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SOTU

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George “Been Forgotten” Bush went over the top with his “your either with us or against us” proclamation.  A line he later regretted.

Remember, those of us who opposed the Iraq war were hated as un American and not Patriotic. Emotions ran high because of the terrible 911 tragedy, but now some healing  has occurred over a war that was a tragic mistake.

The heart of Obama’s speech

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We don’t begrudge financial success in this country. We admire it. When Americans talk about folks like me paying my fair share of taxes, it’s not because they envy the rich. It’s because they understand that when I get tax breaks I don’t need and the country can’t afford, it either adds to the deficit, or somebody else has to make up the difference – like a senior on a fixed income; or a student trying to get through school; or a family trying to make ends meet. That’s not right. Americans know it’s not right.

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Why are Romney’s Poll numbers Dropping?

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Romney provides the contrast to Obama SOTU and makes Bush’s “you’re either with us or against us”  milquetoast.

The following 20 second video is a perfect example of raging extremism. The kind of shouted hatred that twists the minds of so many of our fellow Americans into blind fear mongered emotionalist.  Romney -

“I’m going to Stuff it Down Obama’s Throat”

Click on photo for 20 second video

As far as timing goes Obama caught a huge break that his SOTU address came directly after Romney released just his 2012 tax returns (13.9% tax rate) that have opened a massive amount of new questions. (future editorials)

More on SOTU here and NYT here

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STOCKS

• From Last week – “We are in a low volume rally” In Paul’s Corner he points out the decrease in volume over the last five days. There have been lots of technicians who are calling for a pull back here. I tend to see 1350 1370 as the target on the S&P 500 before a significant retreat. (S&P now at 1314)

• Low volume rallies are a characteristic of Central Banks and friends manipulating stocks/bonds. They have become quite good at this and these rallies have tended to last.

• DAX (Germany) down this AM 0.67% at 7:00 AM EST. Italian bond’s two week long yield fall puts it well out of the 7% danger zone. But yields rose yesterday and this AM to  +6.23%. The Spanish and Italian bond reversal shows some economic stability returning to two of Europe’s largest economies and is bullish

• NFLX reports earnings after the bell. Watch comments section for details on possible combination Option Trade.

• Our government is simply overwhelmed by corporate lobbyist and money. For more Robert Reich

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Occupy Wall Street

It took 9 days before NPR first mentioned them, and 12 days before CNN dared defy Wall Street and mention the growing “Occupy Wall Street movement.” The Sunday NYT lead editorial was on the protestors message.

“The message — and the solutions — should be obvious to anyone who has been paying attention since the economy went into a recession that continues to sock the middle class while the rich have recovered and prospered.”

More editorials from Common Dreams - Carolyn Eisenberg , Robert Reiche ,& Bernie Sanders

But youhave to love this title/editorial Paul Krugman’s

Panic of the Plutocrats

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Chucky shredding wire from the movie or one of the remakes

Shredding Democracy

• Before Paulson/Bush asked for the  $700 billion 2008 bailout
• Before the worldwide 2008 stock meltdown
• Before Lehman Brothers went belly up

the FED Bank under Bernanke acting on its owned spent tens of billions of of unauthorized dollars bailing out AIG and Bear Stern. Without any constitutionally mandated congressional approval or oversight Bernanke/Geithner (who was NY fed board member) flooded these failing shadow financials with money. Did Paulson/Bush know this was happening?

“Its {the FED}secret deals, announced almost two years after they were done, violate the democratic process, if not the Constitution itself.” Robert Reich (Economist and former Sec. of Labor) The Fed came clean about this (masterfully) directly before the Easter break and American media has blown the story. Reich accurately explains the fall out here

What other secrets is the Fed hiding?

Shredding the Yankees

Yesterday was opening day for baseball, and hope springs eternal for every team. Most fans walk through a dark ballpark tunnel into a brightly lit transcendent green field full of hope on opening day.  The beloved Red Sox did twice come from behind to beat the evil empire, sometimes known as the New York Yankees, last night. Unfortunately there is over 170 games left if you make the playoffs and the Yankees will certainly shred far more teams than almost every other in baseball. Go SOX’s.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage	Volume
Dow	+0.65%	down
NASDQ	+0.19%	down
S&P 500	+0.74%	down
Russell 2000	+0.79%	-

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

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made each weekend

Friday’s March jobs report was better than expected, especially for the critical private sector +123,000 jobs created.

