well worth reading and passing on to your friends,

START

Strategic Arms Reduction Treaty (Part 2)

YOUR Comments – Yankee Bob is back and you can read his full comments by linking to yesterday’s blog. Here’s how he starts

There was nothing heroic about Ronald Reagan. He declared war on the government and did much to land us in this deregulated un-unionized social welfare state for the rich and corporations. Beyond the petty politics he was a murderer. He gave funding ,training, aid and comfort and the green light to Death Squads all over Latin America. He condoned torture and murder without due process to further his political agenda…

Jim J concludes

I understand that the joint Chief of Staffs all support the new START treaty. What happened to Republican patriotism?

Paul R on START

I don’t recall who recently said it, but when asked about rep support for START his comments were “sure, but we need to modernize the military first”. “Military” Republican stimulus plan

START – Part 3 (tomorrow)

Stocks

Investors411 tries to keep it basic.

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

Investors411 record – 5 years of beating benchmark S&P 500

World Stocks - December has historically been the best or outstanding month for stocks.

USA – Today is confirmation day for yesterday’s rally. If stocks can come close to holding onto their gains or improve on them the rally gets confirmed. This more often than not means our newly born bull will continue to grow. The big news is still Friday’s jobs report. Built in are expectations of improvement.

Europe - Early in the day there was hyped news that the US Treasury was going to help Europe with its problems – later it was denied.

Emerging markets – EEM the ETF for emerging markets was up +2.87% yesterday. Good news especially for long term investors is that emerging markets outperformed the major US indexes. USO – (oil ETF) another rally leader +3.22% UCO (leveraged ETF 2x oil +6.20%) When energy prices move up it often not only reflects economic expansion in USA, but increasingly emerging markets.

Reading The Tea Leaves -

The “Good News” from yesterday was - Trend exhaustion  -49 on the MO shows we are technically reaching a point where there are fewer and fewer sellers out there.

Congratulations to several of you who recognized how over sold markets were getting and took the risk by buying the dip on Tuesday.

Ideally you’d like the MO over -60 but The Critic (see comments section of yesterday’s blog) is right – generally – the lower the MO goes the better your chances are for catching an oversold bounce and a more successful longer term trade. Her statement from comments section -

“So I buy when the MO is at -50. There’s much more room from -50 to +100 than -50 to -100. The odds may not be perfect, but they are in my favor.”

Also -The McClellan Oscillator (MO) and other forecasting tools are far more related to broader Indexes or ETF’s than individual stocks. Example - Paul R points out how over extended both DECK & IMAX are right now in the comments section.

How you play the MO and other  forecasting tools depends on your level of risk. The Critic uses leveraged ETF’s (EWM, SSO, UCO & TYH) as part of her portfolio and although she has NOT announced it in the comments section she has done quite well. TYH was up +6.53% yesterday. If she bought near the previous day’s low the total gain was +10% She also has a diversified portfolio of long term assets and uses YOUR Stock List.

Direxion and ProShares are the two companies that offer leveraged ETF’s. See POSITIONS section for blog for links. Obviously something that’s leveraged 2x is less risky than most 3x leveraged funds.

Bottom Line – As I stated in the comments section – This big a move off a retest of a major support level. It usually indicates that the rally will continue. (This Retest = Price moves down to support level,  remains above the support level for a period of days (9 days), then falls back down and retests strength of the support level. It held. Then, in one day stocks moved higher than the higher of the previous 9 days – A breakout. = Bullish

Positions

• EEM - (Emerging Markets ETF)
• UWM - (2x small cap stocks ETF) This is now up over +7% since it was bought @ 10 days ago. Once a leveraged ETF goes up 5+ % I usually sell 1/2 or put a tight trailing stop on that 1/2 of @2% on it each day. I’ll do this today.

From Yesterday – This means at least a short term oversold bounce. And what a bounce it was.

Long Term Investors - Mea Culpa – I like the odds to be more in our favor before making major long term investment. So I did NOT put out a clear BUY signal. However realize if you can tolerate the risk -60 on the MO is NOT a line in the sand and like The Critic you don’t have to wait.

THE PURPOSE OF INVESTORS411 IS TO EDUCATE YOU ON HOW TO USE SOME BASIC FORECASTING TOOL AND ACT ACCORDINGLY. Stock Markets are moving faster than ever before and by the time I get the information out it sometimes has gone stale. Also I’m NOT watching stocks move all day and sometimes ignore markets entirely. THEREFORE, USE INVESTORS411 AS AN EDUCATIONAL TOOL - If you have a problem I will answer your email ASAP.

Investors – A -15 on the MO still gives us some wiggle room. Considering UCO and more UWM on a dip today. This is a higher risk trade/investment.

Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including “YOUR Stock List.” -

Heroes

Inside Job -  The Charles Ferguson (above) Docudrama lists all the major players from an IMF President & French Finance minister to the insiders who got fired that stood up stood up to Paulson, Greenspan, Bernanke, Summers, Geithner & the shadow banks etc. and told them of the coming economic catastrophe.

What Can YOU Do? - You can Link to The Official Facebook page. It has some great ideas

Russ Feingold – Obama should give Feingold the #1 economic position in his administration. Below is a copy of the letter he sent to his supporters –

Thank you. Thank you for your support over the years.  Representing Wisconsin in the Senate has been the greatest honor of my life and together we accomplished many great things. No one has ever had such a strong foundation of support as I have.  You gave me my backbone.

In the words of Bob Dylan:  “But my heart is not weary.  It’s light and free.  I’ve got nothing but affection for those who have sailed with me.”

Forward!

Russ, Thank you.

Ted Kaufman – Mr Smith Goes to Washington (Joe Klein) Maryland’s appointed Senator who did more to take on Wall Street insiders than anyone else in the Senate along with Russ Feingold. A quote from this article is what I’ve always taught my kids and what this blog is all about.

When I mentioned that many people thought that work was doomed to failure, since the wizards will always find their way around the rules, Kaufman exploded, “Baloney!” Only he didn’t say that. “That is the stupidest argument. It’s like saying you don’t put cops in the toughest neighborhoods because there’s always going to be crime there. We need cops on the street, on Wall Street. Good cops, like the ones in the current Justice Department, Securities and Exchange Commission and FBI. Our problem was that the cops weren’t doing their job. They’d stopped regulating — not just on Wall Street but also food and drugs and in the mining and drilling sector. Look what happened in the Gulf.”

Elizabeth Warren – She’s been featured in Investors411 more than anyone else except the President. The later is obviously NOT on this list. The following lecture on the The Coming Collapse of the Middle Class at prestigious Jefferson Memorial Lecture Series is outstanding. Over 427,000 have seen this interview.  More fun – Warren on Jon Stewart.

If any of you has someone else who stands up to Wall Street and can explain why. I’d be happy to post.

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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

Index	Percentage	Volume
Dow	+1.96%	up
NASDQ	+1.46%	up
S&P	+1.93%	up
Russell 2000	+2.56%	-

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

US Stock Markets -

Dollar broke its support level two days ago &took a significant hit yesterday. This confirmed the breakdown through support. So stocks rallied yesterday.

Volume was higher and above average, but not the massive volume you’d usually associate with a rally of this magnitude. Let’s go back to or remember an old mantra – The Black Box/High Frequency Traders control 50 to 80% of the US stock market. This is their rally and its based on the downward plunge of the dollar.(see below)

The BB/HFT are now going to get some resistance from what’s left of regular traders/investors (the other 20 to 50% of traders) and they are worried.

• Insider selling is at all time high.
• S&P is at major resistance – this years high.
• Many Oscillators and Indexes are showing overbought US markets
• Our own MO while not in overbought territory yet is the highest in over a month.

US stocks used to be controlled by normal investors and traders – If it still was I’d be ducking, covering & selling big time. But its not. See Bottom Line below.

JS in comments section posts an interesting editorial on emerging markets fighting back against the Fed pumping and dumping truck loads of $$$ into our economy. This will be a concern in future and may lead to a currency war. But

• Mostly all bark and no bite right now from emerging markets
• China’s currency is pegged to dollar, so they are irrelevant in this.
• Europe, a slightly bigger economic entity than USA has even less bark.
• USA rules, in part because oil prices are tied to dollar and we are still (getting smaller each day but) the Big Kahuna

Employment numbers for last month just in +156,000 jobs rate even at 9.6% More here

Again the Mantra for the last week - “Not making any specific move until dollar breaks out of its range. I would look at a breakout higher for the dollar, and a corresponding fall in stocks and the MO to oversold as a buying opportunity for long term investors. “Looks like Wednesday Fed meeting is the big event.”

The MO was near zero and we had the Fed announce a large pump and dump of Quantitative Easing ($600 billion in QE2) so as forecasted many new relevant ETF’s were added. – EEM TYH DGP. These were all bought as the dollar broke down through support after the Fed announcement.

Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including “YOUR Stock List.”

Announcements of purchases/selling can first be seen in the comments section of the blog and/or if you are on the private mail list. If you’d like to get on mail list send me an email – see HELP/EDITOR section of blog

Casualty Battle for castle Bear Skull yesterday as Bulls stampede

Again a must see short video from Dr George Gerbner on Violence

Hope you joined us in making $. Yesterday Investors411 called for a rally –  Castle Bear Scull fell and, as predicted, BULLS rallied – “Not guts no glory – I’d love to wait for a 100 point Dow dip, but you can feel the bulls breath & it may never come before the rally.” (more below) .

