The Vampire Squid

The People vs Goldman Sach’s

Matt Taibbi back with another editorial in the Rolling Stone. Matt’s the guy who immortalize GS as a Vampire Squid sucking on the face of humanity. He just keeps getting better and better. You can be damn sure that none of the cheerleading financial channels will dare to have him on.

Here’s Some of the money quotes

“Stealing by corporate America is practically a national pastime.” The ruling wealthy plutocracy that benefits from GS rules the USA. Almost untouchable. Yet their financed media finds ways of pitting the middle class who they use and abuse against each other and the poor.

Vast amounts of wealth have been transfered to the wealthy elite over decades while they focus/fear monger you on racial prejudice, patriotism, religious bias, jealousy, greed, endless wars, cutting everything except the aristocracy.

TREND – As other countries develop their middle class, the consumers of the shrinking middle class in the USA will become even less important.

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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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Index	Percentage	Volume
Dow	-1.02%	up
NASDQ	-0.93%	up
S&P 500	-1.11%	up
Russell 2000	-1.78%	-

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Technicals, Fundamentals & Analysis

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

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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 rose a whopping +0.96%yesterday. Third major move higher in 5 day broke through the 50 day moving average. It’s the major reason stocks fell yesterday. Long term trend is bearish, but the short term trend is clearly bullish. For stocks = Bearish
• McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] Mo on fell dramatically to +1.98. Back squarely in the middle. = Neutral

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Paul’s Corner

We were all set up for our 4^th day of the rally, futures looked good and then after the opening bell, the heat mat of the S&P 500 turned almost solid red. “Humph looks like a trying day coming“. Reports of a growth in inventory of crude and gasoline started a slide in commodities. The EURO fell with concerns over Europe’s debt crisis, the dollar rose and you guessed it the market took a hit.

YSL 4 had mixed trading and nothing gross happened to the group. SPRD, CPHD and SAP all had a good day.  SPRD  needs to settle down and base a bit before a buy would be safe. RNOW dropped below the 50 but it did that on low volume.  Volume on many of the YSL 4 stocks was normal or even low.

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As I often state, I use HGSI software as my primary stock analysis program. It has great interactive charts, the best screening in the business, the ability to make your own groups and indexes along with excellent support.

Next week May 18th Jeffrey Scott a HGSI user is going to present a HGSI Webinar and will show how he uses HGSI in his successful trading. I invite any of you who are interested in a quality analysis program  and building your trading skills to watch the webinar.

The Power Of HGSI Webinar May 18th from 8:00pm to 9:30pm EDT Registration is required and the webinar is free.

See LINK

Please note, I am a HGSI user, I pay a monthly fee for the program and I receive no compensation for recommending the product.

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These past few months have not been easy to trade with a full stomach. Folks are asking for longer term trades,  all of the stocks on YSL have the quality for long term trades. UFS Domtar, a paper company was added to Your Stock List on August 23, 2010. Priced about 57.15 it closed yesterday at 104.26, with an 87% gain in 9 months. It also has a small dividend.  Common stocks can be nice long term investments. It looks like UFS should have not been removed from YSL.

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

Remember, you are responsible for your investment decisions, and I am not.  Please do your diligence, and please take ownership for your actions.

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Editor’s note – Click on POSITIONS at top  of blog and scroll down for YSL 4 & 4.5 Stocks mentioned above or LINK here

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Dividend Stocks

Caution - The Critic (in the comments section of the blog) reminds that the two high dividend stocks NLY and ANGC are too far above their 50 day moving averages to buy now and longer term investors should wait to buy the dip.

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Positions

Reading The Tea Leaves – From Yesterday – MO has been an amazing accurate forecasting tool for the past year.  It saying we are getting near a technical top – Yesterday saw a major market reversal led by commodities (silver and oil)

Investors411 mantra has been to wait for the MO to get down toward -60 to buy.