It clearly looks like jobs creation started in November and is slowly growing.  Here’s the ultra right wind Washington Times on the jobs report Clearly good news for the economy. The old Jolly Green Giant (not so jolly anymore – Alan Greenspan) and Obama Administration predicting potential acceleration in numbers.

This report, even though the headline -9.7% job loss stayed the same, was too good for Wall Street. The longer interest rates stay low, the better it is for stocks. A better than expected number in the private sector translate to the Fed rising interest rates sooner than expected.

The big stat out of last week was China’s Manufacturing Index coming in better than expected. This shows global growth in emerging markets is still pulling the world’s economy.

Last Week’s Fearless Forecast – “Up week” –  All US markets near highs as rally chugs along. Like the RED SOX against the YANKEES last night. We won.

This Weeks Fearless Forecast – “Up week” – But really difficult call – The Dollar is King right now. Europe is weak (see past Investors411) and the US (jobs report) is strong. The start of the week should see a rally, but the Dollar is coming up against major support level. (see below) Best read of the tea leaves. Our bullish momentum should carry us higher at the start of the week, but I expect the dollar to hold its support. Earnings season is around the corner and the expectations of better earnings will be the deciding factor making it an up week.

Bottom Line – With the McCellan stuck near zero – no wisdom in buying or selling any large position at this time. Will continue to nibble on dips.

Significant Indexes

• McClellan Oscillator rose significantly to -1.46 yesterday.  [+60 or above = Overbought = sell. -60 or below = oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. – This (at least for a day) broke the downward trading pattern. Downside and Upside risk are about the same. We are neither overbought or oversold.
• US Dollar -fell  -0.44% yesterday. [Anything over +/- @0.50 is significant.] Dollar broke through a more minor support level Friday and ended the day at $80.71. The major support at it climbing 50 day moving average is $80.19. Would be very surprised to see this fall. Falling dollar = rising stocks

As stated before -What the dollar does over the next few weeks is critical to stocks and economics around the world. Falling dollar good for stocks & rising dollar bad in the short term

Positions

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

3D and related theater stocks weekend results good. Simply not enough 3D screens to fill the demand.

The big news is the manufacturing growth in China (see above) – Mistake to take profits in FXI (China), but adding EWZ (Brazil) looks to be a good counter balancing longer term move.

Strongly considering adding health care/Biotech ETFs on dips. Their fundamental story is compelling (baby boomers getting older & obamacare covering 30+ million more) Their charts are outperforming. Recently added stocks TEVA & ESRX are in this general area.

Its frustrating, but I’d rather wait till US equities are more oversold to buy larger long term positions.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

What if Cuba got $6.6 billion in weapons?

Imagine This

What if China gave/sold $6.6 billion dollars worth of weapons to a country 90 miles off our shore  – CUBA. What would the reaction in the USA be? Chest thumbing 24/7 outrage and our military would move into position. As Popeye (see comments section) point out we just sold $6.6 billions in weapons to Taiwan 90 miles off the China cost.

We want China’s help in sanctions against IRAN growing nuclear threat. How is China going to act now to the American threat of $6.6 billion of new weapons off its shore? How would we react?

Bottom line, – this is feeding the military industrial complex need for profits/wars.

Wanting America and Obama to Fail

Part 2

Nobel Prize winner Paul Krugman editorial today echoed the problems Investor411 brought up Friday when Senator Shelby held up held up 70 top government appointments over two pet pork projects. In fact, other Senators are doing the same.

Obama’s, Press Secretary, called Shelby’s individual filibuster “silly.”  Silly? – The whole White House need to drink a quart of testosterone – Where is he fight that dominated the Obama campaign?

Falling Euro’s Threat to America.

Many, smaller European companies are on the verge of default. Obviously, Credit Default Swaps are traded on their bonds. So nobody knows just how mush of the debt they have and probably more importantly taking bets on there success and failures.

Simon Johnson , MIT prof and former Chief Economist of the World Bank has an editorial on this.  Basically the Euro will get weaker relative to the USA and this will help European socks, but also push American stocks higher.  Mantra for months has been stronger dollar = weaker US markets. Compare a chart of the Dollar ($USD) and the SPX (S&P 500)

Here’s the problem nobody knows how bad or over leveraged things exactly are because there was little regulation. – just like the theUSAUSA.