Jim’s List

Here’s a short list of Senate candidates I’m supporting either with cash and in one case time. I also like F.S.’s Congressman Grayson in Florida. He’s been “change we can believe in.” I’ve tried to choose close races and focused on solid candidates like those who had the conviction to vote yes to break up shadow banks. The other criteria was if they were running against someone that is truly over the edge on the far right.

#1 Russ Feingold Wisconsin – Progressive maverick who haas done everything from more body armor on HV vehicles in Iraq to campaign finance reform.

#2 Harry Reid Nevada – Harry did vote to break up the shadow banks,but it is more his Tea party opponent who is the concern. Example she no longer wants us to be the leader of the free world – she wants us out of the UN.

#3 Alexi Giannoulias Illinois – Close race & Alexi does not take a dime from corporate PAC’s or federal lobbyists.

#4 Chris Coons Delaware – Good man in race against Tea Party/Sarah Palin opponent whose latest scandal is being investigated for stealing living expenses from her campaign fund. See my post in comments section of blog for this.

#5 Barbara Boxer California – Strong progressive who is running against someone who did a poor job running HP computers. Her opponent knows how to outsource jobs.

That’s my list in order of preference. Barr thanks for letting me publish them and you guys for asking him for it in the comments section of the blog for the list

Jim J.

[Jim's right - Lots of you in comments section were vocal about wanting his list - so here it is. Like the list? Don't like the list? Have your own list of candidates from whatever party. Post them in the comments section of the blog. Barr]

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

Investors411 record – 5 years of beating benchmark S&P 500

Mantra for September - “The Black Box/High Frequency Traders BB/HFT control the majority of trades. Jim Cramer -”BB/HFT make up 80% of trades.”

Term for the Day -Over extended – From Investopedia

US Markets

US stock markets rallied is what has become standard – reduced from day before and below  average volume. Just about every standard text book on stock analysis uses volume as the  a very or most significant factor in a price move. This is no longer the case for many many months.

Long Term Is this a bubble building? – Yes Here’s what’s holding us up technically & fundamentally

• You have a bunch of hard core investors who are holding onto stocks no matter what
• Companies are buying back stock instead of creating jobs or using $ for expanded research.
• BB/HFT’s trading.
• Investments by wealth sovereign wealth funds and hedge funds (the world’s oligarchs)
• A central bank that keeps pouring/printing money ($5 billion yesterday) into the economy
• Emerging markets are red hot. US money is investing abroad in these emerging markets – not US jobs.

Bubbles can take years to build – Look at the stock market leading up to the housing/finance crisis. So for now we ride the wave using the MO as our guide.

Obama gave an hour long town hall for  the ultra right wing financial channel CNBC and stocks rallied in front of & after his speech.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar, fell  -0.08% yesterday. Dollar seems to be starting another consolidation but longer term, falling dollar trend for stocks = Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Fell a -1.79% yesterday.  The BDI does not have the immediate impact that the MO or Dollar does. 6th down day in a row, with rate of fall decreasing. After 8 week bull run trend could be changing to bearish, but still= Neutral
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose  to +48.47 yesterday. We’re only 11.5 points away from overbought territory, but still = NEUTRAL

Reading Tea Leaves

The benchmark S&P 500 stands at 1143 and just about every analyst is telling their client that 1220 is the next serious resistance level. Also, the strong triple top resistance level or castle bear skull was shattered (see yesterday’s Investors411)

Bulls are going to do everything they can to drive stocks to 122o. Today is a confirmation of rally day.

• give back over 1/2 of the gains bearish
• the less we retreat the better
• Adding to gains bullish

Our early change to CAUTIOUSLY BULLISH seems to have been the right call.

Positions

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

(I do manage 6 accounts that have other positions)

Current Longer Term positions –  EWS (Singapore), USO (price of oil/commodity) SSO (2x what S&P does- this ETF is more a trade that may turn into an investment)

If, we get up over +60 on the MO and  the Dow/major indexes rally – that would be a selling or shorting point.

Since we now have a bullish trend Investors411 is going to adopt a different set of parameters around the MO.  (see earlier Investors411)  Traders instead of waiting for -60 on the MO the area around +20 or the 50 DMA seems to be a support level. Just remember over the last 3 years 3 months is the maximum period the MO has gone without reaching -60.

We can also allow for a little bit more on the upside of the MO (+60)

Long Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!