The commodities trade (commodities rally of many months) is unwinding as the dollar goes higher.  Speculators, hedge funds, huge institutions etc. who have built up major positions are unwinding those positions. It took many months to build these positions in commodities and the dollar. It will probably take more than a week to unwind these positions.

UUP – The tracking ETF for the dollar still the index to watch.

Disclosure - I have personal ETF positions in REMX and manage a fund that has a 5+ year position in GLD. I also own NLY and AGNC mentioned above

I have a position = Either I own it personally or a member of my family does.  I also manage an account for a non profit organization.

The Investors411 Portfolio – The stocks in YSL #4/4.5, REMX, plus all trades mentioned  in this section. (example the SLV and ZLS trades mentioned in April and May) AGNC & NLY will be added on a dip

• REMX – Still trading above 50 day moving average which would be a buying point if your interested in owning rare earth mining companies.
• ZSL (double short silver) – A potential trade today. Silver is just a % point of two from its last week low. Silver bears are going to try break the bulls today. If they do you might catch a significant downside move.  All of this depends on the dollar. Dollar/Euro trade is at a major support level. Bad news in Europe could set off a chain of events that drive Silver and oil lower.  Not a solid trade with and established trend, but one with potential because momentum with bears. Will mention in comments section if I am about to make trade.

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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

CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

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When Will The Stock Bubble Burst?

Here’s my read of the tea leaves on YOUR  most asked question

First, stocks crashed because our banksters ran an over leveraged casino capitalist banking system that caused a stock meltdown in 2008/early 2009.

It’s important to realize how little was done to fix this problem. In fact, unlike our last huge savings and loan’s crisis (circa 1980) when over 1000 banksters went to jail, NONE directly associated with this crisis went to jail (Bernie Madoff was indirectly related)

Instead the banksters got a huge TARP loan, the ability to borrow money at almost 0% interest,  quantitative easing and other perks from our government and the Fed bank. This package deal is in the trillions of dollars.

No jail time, a few weak rules, and a tsunami of fresh capital. The shadow bankster’s, and their politicians are that powerful.

So basically the same corruption continues to grow.

Matt Taibbi in the Rolling Stone has a must read piece on this – Why Isn’t Wall Street in Jail (Warning – Some appropriate graphic language in editorial, but he goes case and point through the whitewash)

Rolling Stone photo

Our shadow banksters along with a huge deficit is the foundation of the problem.

Stock Bubble – Tomorrow

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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Index	Percentage	Volume
Dow	+0.50%	up
NASDQ	+0.76%	up
S&P 500	+0.63%	up
Russell 2000	+1.02%	-

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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/manipulated stock bubble.

• Bubbliciously, once again stocks rallied in below average volume. NASDQ was a bit above average.
• Mantra #1 – till it no longer works - still endorsing the concept that the Fed POMO [schedule] is and will be the key factor in keeping a long term rally going. Another term for this is quantitative easing or QE #2.
• Mantra #2 – 50% to 70% of the volume on US stock exchange is soaked up by High Frequency Trades chasing imbalances in trades. This means 30% to 50% of volume is made up or real or valuation investors.
• You can NOT compare, use many technical tools, or historic data to evaluate this market because it is being manipulated higher by our Fed or central bank.
• Two significant reasons allow the Fed to keep the liquidity tsunami flowing - Housing prices are hurting & Unemployment figures are high.
• “Understanding Inflation and Why Little is Good for Equities & The Economy” by Jeff Miller

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Shorter Term Forecasting Indexes

• The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar fell  yesterday  -0.45%. There has been the start of a  short three week bullish dollar,/bearish stocks pattern.  - For stocks yesterday was bullish but the new developing pattern is a problem = Neutral/bearish
• McClellan Index – (MO [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] Fell to to +27.22. Over the last three months the new parameters seems to be +/- 30 as an overbought/oversold level. Note: the +30 barrier has become a very strong resistance point. Stocks outlook = Bearish/Neutral

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Bulls Remain Undaunted – Photo from Dave’s Daily

Reading The Tea Leaves

The same Old Song – A manipulated US stock market is moving higher on stimulus, low interest rates and quantitative easing. Financials and stocks have received unbelievable support from our government and the Fed.