Who is Killing Financial Reform?

Robert Reich has a must read editorial on Democrats, lobbyist, and others who are involved in killing financial reform. It’s been over a year since Lehmann crash and nothings been done to fix shadow banks.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage	Volume
Dow	+0.10%	up
NASDQ	+0.74%	up
S&P500	+0.29%	up
Russell2000-	+0.56%	-

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

Technicals, Fundamentals & Analysis

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

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Significant indexes – Forecasting tools for market direction

• McClellan Index fell to -69.02 = Still Oversold. How low or oversold can markets get before rebounding. We did reach @-93 about 3 days ago, about @-115 last November & @ -130 back in the fall of 2008 .Since +60 is overbought & a sell signal – we are 130 points away from that and only 60 away from the HUGE Nov 2008 crash (see chart) Bad numbers are Bullish

• BDI – This chart shows the Baltic Dry Index (scroll down) , a measure of shipping costs, Has broken through a major month long  support level at @ 3000 .  Yesterday the BDI rose +30 at 2715. This is the second day of a rebound that will have to get above 3000 to be meaningful.
• $USD -The USD moved up dramatically as stocks fell lasst week.  As discussed many times before a rising dollar hurts US stocks because our goods cost more to export Rising Dollar = Bearish for Stocks

Fearless Forecast – We’re in for a buppy ride – Hard to value the extent of the European Debt problem – So when you don’t knoe investors almost always paly it safe and that means sell – Down Week – Buying the dips

Positions

The  Positions Section (also at top of blog) has the latest buys and sells – Revised positions over weekend) – These are positions I actually own

SELLING & BUYING

Here’s stocks YOU suggested  to add to the Watch List. – Will try to analyze stocks over weekend.
GS, JPM, CSCO, SHOO, ICON, SOA, ALF, VSEC, BIDU VPRT (tomorrow)

Still adding to positions. The more the McClellan dips the more you should add

The strategy .  Buy a position in an oversold market and sell 1/2 of it when it gains 5 to 10% and let the rest ride.  The position should take into account major trends that you understand. For me China, Emerging Markets and Brazil still fit the bill. However there are concerns about a long term US/China trade war. Also any of the ETF’s that do 2 & 3 X what the major US indexes do.

Bottom Line – We are oversold and ready for at least a short term run – Investors 411 opened a 5% position in TYH (3x financials) Friday at 117.14 A short term trade with a tight stop at 177.14.  Will take 1/2 profits at 5%+ rise

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

The 2nd Maine Militia’s Gazette

To paraphrase the 2nd Maine Militia (See Nov. 17 blog) it’s not about left vs. right, Democrat vs Republican, but up versus down . So let’s take a look at a brand new news outlet only found here  at Investors411. In the style or philosophy of the 2nd Maine Militia – here’s how their paper might look.

• Headline – Crisis in Duba i – Thousands have died (from Bangladesh, Philippines, India and other poor countries) building a wealthy playground for the uber rich Arabs. A place where wealthy Americans and Iranians can rub elbows built on the backs/lives of third world labor.
• The private company that created this years hottest American holiday present the Zhu Zhu dolls/pets has just announced a proposal for three new factories. Sorry no factories in Maine or the USA – they’re all in China.
• Front page editorial-Keeping the Masses Distracted – Will someone tell us why CNBC and CBS business news feature stories are -  the selling of Michel Jackson’s rhinestone glove, the scratches on Tiger Woods face (wife or car accident) & the latest block buster teen vampire movie?  This is America Corporate media news.
• Another local bank collapses . The big shadow banks that caused the financial meltdown are getting bigger with our money while their competition – the small local Maine/USA banks continue to fail in record numbers.
• Guest editorial from Robert Reich – The 3 classes of Americans – #1 Those 25% of Americans whose kids are on food stamps, #2 those Americans who are managing, but worried about loosing value of homes & jobs #3 Those few Americans who have taken home even more winnings since 2007 like Goldman Sachs executive. LINK

Some of you may think that our fictitious Gazette is over the top. It does focus on the ugly side of globalization and unregulated wealth creation (sometimes  misnamed capitalism or free markets). It does pacifies the reader with obsessions about celebrity.  Maybe the scratches on Tiger’s face is what will solve the humanities problems and just maybe you’ll think about forming your own 2nd Maine Militia.

KISS & STOCKS

Keep It Simple Stupid

For those of you whose eyes gloss over in the stock section I’ve tried to KISS it today, but I left a little in for those who want the deeper analysis

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-1.48%	down
NASDQ	-1.73%	down
S&P500	-2.10%	down
Russell2000	-2.53%	-

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals, Fundamentals & Analysis

For the moment the Dubai economic meltdown has stabilized because oil rich Abu Dhabi has promised to bail out the over leverage Mid east playground for the ultra  wealthy.

Big predictable economic news for the week is Bernanke’s approval hearings in front of congress, Obama’s more troops for Afghanistan and the monthly jobless figure on Friday

Black Friday saw a significant increase in traffic and only a o.5% gain in sales according to early reports. reports. Today is Cyber Monday where shoppers do a whole lot of on line Xmas shopping (start of the online buying season)   These numbers are Bearish for retail stores. It probably means far more people were out seeking the bargains and they will do less shopping for the rest of the holiday buying season.

The dominating factor controlling  stocks prices continues to be the dollar.

FEARLESS FORECAST – Last week’s fearless forecast of an up week was crushed by the Dubai crisis .  Markets have rebounded from Dubai across the world and the damage seems limited in investors/traders minds. Looks like we will return to general trend of dollar down and stocks up till Friday’s job numbers. – Outloo k – flat/down week.

Coming up more on - Military escalation in Afghanistan & growing problems with Iraq. Any attack on Iraq would send the dollar higher and stocks lower . Perhaps Obama’s announcement of 30,000+ troops in Afghanistan will have same impact.

Now going to get a bit more technical

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

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Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI has broken out to new yearly high

The BDI fell -145 points yesterday and closed at 3994. Technically  the BDI broke out through its major resistance level 4291 (this year’s high) over a week ago.  The BDI has rallied about 1900 points since late September. Now, 7 down days in a row & through the former resistance and now support level 0f 4291.

What it means – Long term we created a higher high on the chart = Bullish. Short term we are on the way down = Bearish The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets.

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The Dollar is currently the #1 forecasting tool .

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

US dollar rose a HUGE +1.00% Friday . The dollar closed at $74.98 . The $75.00 support level crashed and burned on Wednesday but, T he Dubai crisis is going send money back into the dollar and out of the stock market.

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$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at -27.62 This is approaching an Oversold Position 

Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

I did get a chance to do some editing in the Positions Section of the blog. ( Note 2 added positions)

From Friday – Probably going to take some profits today (sell 1/3+ positions) in FXI, EWZ, GLD & all of DGP. Hopefully, will get a chance to buy back into these positions when the McClellan Index gets oversold. Personally I did sell/take profits on 1/3 of FXI & all of DGP .

Long Term Outlook = CAUTIOUSLY BULLISH/NEUTRAL

Health Care

Robert Reich – fromer Sec. of Labor

Frankly Abby Gold (see comments on right) says it all on health care .  This country used to care. There was a bond between neighbors. Now the rich get socialism whenever they are in trouble and the poor and working class average Americans get ground into the ground. This is a mega trend in the USA that’s spiraling in the wrong direction.

Economist Robert Reich has an editorial on – What happened to the public option. LINK

Mexico & Afghanistan

(to be continued over weekend)

KISS & STOCKS

Keep It Simple Stupid

For those of you whose eyes gloss over in the stock section I’ve tried to KISS it today, but I left a little in for those who want the deeper analysis

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0.90%	up
NASDQ	-1.66%	up
S&P500	-1.34%	up
Russell2000	-2.41%	-

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals, Fundamentals & Analysis

Volume – Volume  rising (see above chart) is important, but it saw still below average. So there is no real big forecasting signal.

Something called Options expiring (3rd Friday of each month – today) is probably what’s behind all this volume. The more sophisticated short term traders are forced to cover some of their bets at the last minute before they have to buy or sell a stock they have an option on.

If you get lost with a term or want to know more use Investopedia.com dictionary and other help programs or Stockcharts.com tutorial programs.

