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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

Oxford University

Science and Greatness

Quite simply the rise of western civilization came about through the rise of the  scientific method.

As Western civilization grew that knowledge and scientific methodology became institutionalized in the great European Universities and over the last century in the USA in such institutions as Harvard, Princeton, Stanford etc. As we nurtured both the institutions and the methodology the US leadership role expanded. Now  its in decline. Why?

• Greed based Science - Major corporations to inure higher profits formed think tanks, lavished money on scientists, bought media networks an dominate those networks revenue streams. Example – At an earl age kids have repeated hypnotically that Captain Sugar must be consumed to become happy like all your favorite heroes.
• Return to Religiosity - The scientific method  no longer takes a role but blind faith in a religious leader or concept becomes all consuming. Perhaps the best example is the science of evolution being challenged by creationism.
• Direct assault on Science – Those who win Nobel Prizes and have attended institutions like Harvard or the Sorbonne are look down at an ridiculed as not like us or their ideas are dismissed because the come from “liberal” or “foreign” universities

It is no accident that these are the  three major groups in the Republican party.

• The business wing that screams for no regulations of what they call the “free market” ( a term that should make you cringe every time you hear it). Everything should be run in the shadows without regulators to maximize the profits. Like 2008 – capitalize the gains for them  and socializes the risk for you.
• The charismatic religious leader who through the use of fear predicts the end of the world or hell if his/her interpretation of events thousands of years ago is not followed.
• The Mamma Grizzly’s, Tough Talking Trumps, and all the heroes of the Tea Partiers. They constantly remind us – Those who back science are elites and not like us common folks. Above all never compromise with your fellow Americans because they and the rest of the world are not like us.

Obviously many/most Democrats are held in rapture (a pun) of the Corporate oligarchy and cater to some of the other elements that denounce a scientific method. But its the far right that has changed what made us great. As we sink in the USA, not to worry, China, Japan, and so many other countries are valuing education and even our universities. They are the leaders of tomorrow.

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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 fell yesterday -0.37%. A five day decline has placed the dollar below its 50 day moving average and that, of course, is bearish for the dollar. But for stocks  = Bullish
• McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] MO rose dramatically to  +38.36 Check out this link to the MO chart and you will see  since last September each time the MO has been unable to rise over +50. Very reasonable to assume rally will soon become overbought. We’re almost there.= Bearish/neutral

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Paul’s Corner

[Editor's Note - This was written Monday night]

The Second Day of Summer 2011

Friday finished nicely higher for many stocks, has the bull market resumed? In electronic trading Monday oil closed down, under the assumption of a slowing USD economy and debt in Europe. Many of the oil related stocks have done well these past few weeks, we’ll see what happens at 9:30 this morning.

So what moved Friday? Looking at my favorite search for stocks in high demand we see the following top groups. Stocks with decent charts in bold.

Health-Drugs (8.00%, 8 securities)

• Amarin Corporation PLC (AMRN)
• Forest Laboratories  Inc. (FRX)
• Johnson & Johnson (JNJ)
• Novartis AG (NVS)
• Questcor Pharmaceuticals  In (QCOR)
• Teva Pharmaceutical Industri (TEVA)
• Valeant Pharmaceuticals Inte (VRX)
• Watson Pharmaceuticals Inc. (WPI)

Chem-Fertilizer (6.00%, 6 securities)

• Agrium Inc (AGU)
• CF Industries Holdings  Inc. (CF)
• LSB Industries  Inc. (LXU)
• Mosaic Co (MOS)
• Potash Corporation of Saskat (POT)
• Sociedad Quimica Y Minera De (SQM)

Enrg-O&G Explor&Prod (6.00%, 6 securities)

• Anadarko Petroleum Corp. (APC)
• Brigham Exploration Company (BEXP)
• Continental Resources  Inc. (CLR)
• Occidental Petroleum Corpora (OXY)
• Petrohawk Energy Corporation (HK)
• Whiting Petroleum Corporatio (WLL)

Semiconductor-Mfg (4.00%, 4 securities)

• Atmel Corporation (ATML)
• Avago Technologies Limited (AVGO)
• Broadcom Corporation (BRCM)
• Cypress Semiconductor Corpor (CY)

For those of you who enjoy searching for your own stocks, here is a list of HGSI selected stocks with a “lower left to upper right” trending chart pattern. They all are growth stocks with good fundamentals.