The MO  has worked very well over the last few months as a short term forcasting tool. The MO has made +30 a significant barrier. (see chart) So if our manipulated stock market gets too far above +30 I’d start exercising more caution.

The dollar correlation has not been as exact, but has roughly worked. So unless we see the dollar dropping significantly, we should see stocks consolidate today.

Longer term-  As long as housing prices are hurting and unemployment is high the Fed should keep flooding liquidity into the market. This greatly benefits the big shadow banks that have not had to reform the casino capitalism that had and now continues to make them rich.  All of this is bubble-iciously good for stocks.

What to watch today

UUP - (Tracking ETF for dollar)

Remember - The dollar is a contrarian indicator. Bad dollar = good stocks

AAPL –  The tech general broke out to a new high and continues to trade above those levels.

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Positions

Commodities are being driven higher by inflation fears in emerging markets. The Fed’s POMO program/QE#2 is a/the major driver of this.

Considering an even higher leveraged ETF for small cap stocks TNA (see below)

UCO -(2x oil prices)  Wait till it consolidates lower  and returns to pre Egypt crisis levels or below.

REMX (Rare Earth ETF) – Really believe this a good long term holding. Considering buying more on a dip today

DGP – (ETF is 2X gold) .

DBC – (Commodities ETF) For a more complete list of commodity ETF’s see POSITIONS listed at top of blog  DBC is tilted to energy. Perhaps preferable or a good alternative would be *DJP that is more agriculture and metals or RJA (all agriculture)

RJA (Agriculture commodities Index)An  ETN, not an ETF.

UWM (2x small cap stocks) TNA (3X small cap stocks) Would add TNA on dip

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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.“ (YSL#4 is under construction.)

The Vampire Squid is even growing because hidden corporate cash is now shaping the very fabric of our democracy.

In short Taibbi points out that America has become “a paradise for high class theives“ and congress their “willing lapdogs“ who’ve hijacked the American workers into backing policies that favor the rich. He identifies the godmother of the “grifter class” as Ayn Rand and her chief disciple Alan Greenspan.

You can read a lot more about the Vampire Squid and others stuck on your face, the American media, lobbyists and most politicans in Griftopeia – Taibbi’s new book.

“The financial crisis that exploded in 2008 isn’t past but prologue. The stunning rise, fall, and rescue of Wall Street in the bubble-and-bailout era was the coming-out party for the network of looters who sit at the nexus of American political and economic power. The grifter class—made up of the largest players in the financial industry and the politicians who do their bidding—has been growing in power for a generation, transferring wealth upward through increasingly complex financial mechanisms and political maneuvers. The crisis was only one terrifying manifestation of how they’ve hijacked America’s political and economic life.”

Source

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 next Wednesday Fed meeting is the big event.”

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.”

What in a mirror? A vase, A slave, Your soul?

Wall Street Killing America’s Soul

Paul R has referenced an excellent piece by Paul B Farrell in the comments section of the blog. It’s exactly what Yankee Bob talks about (again in comments section) when he states-

No matter how small or logically challenged the Tea Partiers are they are invaluable to Corporate Capitalism. [I call it "casino capitalism"] It gives the major players and shakers a human face to spread their poisonous agenda . It’s like interviewing a slave that believes they are being well treated by their master so why don’t you become one too.