Why Stocks Move Lower – Yesterday we did Higher and probably the #1 reason is the government shoveling so much money into the economy at almost zero interest rate forces people into stocks. The alternative is a measly couple points in a bank savings account or add another point for a bond. So here’s the downside -

• Job, Job, Jobs – Companies fired workers and now first will  first hire overseas where it cost less and the growth is greater.
• American’s middle class went overboard into debt and is now saving more. Our consumers are saving more, therefore, not buying. Good to save more, but bad for economic growth
• Trust – The rich (shadow financials & others) get risk socialized by the government and the middle class gets capitalism. Folks know their getting screwed – they/we are angry.
• Foreclosures – still happening at a far too big a rate despite stimulus.

The best case scenario for economy – All those who made huge money in the stock market or trading credit derivatives this year buy and eventually this will “trickle down” to the middle class.

Important to remember – Stocks can move in one direction and the economy in another.  Perversely, in the short term, if job loss stays high interest rates will stay low to act as a counter balance.  Stocks historically always rise in low interest rate environments.

Now going to get a bit more technical

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

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Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI has broken out to new yearly high

The BDI rose a n insignificant  +18 points yesterday and closed at 4661. Up 16 days in a row . Technically it broke out through its major resistance level 4291 (this year’s high)  The BDI has rallied about 2400 + points since late September.

The BDI is starting to go PARABOLIC – starting to move up too far too fast-inevitable result is a crash and burn.  We seem to be at the top of the parabola. DANGER for Bulls

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The Dollar is currently the #1 forecasting tool .

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

US dollar rose  +0.31% yesterday. The dollar closed at $75. 29 . This is back above the major $75.00 support level. 

CAUTION – The first breakout (up or down) is often false. This happened two days ago . Dollar back in trading range. The top of that range is the falling 50 day moving ave. now at $76.02

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$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at-22.67 This indicates stocks are slightly oversold and momentum for bears is growing

Even though the Dollar Rules consider overbought levels (60+) on this index a point to lighten up on stocks)

Key to chart – Zero  is roughly  neutral and roughly when you approach to @ +60 you are overbought and approaching-60 you are oversold . Buy at oversold and sell at overbought. Nothing is absolute in this chart. In fact using the moving averages as a central point is better than using zero. Nothing is absolute about the minus or plus 60 number either.

Oversold conditions = buy, Overbought positions = sell

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

Sorry have not had a chance to update Positions section in well over a week – see past updates.

Long Term Outlook - We are on the cusp of change between CAUTIOUSLY BULLISH and NEUTRAL for stocks.

Bottom Line – As Investors411 warned US equities are turning negative.  The point to add to positions will NOT come till we reach oversold positions on the McClellan Oscillator

Long Term Outlook = NEUTRAL

Al Frankin’s Rape Legislation

30 old white Republican men voted NO on Senator Al Frankin’s legislation “that would have required defense contractors to allow their employees access to US courts in cases of rape or sexual assault” The case of Jamie Lee Jones who was gang raped by fellow Halliburton/KBR employees in Iraq and then held prisoner in a trailer sparked this legislation.

To protect Hallibuton these senators had to side against American rape victims. The 30 old white Republicans (including McCain) “might want to rethink your allegiances.” (Jon Stewart ) LINK to his devastating video and story on this

Trickle Down Economics/Health Care

Trickle Down economics started with Ronald Reagan and it has sure worked in making America’s rich richer and disintegrating the middle class. Two editorials by Robert Reich and Frank Herbert t deal with this. (Herbert fails to lay at least some of the blame on Obama.)

• Safety Nets for the Rich LINK
• Why Obama Has to do What Letterman Did: Refuse to Pay Hush Money LINK

To Big To Fail

NYT award winning financial columnist Andrew Sorkin’s book Too Big to Fail has an interesting excerpt in Vanity Fair LINK entitled Wall Street’s Near Death Experience. Yes these same guys brought us to the brink, but the excerpt is enlightening. Also in NYT is The Race to Save Lehmann LINK

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0.67%	up
NASDQ	-0,76%	up
S&P500	-0.81%	down
Russell2000	-1.15%	-

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals and Fundamentals

US Markets broke out to new yearly+ highs in weak volume.  All that money on the sidelines is staying there. Technicals – Volume in no way confirming the price move higher – However, volume, as a #1 confirmation factor, is getting trumped by the ever sinking dollar.

From yesterday – The FED and the US government is not going to stop shoveling cash at the market as long as unemployment is so high. US companies are not hiring and will first hire abroad where labor is cheaper and growth faster.  So the cash shoveling will continue and Wall Street, once over bought situation is corrected, will continue to rise and the dollar fall. Two major points

• The rally is based on the dollar falling
• As long as unemployment grows there is no reason to stop the Fed from stimulating the economy

Therefore high unemployment numbers inversely benefit Wall Street stock prices.  The more we stimulate the economy (0% interest rate loans from to bailouts) the lower the dollar falls. The more we simply print money the  lower the dollar falls and the more profit American base companies make because their goods cost less abroad. (see below for more)

Apple has grand slam earnings report. Flood of earnings this AM. CA T (big equipment maker) also a grand slam.

Both the BD I and the Dollar are bullish for stocks

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Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI is @ 37% off its high (early June) Before that it gained almost over + 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI rose +38 points Friday and closed at 2766. A higher high price on its chart pattern has been confirmed =  Bullish for stocks & world trade right now

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$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

US dollar fell -0.37 % The dollar closed at $75.37 . We have developed a support now resistance (it’s called support on the way down and resistance on the way up) level just below $76 . The dollar closed below its support level. = Bullish for stocks

NB -

• Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.
• A slow decline in the dollar = good a rapid decline = bad .
  

Last year’s low was around $71,(March 08 ) so there is a long way to go before the major and very crucial support level.

Therefore, The dollar can drop much lower and stocks rise much higher till support levels are reached

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

Review of Positions (Part 2) (more on stocks tomorrow)

SPX or SSO – This is where you park money instead of cash. Only downside here is it takes 3 days to get to use this $ to make a trade. More aggressive traders can use SSO Longer term investors use SPX (This ETF does 2x what the S&P 500 does) Recommendation Buy the Dips till the dollar drops to near $72 .

NVS, AAPL, CSCO, MVIS, GS , & JPM are all stocks that have been recommended for traders to buy on dips. Would add CAT to that list

EWZ – Up way too far too fast.  Trader s should lighten up on this ETF

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

What’s Up? Mullah’s at war – Split in Shia Muslim Orthodoxy – Obama’s financial Fix – Change in Market Outlook & Why – Iran want’s nukes – IAEC’s #1 – The dollar, BDI & other forecasting tools – Reading the Tea Leaves and more.

Major Develops in Iran

photo of yesterday’s opposition demonstration -Huffington Post

List of Major Devlopments

• The “Assembly of Experts” Top Mullahs in Iran that choose the Supreme Leader will hold an “Emergency Meeting”
• Massive demonstration again yesterday (see photo) More scheduled
  
• Continued violence/deaths and signs that some elements of Army are supporting/protecting demonstrators.
• The most Senior Ayatollah is backing the opposition.
  
• It’s like the cardinals of the Roman Catholic Church split into two large different warring faction. Perhaps like when Martin Luther and the Protestant reformation split Christianity centuries ago. Remember this is the Shia branch of Islam.

The three key sources continue to be The Huffington Post’s live blog . Andrew Sullivan’s blog and the BBC .  News breaks there well before cabal or networks. The first two are 24 hours a day bringing live twitters and videos.

One Caution – Like many I’ve been caught up in the “fascist” oppression of the Iranian people. (one of your posts – “One suggestion. Instead of calling Ahmadinejad a holocaust denier, why not label him a fascist beast who would kill anyone from Israel to his own people to rule the world.” )

What if the opposition wins and still wants nuclear weapons? How different are they from their predecessors?

Iran wants nukes – Mohammed ElBaradei – Nobel Prize Winning head of International Atomic Energy Commission.

New Financial Rules

Obama is announcing the new financial rules and regulations today. Lots of it has been already leaked. This is just a start, but at first blush it looks like they are weaker than many expected . NYT’s lead story on this.  Basically think economist Robert Reich has clearly defined the changes we need. “The Three Changes We Need” is his Tuesday, June 16th editorial.

Sorry, have not spent enough time on analysis and time is short (more tomorrow)

This is just the start – Congress is going to debate this over the summer.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index	Percentage %	Volume
Dow	-1.25%	up
NASDQ	-1.11 %	up
S&P500	-1.27%	up
Russell2000	-1.58 %	-

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Technicals & Fundamentals

Markets took a less sever, but still significant hit yesterday. Again the volume was below average. (The NASDQ was close to average) Volume is NOT confirm the breakout of the trading pattern over two weeks ago and volume has not confirmed the move back into that trading patten. The benchmark SPX (S&P 500) closed at 911 and has several significant support levels around 900. (see charts)

Significant forecasting tools/Indexes for stock markets

$USD - Repeated statements in brown – The dollar is the index to watch You could write a book on the dollars influence on everything but for us the bottom line right now is – When the dollar goes down-stocks and oil prices go up and visa versa. After two significant days where the dollar was up a total of over 2% it fell -0.58% yesterday The dollar broke to higher through a resistance level (see chart). Investors 411 mantra is Dollar rallies = Oil & Stock prices fall. Yesterday was one of the rare days this did NOT happen.

XLF - The ETF that tracks financials (mostly shadow banks ) have been stuck in consolidation for over 3 weeks. -1.73% in increased but weak volume

WTIC – Oil prices down -0.21% yesterday. Closed at $71.15

BDI - The Baltic Dry Index measures the flow of goods (world trade). 24 up days in a row, 6 down day in a row, & now a 4 day rally. Bullish sign.

Reading the Tea Leaves

Monday’s lead statement - Expect a tired low volume market to retreat this week . This technically still looks like a market that just got too over extended – went up too far too fast and needs a breather.

The rising dollar is technically the most important influence on stocks. The correlation between the dollar rising and stocks doing the opposite is perhaps greater than 80% over the last few months.

Because we have fallen back into the old consolidation pattern, technically we have had a failed or false breakout. Therefore the Long Term Outlook is changed back to NEUTRAL

You have a Grand Central Station of support levels all converging around SPX 900. SPX now at 911. Then the last line in the sand the May low @875 Taking out  these levels would be a bearish. If 900 falls expect 870/875.

NB – Volume is confirming Nothing. So it looks like the support levels will hold. View this as an opportunity to buy (especially for traders) Longer Term investors IFN (India)  is beginning to look like a buy the dip opportunity. Strong volume is the enemy of bulls.

CAUTION – “This is not your parents buy and hold forever market” We have moved away from the edge of the financial cliff, but the long term structural problems still exist in the world’s # 1 economy and fixing those is going to hurt economically.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Over the weekend three outstanding editorials with different economic points of views have surfaced.  Each editorial outlines the economic problems created in the USA, their solutions and their impact on the world.  What this country does now is going to impact YOUR investments, YOUR job, and YOUR well being for decades to come. The better informed YOU are, the better decision YOU can make about YOUR future.

• Joe Nocera each Saturday writes and outstanding business column for the NYT. His piece this week – This Time, This Time, Geithner’s Plans for Banks Makes Sense. Nocera takes on the critics and supports FDIC chairwomen Sheila Bair who thinks that “this[Geithner's plan] is a necessary cleansing process.” His conclusion after admitting the plan has flaws -”But it represents the beginning of something we should be applauding, not condemning: cold, hard reality.”

• Robert Reich who served as Labor Secretary in the Clinton administration and is an influential Berkeley economist writes an outstanding editorial in the WSJ. He writes about Obama’s Focus on Improving Human Capital. Reich/Obama want to build the economy from the bottom up. He repeats his often used statistic. “In 1980, before Reagan took office, the highest-paid 1% took home 9% of total national income. By 2007, before the economy melted down, the richest 1% was taking home 22%.”

• Simon Johnson an extremely influential professor from MIT’s School of Management writes outstanding piece in the Atlantic - The Quiet Coup Johnson explains the solution  the International Monetary Fund (IMF) would enforce if their hands were not tied by politics. The IMF has been through this senerio many times before when a rich oligarchy takes over an emerging market. This time that financial oligarchy is in the USA and the implication of what happens is global. (more on SJ Monday)

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AS ALWAYS, DO YOUR OWN RESEARCH BEFOE INVESTING

Since Health Care  is clearly part of the long term structural economic problems of the USA and 3 of the last 5 comments on the blog have been about heath care (see/click on right hand side of blog for your comments) today’s focus is health care.  But first one of the best adds ever happened to be recently contained in the Atlanta Journal’s personal section –