AIMC,CEVA,CF,CMG,CDXS,CPX,CY,EMC,FFIV,GLNG,HWD,INFA,KMT,KEG,PTEN,SRI,TSLA,VMW

Stocks listed are 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/AGQ (very roughly 2x silver) SLV is up over 5% since it was placed in hypothetical Investors411 portfolio. Often I take 1/2 the profits between 5 & 10% and let the rest ride. I’ve put a stop in at what the SLV was bought for.  Have reasonable confidence the speculative move behind silver is going to continue along with GLD (ETF for gold)

REMX – (Rare Earth metals) This hopefully long term holding had a almost a 10% move last week in light volume. Don’t know what this exactly means, but the light volume rally in both REMX & SLV is very similar to what has become norm for major indexes in the Fed managed/manipulated US stock market.

Anyone who used Investors411 #1 “buy the dip” of a bullish trending sector strategy on REMX has enjoyed the ride. (wish I had bought more) REMX had fallen below its 50 day moving average (see chart)

YOUR Stock List - Many of the stocks in YSL #4 have had a stellar run over the last 5/6 trading days. You can view the list by clicking on POSITIONS at the top of the blog and scrolling down.

Disclosure – I own both SLV & REMX

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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

So, you going to ignore him?

Tax and Spending

Since Obama and the Republicans answer to the shadow bank, military/industrial and other business cartels in Washington it is important to get get a more unbiased point of view on the budget. Here’s one from today’s NYT. Tax and Spending Myth and Realities A must read since  the cartels dominate the flow of information.

Military/Industrial Cartel

Just how powerful and dominate is this cartel? Their budget has gone up a staggering 81% in the last ten years.  Nothing comes close to creating debt like the military budget yet they are so powerful a cartel that neither Obama, the Republicans or the media address the problem in a substantive way.

The $700 billion yearly usually used as an approximation of the  defense department’s budget is as phoney as a three dollar bill.

• Foreign wars (Iraq, Afghanistan) are treated as supplemental budget items and not included
• Veterans affairs are not counting in this budget, yet this is closing in on 8.5% of total budget.
• Homeland Security (almost 3%) is not part of this budget and so are other smaller related military expenditures.
• Since programs like Social Security are paid for with their own tax or fees and are currently in the black they are not part of the growing federal deficit.  If you eliminate these programs as debt contributors, the military budget alone wind up contributing over 50% of the growing national debt. Some put this figure much higher

So if we take the $1,000,000,000,000+ military budget and increase it by 81% growth over the next 10 years you come up with a $4 to $6 trillion dollar increase over the next ten years that almost every politician in the USA ignores.

You’ve seen Republican’s ignore the King Kong of deficit creators in the Room (far bigger than the 800 lbs. gorilla) and today you will see Obama in a speech to the nation virtually ignore it.

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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

Investors411 record - 6 years of beating benchmark S&P 500

BUBBLE-ICIOUS - Investors411 term for the stock market – We are all riding on the outside of an ever expanding &  Central Bank manipulated liquidity stock bubble. See Investors411 STRATEGY section for more. Remember Fed liquidity (POMO, QE 2 or quantitative easing) announced ending is June 30th.

• This is different. What has been a 3/4 day market correction has happened in light volume. Used to be we rallied in light volume and sold off in heavy volume.
• The dollar , oil and MO have fallen significantly and the likelihood of at least a technical rebound is growing (see below)
• Republicans seem to want to play politics with the Debt Ceiling. This could have a significant negative impact on stocks. More on this in later Investors411. Surprised the Wall Street part of the Republican party seems to be caving into the Tea Party wing on this.
• The key to US equities remains how accommodative the Fed can be. If it is limited by the debt ceiling or something else – watch out below. Everything will suffer.
• Fed announces POMO schedule though May 14. $80 billion, plus a second program of $17 billion. Can’t help but wonder if this second program will continue beyond the supposed end June 30th. Analysts very divided on a QE #3(more quantitative easing after June 30th)

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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 fell moderately yesterday -0.23%.  The trend since start of year is bearish with lower highs and lower lows on chart, We are at a lower low.  For stocks = Bullish
• McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] MO fell to -51.72. Almost oversold. = Neutral/Bullish

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Reading The Tea Leaves

From yesterday – “Looks like we are in for a correction. The dip last month took the MO down to -85 (see link to chart above)” and in past has gone as low as -135.MO at -51.72 now

Bottom Line  Till it Breaks Down – No Black Swan events have been able to seriously impact the Fed liquidity driven equity market. So we are nearing a buy the dip territory.

The dollar at a low, oil prices plummeting last 2 days, and the MO nearing oversold levels shows we are ready for a rebound. If oil , the dollar & stocks continue to fall I will buy the dip. The further the better. This may only be a short term play (day, days, a week, or more).

Debt ceiling Republican soap opera politics in Washington could really hurt stocks. Question becomes will US default? Investors hate uncertainty and this is yet another bond holder to get out of treasuries.

This could kill the duration of the expected rally higher.

What to watch today – For shorter term traders Market movers.

• USO - ETF for oil - Oil up = stocks down – Big hit in last two days – for stocks – Bullish
• UUP - (Tracking ETF for dollar) Remember - The dollar is a contrarian indicator. Bad dollar = good stocks. Now bullish
• AAPL – Tech giant and market mover – Trading below its 50 DMA. Since mid February this char shows a series of lower highs and lower lows. AAPL rebounded yesterday. Perhaps the start of a rebound rally? Still, overall = Bearish
• Japan Rector Developments - This keeps getting worse.
• EEM – Emerging market ETF – On a breakout run, but getting  way over extended and now correcting.

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Positions

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

Iman Rauf of NYC Islamic Center

Confirmation of 5% Doctrine

Last Friday Investors411 led with Gail Collins’ 5% Doctrine. The Islamophobic fear mongering that was started over the NYC Islamic Culture Center has spread. The Florida minister’s didn’t burn the Koran, But  two other Ministers actually burned Korans on 911 ( includes video) By in large the American media has kept this quiet. Others are attempting to do so.

The Iman, who has said the doors of his Islamic Center will have rooms for other religions to pray and will honor the 60 Moslems & other Americans who died on 9/11, said canceling building plans will have the same kind of negative impact the Koran burning would have had by the Florida pastor throughout the world. General Petraeus is 100% right in his call to protect the troops and NOT to burn Korans.

Bottom Line –  from Steve Clemons – Do Muslim Lives Matter?

Elizabeth Warren for CFPB

Another  editorial by MIT prof Simon Johnson on why Elizabeth Warren would be  great for the position as first head of Consumer Financial Protection Bureau.

Every time the Dems call/email me asking to contribute money. I reply when Warren gets appointed then call me. See the debate on contributing $ for the November elections in comments section of blog.

Quote For the Week

“The Jews have lived an existence that is much harder than ours. Nothing compares to the Holocaust.” Fidel Castro in criticizing Iran’s so called President Mahmoud Ahmadinejad. Odds by Intrade of an overt US or Israeli air strike on Iran – Bid 24.0% Ask 24.4% by end of next year

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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!

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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 of the Day – Double Dip Recession - From investopedia “When gross domestic product (GDP) growth slides back to negative after a quarter or two of positive growth. A double-dip recession refers to a recession followed by a short-lived recovery, followed by another recession.” This is perhaps the major worry on Wall Street and Main Street.

Rally with pathetic volume on Friday. Low volume rallies have been the reality for major US indexes for many many moons. BB/HFT’s dominate and the # of retail investors are diminishing. As explained in past Investors411, this forces anyone who wants to invest to look at US stock markets differently than in the past.

Example – Low volume rallies would send technical analysts jumping for the sidelines or out of stocks.  Now, they are a wave to ride until we reach oversold positions (see MO below)

What’s up for this week – “A Dash of Insight” (a pun – but you have to know about the author) on the week ahead by Jeff Miller OK so most of you will skip reading this, but if you want to have an understanding of the different types and health of trees in the investment forrest its well worth the read

High Dividend stocks – Investors411 has recommended High dividend stocks as an outperformed in troubled times because they have two potential streams of income for long term investors – Appreciation in price and potential dividend. Here’s an editorial on 5 potential high dividend stocks

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar, rose avery minor +0.01% higher Friday. Dollar in 4+ week long trading range. For stocks = Neutral
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rose a very minor +0.23%yesterday.  The BDI does not have the immediate impact that the MO or Dollar does. It also often makes long slow moves in one direction (see chart for patterns)  Right now chart pattern = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose to +43.43 yesterday. Clearly above zero and within 17 points of +60. So we are nearing overbought levels, but still= Neutral

Reading Tea Leaves

We slowly moving toward oversold territory, while the dollar is moving sideways. The trend is bullish,but when we get to overbought (@+60 on the MO) this trend should change.

Right now good news gets a favorable reaction from stocks.  The more overbought we get the less that same kind of good news matters. For right now the Bulls rule.

NB – I’ve been too cautious for long term investors over the past few months when we reached key turning points (+/- 60 on the MO and not invested enough or sold enough. There are some key negative fundamental factors in the Europe & The USA to be concerned about balanced by the continued dynamic growth of emerging markets. (more later this week)

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 positions –  EWS (Singapore)

Short term traders - From Friday – “There’s some wiggle room before overbought levels are reached, but its mighty narrow.” Looks like potential rally today may run us out of wiggle room.

If stocks to rally today and we reach or come close to +60 on the MO. Any further rally would be time to sell some of your long term positions.

Paul R has an excellent strategy for this he has mentioned in comments section of blog. Especially good for any traders when conditions get oversold – “tighten your stops.”

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Killing Ants With

Republican Leadership

Popeye in Comments section of blog states – John Boehner Republican and next [possible] speaker of the house called the pitifully weak shadow bank fat cat financial reform bill “KILLING AN ANT WITH A NUCLEAR WEAPON.” What plant is he on?

If the Tea Party Patriots and Republicans win the next election John Boehner will be Speaker of the House – This guy thinks, that financial crisis/reform is just an “ant” John McCain made light of the financial crisis before the election and it handed Obama the election. Boehner had the benefit of hindsight.

There is still at least one Republican who has not drunk the Tea Party Kool Aid – Senator Lindsey Grahram -To Tea Partiers in a meeting: “‘What do you want to do? You take back your country — and do what with it?’…Everybody went from being kind of hostile to just dead silent.”…you [TPP's] have no vision…you will die out.”

Bottom Line – As much as you and I disagree with what Obama is doing, the Republican alternative is far worse

Cheney/Bush Won

For years Investors411 has demonstrated US media bias. Latest proof of how Cheney/Bush fear mongering patriotism to a gullible supposedly liberal media (New Your Times & LA Times)working . This Harvard study on terminology proves it – Is water boarding torture?

• NYT -If other countries waterboarded it was called torture 85.5% of the time.
• NYT – If US waterboarded after 2004 it was called torture 1.6% of the time
• NYT – Before 2004 water boarding was called torture 81.5% of the time.

YOU are manipulated daily not only by content, but choice of words and stories the media uses. Even in the NYT

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

Mantra for week - “ Any analysis of stocks has become an analysis of what the ”Black Boxes” of  huge institutions with their high frequency trades & computer algorithms are doing.” They make up 80% of trading and right now the huge currency markets are dictating their moves.”

Clash of the Titans

Gravity/Fundamentals.

The Black Boxes got overwhelmed by gravity or market fundamentals. So has the month long inverse relationship between the dollar and US stocks. We’ve seen a lot of non black box investors panic and take their $ out of stocks this week. Bad fundamental economic news finally is trumping everything else (see yesterday’s Investors 411 for reasons)

The BDI going over a cliff (-44% see below) is further indications of economic meltdown.

Technicals – Two times in the last two days the Dow has dipped 100+ points (-152 yesterday) only to recover most of those losses. S&P down 8 of last 9 days is certainly another indication that stocks are oversold. Another is obviously the MO. It went below -60 interday (oversold territory) in the 100+ point declines – then recovered.

This is the kind of day investors hate, but short term traders love = VOLATILITY

The bulls titan has a meltdown in the dollar, an oversold market, and knowledge that large dips are getting bought.

The bears titan has a week of horrible fundamentals worldwide & the BDI. Also, Bond traders are running wild. (sorry for lack of explanation here – takes too long – but its bad for stocks)

Icing on the Cake – The Monthly Jobs Report.

The jobs report comes out this AM and anything unexpected could create wild fluctuations. Remember the jobs report is very significant to the long term economic well being of the USA, but it matters far less to the US stock market.

The JUNE Jobs Report Headlines - -9.5% Unemployed vs -9.7 in May = +0.2%, Private sector jobs up +83,000 vs +33,000 in May.

Basicaly in line or a slight positive surprise. This data does not say armegeddon, but you need +200,000 a month to ofset population growth and lower unemployment long term. Stock futures initially moved higher, but are now flat.

Significant Indexes

• McClellan Oscillator (MO) fell a we bit to -52.19 [+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. In May the MO reached two lows – one at -120 and the other close to -130. Therefore, potential for more downside risk. = Still NEUTRAL, but almost oversold
• US Dollar –  The dollar fell an unheard of -1.75% yesterday [Anything over +/- @0.50 is significant.] This is the single largest move in the dollar in the last 6 months probably a lot longer. The support level was more than broken it was devastated Mantra - right now is very important Dollar up = stocks down and visa versa. Yesterday stocks and dollar going down together. – A Total Disconnect - Stocks indexes should have soared – up 2 to 4% on this news.  = Bullish
• 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  2351 yesterday.( This is a huge -44% drop in 6 weeks.  Often a leading indicator for stocks. Here’s a week+ old chart of BDI showing broken support levels. The BDI fell -2.29% Rate of decline increasing as it nears support level =Bearish

Positions

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

Have not yet had a chance to Update over last 2 weekend but there are NO positions held at this time.

Short term Traders - Would buy into any big move to downside, especially if dollar is falling. Use ETF’s that go long 2 & 3 times indexes.

Investors willing to take big risks – Remember The long term outlook is still Cautiously BEARISH.

A significant fall near the end of the session could be a chance for a small nibble. Technically what’s setting up is probably a bear market rally. Realize this may only be a short term trade that you sell 1/2 on only a 5% gains and you should set a stop/loss on trade.

Long Term Outlook =CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

I took these two f lame throwing, anti big bank/financials photos from website CommonDreams

2010 Economic and Stock Forecasts

To make an overall forecast let’s look at the past decade and year & the mega trends So here’s the Good, the Bad, the Ugly Almost all the Bad emanates or is focused on the USA

The Bad

• Free Markets are NOT self correcting – This lesson has been taken to heart by many (see the good – yesterday’s Investors411 ), especially those outside the USA. Unfortunately , all you have to do is watch any of the cable business channels, read the WSJ, IBD or most business publications  to realize that they are fighting tooth and nail against any regulations and continue to have us (the taxpayers) pay for their greed. Even a new Consumer Protection Agency is being blocked by Republicans. Both parties are almost entirely owned/influenced/bought off by business lobbyists and their money.
  
• The Deficit -  Time magazine called it the Decade from Hell One reason is the HUGE deficits that started to build when Bush won in 2000. Frontline’s $10 Trillion and Counting chronicles how the deficit grew – cutting taxes, expanding  wars, huge spending programs etc. Once Obama got in office he added to the deficit to stimulate inherited stagnant growth. This only made the deficit worse. Add to this our love of credit and you have the potential for another decade that may be worse .
  
• Growth of Hate and Fear Mongering – "You’re either with us or Against Us" – The growth of hate goes far beyond the fact that we have far more violent crimes than any other industrialized democracy. We are taught to stereotype and hate everything – Europeans & Canadians (socialists), Mexican’s (illegal’s) Arab’s (terrorists) Russian’s (a threat) Chinese & Saudi’s (owning America) liberals (weak tree huggers) education (elitists) science (anti religion or anti business) and the list goes on and on. Hate and fear sells everything from products to politics and its growing.
• No Economic Progress – Nobel Prize winner Paul Krugman calls the last decade The Big Zero – No job growth (globalization a big factor), the Dow dropped from 11,000 to 8,500 under Bush, plus more in his editorial. The Dow has rebounded under Obama. However, that’s because Obama has kept the same  tax cuts, deregulation, expanding wars, and this time perhaps necessary spending  as the cornerstone of his economics. Another bubble is building . If your in the upper 1 or 2% economically this was the decade from heaven, but if you’re a working American you’re in a hell of a hole. It’s going to be a long time before we dig out.

Coming up - The Ugly – However, you can see why Investors411 has beat the US stock market Indexes for the past 5+ years by investing primarily outside the USA . (See below for this year’s results) Apologies – I did leave out 911 which was a horrific event and other acts of terrorism.

Coming up tomorrow the Ugly

YOUR Comments

• The Cynic comments on a very funny political Jib Jab video
• Stewart on Republicans. His comments are worth of entire editorial
• D on a web site that locates community banks. So get off your (skinnier ?) butts and out of those banks that caused the financial meltdown. (see yesterday’s updates)
  

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 most major US indexes

Technicals, Fundamentals & Analysis

Most Sections of blog have been revised (or are under construction for 2010) See Positions , Strategy , and Overview for changes

Significant rally in increased and a bit above average volume. A clear across the board day where some new money flowed into US markets.  Strongest bullish sign in several months . It would have been better if volume was larger.

• McClellan Index at +24.74 = A bit overbought. This means we have some wiggle room for US stocks to move higher before they reach +60 or overbought territory.
• The Dollar fell a significant -0.56% The inverse relationship helped stocks move higher .
• The Baltic Dry Index has moved up since 12/24 - Short term bullish , especially for China.
  

Right now this certainly looks like a market that has "wiggle room" to move higher into Friday’s monthly jobs report. The BDI is moving up and the dollar dropping should give bulls some additional ammo

Positions

The  Positions Section (also at top of blog) has the latest buys and sells (Usually updated over weekends)

These are positions I actually own

SELLING & BUYING

Results for 2009 . + 35.5% See POSITIONS (scroll down) for details

Monitor (see comments on right side of blog) was right @ 60% of gains came from two positions in China (FXI ) and Brazil (EWZ )

It now looks like it was a big mistake to sell UWM last week. Oh well, nobody goes broke taking a profit, even a tiny +2%

Check out some of YOUR recommended stock picks made over the last  2 week. Some have broken out big time and/or moved significantly higher Use the calender at top of blog.

Short term traders (not longer term investors) may want to go long (something like EDC, TYH or ROM )  until Friday’s job’s report. See POSITIONS

Long Term Outlook = CAUTIOUSLY BULLISH

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

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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 !