You should check out Farrell’s entire editorial, but let’s look at the “hyperspeed, toxic irrationality… of Wall Street (“Corporate capitalism” or “casino capitalism”). Farrell from Market Watch –

• All Wall Street bankers are worth 100 times any Main Street investor
• All Corporate American CEOs deserve to make 400 times their workers
• All children of all Forbes 400 billionaires deserve to inherit tax-free
• All lobbyists deserve millions when winning billions for special interests
• All taxpayers should pay for catastrophic mistakes of Wall Street Fat Cats
• All rich hedge fund managers deserve to be taxed at capital gains rates
• All senators deserve to become millionaire lobbyists when they retire
• And Goldman Sachs CEO Lloyd Blankfein deserves a $100 million bonus

This is the reality we live in – A reality that creates the deficits that John S, Me and even the TTP’s are outraged over. Yankee Bob understands that so many perhaps unaware slaves (the TTP’s) to the system that privatizes gains, socializes losses & creates deficits. Jim J. rightly concludes that we don’t want “less government,” but “Effective Government.”

Bottom Line – What will you do? Just keep staring in the mirror or take action.

The General & The President

Headline news around the US is about the Rolling Stone article The Runaway General. Will General McChrystal get fired or hand in his resignation for insubordinate remarks (he’s apologized) he and his staff made about Obama and his administration.  Tom Friedman’s view

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	-1.43%	flat
NASDQ	-1.19%	flat
S&P 500	-1.61%	up
Russell 2000	-2.14%	-

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

Technicals, Fundamentals & Analysis

Analysis of stocks has become an analysis of what the “Black Boxes“,of  huge institutions with their high frequency trades & computer algorithms are doing. Their focus ,now, is on the huge currency trading markets.

Fed makes interest rates announcement today.

YOUR Questions

From private emails and public comments lets go over four aspects-

• The BDI – I brought back the BDI Index because it was reaching a critical mass. This measurement of world trade had fallen so far and is close to a major support level that the fundamentals (trade) factors it represent were too big for even the Black Boxes to ignore.
• The MO – It’s not a magic bullet. But it does show you when the odds are in your favor to make a trade. There are many similar Indexes, but this one was chosen because it does NOT use stock volume. Volume has become less relevant because the “Black Box Computers” have taken over trading.
• This is NOT your parents buy and hold market. The USA shadow financial corporations are running an opaque unregulated banking system. We have a congress and & administration that is unable or unwilling to balance the system so YOU have the same advantages as (as Yankee Bob would put it) your corporate masters.
• Because of point 3, everything is more opaque & more volatile. Emotionalism, fear, and irrationality make owning most stocks far more risky than in the past. Example, Right now the BDI besides loosing 40% is close to breaking down. A breakdown here greatly increases the chances of a second major recession on top of the first.

Significant Indexes

• McClellan Oscillator (MO) fell significantly to +1.01 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. NEUTRAL
• US Dollar –  The dollar rose yesterday +0.13% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Dollar up = stocks down and visa versa. This was the first two up days in a row for the last 13 sessions. Yesterday confirmed the previous days more significant move. For stocks =Bearish
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped. BDI is in free fall from @4200 to  2547 yesterday. This is a huge -39% drop in 5+ weeks.  Often a leading indicator for stocks. Now at/ just above a support level. Rate of fall declined yesterday. This index often makes slow changes, so diminished decline (@40% less) could be the start of a reversal. However, clearly long term  = Bearish

Reading the Tea Leaves-

Apple computer seems to be single handedly keeping this market afloat. It’s one of the stocks on YOUR Stock List. However, emerging markets especially China is still the key to worldwide growth.

The mantra continues to be watch FXE (EURO currency ETF) and UUP (US currency ETF)

Positions

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

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

DGP is ETF that is double long gold. Investors411 plans to buy the dip in this ETF.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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Center For Public Integrity

The two top groups of journalists out there doing investigative journalism in the public interest are the Center for Public Integrity. and

OpenSecrets.org

Both groups aren’t afraid to go after the polls and power brokers/lobbyists whoever they are. Stories like-

• 97% of the violations happened at 2 BP refineries
• The companies with the most lobbyists have turned this into @ 15% greater profit in each of the first two years
• Top ten lobbyist firms take financial reform to the Bank

The main focus of YOUR comments over the last few days has been on BP. These two sources above will help. The Huffington Post today echos what YOU said yesterday British Petroleum’s is Worth More Dead than Alive. Yesterday’s -15% drop in BP stock price, if continued, means that YOU – the Tax payer could end up paying for this disaster because BP may soon become bankrupt.

Rolling Stone, sorry Obama fans, front page story is The Spill,the Scandal & the President The Spill is clearly BP’s fault, and Cheney/Bush put the lobbyist and former business executives in place in far more than the energy industry. But, Obama has failed to clean house. Not the change we can believe in

Big Political Shift?

The lead NYT story today focuses on what Investors411 mentioned yesterday – California’s overwhelming passage of Prop 14 -

“traditional party primaries will be replaced in 2011 with wide-open elections. The top two vote-getters — whatever their party, or if they have no party at all — will face off in the general election.”

There are positives and negatives in this legislation. But overall it seems to give more power to moderate voters or have candidates appeal to a broader base in order to win. There are lots of variables, but its certainly a change.

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	-0.41%	down
NASDQ	-0.54%	down
S&P 500	-0.59%	down
Russell 2000	+0.10%	-

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

Technicals, Fundamentals & Analysis

Stocks are dancing on the cliff’s edge. Last few Investors411 have focused on how close the major indexes, especially the benchmark S&P 500 are from breaking their last major support level. The S&P (SPX) yesterday closed at 1055 and that edge is at @ 1040.

Major indexes are down @-13 % from their highs. Two different talking heads on the financial channels have mentioned -15% down is a significant figure. Because if its reached over 80% of the time it means -20% or an official bear market will follow.

When you combine this with the fact that we are close to this years low/support level its like dancing on the edge of the cliff.

Good news is stocks fell in decreased, below average volume = Bullish

Bad news volume increased as stocks fell & we ended the days near the low= Bearish

Bernanke spoke to the markets and created a bright picture in the AM. He emphasized “Don’t Cut Spending.” and our recovery while slowly progressing was still “fragile.”

Besides the dollars decline from highs what Yankee Bob brought up – BP - was behind the late day selling. Of course its impossible to exactly know since perhaps 80% of the trading is done by the huge sophisticated computers of mega institutions and their proprietary algorithms.

Futures are up dramatically this AM = Bullish

Significant Indexes

• McClellan Oscillator rose a bit yesterday to -21.25 [+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. We are a smidge overbought, but basically = NEUTRAL
• US Dollar –  The dollar fell about the same amount for second day in a row -0.35% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. The dollar had fallen @ 1.00% but rallied in mid afternoon, sending stocks lower. NB – The currency markets dwarf the stock markets in size.

Reading the Tea Leaves – The dollar will probably dominate stocks till earning season. That’s along time for a lot to go wrong or other shoes to drop in Europe. If you want to get really depressed here’s The Black Swan author Nassim Taleb on Debt, Spreading Like a Cancer

Hopefully you don’t share his gloom and doom, I’m more optimistic. But he makes some relevant points.

Traders – Rally day that gets sold into because few want to hold longs over weekend. Watch for news out of Europe.

Positions

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

Investors -It’s simply NOT a time to be in stocks. The long Term Outlook is negative – CAUTIOUSLY BEARISH. Why invest when it looks like stock will be lower over the next 6 months.  The single largest positive we have is stocks become so oversold they stage a counter rally and over the period of perhaps a week to a month you can make profits going long.

The second way to score (make money) is to use the ETF’s that are short the market like SDS (2X short S&P 500), UUP – that is an investment in a rising dollar and/or GLD. The strategy remains the same – buy the dip.

One reason to invest so that you make $ if the markets fall is a hedge. Your income may suffer, so at least on the other end you’ll make money.

Investors411 opened a 2% position in UUP (ETF tracks the dollar)at @25.60 (Have to double check this figure) Will buy more on dips.

Still holding very minor positions in VCI, ESRX & SDS

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING