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!

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

Senator Ted Kaufman -” The Most Important Person You’ve Never Heard Of.” - ABC

Investors411 readers have heard this name many times.

Too Big To Fail

Moody’s, has come out with a report that Congress has NOT solved the Too Big To Fail Shadow Bank Problem. A team led by Moody’s (one of 3 major credit rating agencies in USA) big wig Robert Young concludes:

“[A] key issue that challenges the feasibility of the proposed legislation is that it would not fully eliminate the issue of interconnectedness, nor is it likely that resolution authority could fully eliminate the systemic implications of allowing a large and/or highly interconnected firm to default, especially with respect to large international groups, and it certainly would not eliminate the risk of contagion,”

Shahien Nasiripor writing in the Huffington Post point out some obvious and alarming statistics. The 4 major shadow banks alone are growing and now control $7.7+ trillion dollars of money. [$7,700,000,000,000] Relativity = Lehman Brothers who collapsed in 2008 controlled $400+ billion. Therefore, each of these major  banks is @ 5+ times large than Lehman’s.

Now think, of the people/ businesses who have their savings in each of these major over leveraged shadow banks. If one goes down, like Lehman panic will certainly spread to others. Bada Bing, Bada Bang, Bada BOOM!

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 – Volume has not worked as confirmation factor for many many moons. = Neutral

Lack of volume shows hedge funds and giant institutions with their high speed computers are the dominating the US stock markets. Most average investors have long since got out.

As predicted, (it was no surprise) yesterday markets held onto the significant gains of the day before. = Bullish

A major French bank got toasted this AM because of  derivatives. Emphasis on the word French = Bearish

All eyes on monthly jobs report - Its safe to say this number is massaged or manipulated to a degree by whatever administration is in power. Comparing the USA’s unemployment rate with other countries is like comparing apples and oranges because of the different ways each country compute/massages its unemployment number.

The Employment Report- 8:30 EST  - +431,000 jobs, Employment number down to -9.7%, Private sector jobs only +20,000. Most jobs created by census. = WEAK Report – Worse than expected.

Significant Indexes

• McClellan Oscillator rose to +9.43 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. -  This is first time the MO has turned green (entered positive territory) in over a month. Momentum is up, but bottom line – this is NEUTRAL territory -   How the MO works.
• US Dollar –  The dollar rose a significant +0.52% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Currency markets are now being directly manipulated by out Fed and other central banks. This manipulation is to keep the Euro from falling. Dollar  at $87.25 Chart shows at least 6 attempted breakouts above @87.5 have failed in last 2  1/2 weeks. = Bullish.

Reading the Tea Leaves - – Stocks are focused on the jobs report.  Since stocks have rallied into the into todays jobs report, it would be logical for the Central Banks to allow the dollar to rise to a new high with a decent jobs report. Momentum is up for the MO and this currently translate to a short term positive for stocks.

Since Obama administration (leaked?) and Wall Street have built into the recent rally a much better than expected jobs report expect the following.

• Worse than expected numbers – Stocks take big initial hit, but US employment is not really a major factor in shorter term US stock prices – Hedge funds and giant institutions are far more worries about the monsters mentioned yesterday.
• Better than expected numbers – Would have to be blowout numbers. Really good numbers already built into stock prices. A blowout number will send the dollar and stocks soaring. Sometime during the day major players will realize that a soaring dollar will hurt stocks (even central bank intervention can’t stop a massive run) and this will temper gains.
• Obviously, better than expected numbers is good for the long term economic well being of the USA.

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own

Have NOT had a chance to update this/last weeks trade. You can find results in individual post over last two weeks

Consider ETF’s that short the markets.

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

-

Mental Health Break

From the NYT a photo/video Lens on the World

Absolutely fascinating!

Grant 1949 writes in the comments section yesterday - They just keep finding ways of stealing more money from the people who are just trying to survive… read full comment on right side of blog or here

Yep, It’s frustrating when you see the growing divide between those working just trying to keep their heads above water and the power elite in this country.  Frustrating when only 33 Senators vote to break up the big shadow banks. I agree

Hope we all can take some time out today and just ENJOY!!! Give yourself a Mental Health Break

Check out three of  hundreds photos I loved from the Lens on the World – (If you surf the site it just takes a second to load each photo these take @ 10 seconds)

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Stocks held onto the gains made on Monday in expectedly lighter volume. After you have a climax sell off in HUGE volume you expect volume to wind down. = Bullish

The old pattern did NOT returned yesterday, & institutions sold into a 1% rally at the end of the day.  Markets are dominated by huge institutions (Hedge Funds, Banks, Investment houses etc) who all have super fast computers and use trading algorithms. About 1:30 these “black boxes” decided to sell and we ended lower.= Bearish

The benchmark S&P 500 closed  at 1155.79. S&P next major resistance level is the 50 Day Moving Average at @ 1172 and support at @ 1150. This is the major trading range to watch. What happened yesterday was the upper end of the trading range was approached/hit (@ 1172) and the HUGE institutions sold. = Bearish

Great source for what’s happening live in markets around the world & in the US before 9:30 EST Wall Street opening at CNBC Slight upside bias for US right now,Europe, Asia basically up, but this could change in an instant

Significant Indexes

• McClellan Oscillator fell  to -53.40 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is just below OVERSOLD territory = buy = Bullish
• US Dollar – rose +0.38% yesterday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important  Dollar is down from last Thursday’s closing and Friday’s interday high. Still close to breakout levels = Neutral
• The BID – has broken out to a new 5 month high. The Baltic Dry Index measures the cost or flow of goods/trade between countries. This is positive for export countries like Brazil and China, Goods costing more means trade is increasing = Bullish

Positions

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

I revised all positions held by Investors411 yesterday. In POSITIONS (Click on the word at the top of the blog and scroll down to 2010)  As part of house keeping I’m going to eliminate the 2009 positions this weekend.

FXI – Investors411 bought this ETF in the China ETF.  This was done based on the volume behind China’s bounce on Monday and the fact that the BDI is rising.  Like most long ETF position there is a 5 to 7% stop loss limit.

Bottom Line - This is a canary in the coal mine investment - if China can NOT move up despite a rapidly improving BDI (see above) then stocks all over the world are in trouble. There are a lot of investors fearful of a China bubble bursting.  We’ll see.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

-

Senate Fails to Break Shadows

3 Republicans and 30 Democrats stood up to the mega Shadow banks & their lobby yesterday in support of the Kaufman/ Sherod Brown legislation to break these massive financials. Senate Finance Committee Minority leader Richard Shelby (R) & Senate Majority leader Harry Reid (D) vote yes. The above link has a list on how YOUR Senator voted.

Opposition came from the vast majority of Republicans and the Summers/Obama White house. This whole group is owned by  and protects the Shadows.

Hopefully Main Street can still win some crumbs or a pice of the toast instead of getting toasted in the finacial regulatory legislation.

Greece vs. USA

Greece’s problems are many ways are similar to the USA. The major difference is in the solution.

The central Bank of the USA can print money and loan it out at @0% to shadow banks who take that $ and not so secretly invest most of it in highly leveraged derivatives instead of less profitable loans to small business and consumers.

Greece can’t print money to bail itself out like the USA. It is under the jurisdiction of the European Central Bank (ECB). Therefore, it can only get TARP like loans from other countries and the IMF.

Some where down the line all the $ we print are going to slap us with inflation. But for now its kept us from sinking.

EU Contagion

The 2008 collapse has created massive problems for PIIGS and former Russian satellite countries. Example Spain’s unemployment is at 20% Yesterday’s map of debt obligation is the tip of interconnected obligations that spread worldwide and are exacerbated by derivatives sold on that debt.

Nobel Prize winner, Paul Krugman has an excellent editorial. Krugman recognizes the European Union’s main problem

“The problem, as obvious in prospect as it is now, is that Europe lacks some of the key attributes of a successful currency area. Above all, it lacks a central government.”

He goes on and explains how Greece is different than our governments bailout/relationship with California. The only logical endgame is -

“Greece leaving the Euro…unless European leaders are able and willing to act far more boldly than anything we’ve seen so far.”

Another possible solution from MIT’s Simon Johnson & co author.

Bottom Line for Investors – Fundamentally its hard to see a bottom until some resolution comes to pass. Till then, we will all be slowly twisting in the wind.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Massive loss in massive selling. Technically, we have gone elliptical to the downside. On a pure technical basis we are near the end of the downside move. = Bullish

However both fundamentally and psychologically the stocks across the world have been damaged and hopes of a V shaped worldwide economic recovery have turned into U’s, W’s L’s and perhaps worse. The entire group of talking heads on CNBC, the #1 financial cheerleading channel, looked liked deers caught in the headlights. The trotted out Nourille Roubini (a Dr. Doom) to jawbone this AM. = BEARISH

Failing to break massive shadow banks = Bullish

A technical glitch caused caused a massive 1000 point drop in the DOW (similar drops on all indexes)

Therefore, its hard to see any rally NOT getting sold into and another low on the way. Stocks broke through support levels like a knife through butter. The only piece of good news is in the short term stocks are getting so technically oversold that they are close to running out of sellers.

Monthly Unemployment rate up to 9.9% But non farm payrolls up +290,000 This is a STRONG number (@+180,000 was expected) and other months were revised upward. When Obama took office it was over -700,000 I have no idea why such a strong jump in numbers equates to a rise in unemployment. But end result = Bullish

• McClellan Oscillator fell dramatically  to -113.71 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. – In the last three years the MO has only reached pass this level 3 times –  10/08, 3/09, & 10/09
• US Dollar – rose another massive +0.87%. This marks the 4th day in a row of huge gains. You have to go back to the 2008 stock meltdown to see anything similar. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules Rising dollar almost always = falling stocks. The dollar is rising mainly because of the fluctuations in European currencies = Greek debt.

Bottom Line -Roller Coaster Rally day, but real long term fundamental problem from Greece spreading.

Positions

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

The DANGER WILL ROBINSON, DANGER DANGER SIGNAL is as many of you long time readers know is the signal to duck and cover. It the strongest warning Investors411 gives of impending doom.  Investors sold its remaining position in EWZ (Brazil) near the open yesterday for a loss.

Long term what’s happened is bad for US markets - The higher dollar is a killer for any US company that makes profits abroad and will take a chunk out of economic recovery including job growth. Until we see a measurable reversal in the dollar both stocks and our economy are going to have trouble.

Gold has become a proxy currency and Investors411 mentioned last week GLD was a good investment, but never pulled the trigger. A buy the dip ETF

Today, Investors will start nibbling on IMAX & perhaps ESRX on any further dips. Both stocks have compelling reasons for long term growth, except in another world wide meltdown. This may be a shorter term trade

Caution – There is probably more major downside to this market because of Greece. The first major rally will get sold into & Investors will use ETF’s that short the market when this occurs. Example SDS = @2x shorts the S&P 500.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

AP Photo

Financial Fraud

Few in Washington get it. Senators Kaufman & S. Brown do – (see past Investors411) Shadow banks and individuals/homebuyers entered into FRAUD The enablers of this fraud were the greedy, over leveraged, shadow banks. The very clowns/idiots/money grubbers in Washington ripped apart legislation that had kept us safe from this happening since the Great Depression are now trying to make everything right again.

Stupid Democrats - What the American Public Gets is the FRAUD – The liar loans, the bank misrepresentations, the crooked individual who entered some of these transactions. Now that you can debate & vote on this – pass the Volker rule, Kaufman/Brown legislation and get tougher on all your proposals.

Simon Johnson has another excellent editorial on this that you should post on your Facebook page, Twitter or email its URL to your friends and politicians.

Catastrophic Oil Spill

This environmental/economic disaster keeps getting worse each day

• NYT headline The continuing oil spill has reached the Louisiana coast
• NPR headline The environmental disaster could be worse in size and/or impact than the Exxon Valdez
• BP stock has lost  $26 billion in equity and fell -8.34% yesterday alone
• We all mourn the loss of life of those who died on the platform

Oil is still gushing from the break and it will take “months” to cap this. We can only guess the impact from Texas to Florida on the beaches, the economy, the environment and the wildlife that this will have.  Remember, the Exxon spill happened in unpopulated  Alaska.

Bottom Line Politically  -  Drill baby drill is dead

I’ve got oil on my face – Hope you’ve been checking out the commentary section There were 17 posts on this, financial reform, stocks and more.

I’ve long supported a comprehensive approach (like Obama) to energy as long as the more environmentally alternatives came first. Why – Simple economics- the growing energy demands of the world. From emerging markets to the USA energy demands are increasing and the supply can not compete with the demand.  We can’t build, far more acceptable, alternative energy alternative fast enough to keep up with the demand.

Yes that means I support nuclear energy. But but as part of a comprehensive approach we need enery sources to come on line quickly or we are going to be fighting wars over them.

Example – In my home state the Cape Cod wind farm after 10 years and Kennedy’s death has finally received national approval. But there will be perhaps years more litigation before it gets started.

We should absolutely be investing far more in alternative solutions and strongly against coal because its the least clean source.  A year or two ago I set up a chart on carbon emissions vs fuel sources from either PeakOilNews or the Oil Drum. Will try to find it again.

I reasoned after Katrina these oil platforms were safe – It sure looks like I was wrong.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Tech stocks which dominate the NASDQ rose yesterday in increased above average volume. Techs and small caps are usually the drivers behind any long term rally = Bullish

Good gains for S&P and Dow but in weaker volume. Lighter volume melt ups are the new trend.= Neutral

The big news for weeks/months will be how much the the Greek debt crisis spreads. A plan will be unveiled this weekend Now, markets are rising on this bad news. That’s =Bullish

Dollar falls back from breakout into trading range. Short term= Bullish

McClellan near zero (but it does have room to run higher till it reaches overbought territory) = Neutral

We seem to have a stampeding bull market. Monday’s have been good for stocks for the last 3+months. So traders should again run up stocks again today. Buy the dip. Short term trades in TYH & UWM could work on a dip.  Lot’s of Bullish signs out there

————–

On individual stocks – Check out Paul R and some others comments to the right. Do your homework if your particular growth stock has dipped down enough it might be time to buy.

The Trend Lives, but the Market is Tired editorial – Our McClellan does NOT show tired yet - always good to get second opinion.

XLF – Whose afraid of Financial Reform? Certainly not the big shadow banks that dominate the XLF (the financial ETF) It gapped higher and ended the day a huge +2.29% higher.  They have the money, power & lobbyists to squeeze what they want and get a weak financial reform package out of congress. Investors & traders in the XLF are basically saying financial reform is a joke. One caution volume diminished from previous two days.

Significant Indexes

• McClellan Oscillator rose rose to  -1.74 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is close to the middle of NEUTRAL territory
• US Dollar – fell -0.39% yesterday.  [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules. Is very important.  Dollar closed at $82.01. The breakout of the trading range lasted one day  and the USD has fallen back from its new high into its old trading range. Rising dollar almost always = falling stocks.

Positions

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

IMAX reported earning yesterday. While the earnings were better than expected, traders “sold on the news.” This is a common occurrence especially for a stock that has move up a lot in the last few months. But even more importantly a stock that moved up 15 to 20 % in the few weeks directly before earnings. Therefore, a great earning report was already built into the price and traders “sold the news” (a Wall Street term). IMAX was down a lot more, but ended the day down -2.86% on a day all major US indexes rallied.

Bottom Line – holding a stock through earnings involves risk especially one that has run up higher before its report (gains 5+ % in the two+ weeks before it reports.) Obviously the bigger the gain the more the risk.

NB – Investors411 makes a critical difference between longer term investors and short term traders.

GLD -ETF for gold.  Investors411 has owned this and the ETF that does 2X gold prices) in the past.  Gold has broken out to a new high and will be buying it on dips. (more later)

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Hope symbol from Iran’s Green Revolution – See Iran quiz below

Financial Hypocrisy

Investors411 has thrown a lot of venom at deregulated, over leveraged, opaque, Shadow Banks. However, the reality is the Pied Piper that led the Shadows down their path is a conglomerate of US politicians.  These same politicians are the ones who have been spanking Goldman Sachs and attempting financial reform.

The head line on lefty blogs is something like Republicans Filibuster on Financial Reform Crumbles. However Popeye in the comments section of the blog recognizes the enormous conflict of interest the leading Senate Democrat Senator Dodd (Chair Financial Committee) has. What good is breaking the filibuster if the end result is going to be milquetoast?

Tuesday, Investors411 referenced Luke Wilson’s (from Seeking Alpha) grading system for financial reform Today Peter Schiff (Yahoo Finance) Slams the Senators trying to reform the system.

Iran Quiz

On June 14th 2009 Investors411 began along  series on Iran’s election results. “Democracy Hopes and The Dictator Replies.” The dictator, of course was holocaust denying Ahmadinejad &( supreme leader) Khemenei. The whole world watched in horror as the dictators slaughtered innocent demonstrators in the Green revolution. Obviously Iran is the #1 country in the world you’d least likely want to see have nuclear weapons.

In the USA many stereotype, fear monger, and over generalize – Examples – All Arabs are the same, Let’s go war against Islam, The only good Muslim is a dead Muslim.  So lets take a pop quiz.

1. Is Iran an Arab country?
2. What percentage of students entering university in Iran is female? (be within 20% of correct answer)
3. What percentage of the Iranian population attends Friday prayers? (be within 20%)
4. What percentage of Iranians in 2008 said they had an unfavorable view of the American people? (be within 20%)
5. True or False: Did Iran considered the Taliban to be an enemy after the 9/11 attacks

I’ll Publish the results later today in the comments section of the blog.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Markets recovered a small portion of the previous days losses in decreased volume = Neutral/Bearish

The Fed came through – held interest rates and issued basically the same we are going to keep interest rates low a long time statement. This plus a ever so slight improvement economically had the support of all but one Fed governor who also in the past has been somewhat more aggressive in raising rates.

The big news was still the Greek debt crisis. Massive indecision over what the future holds – See the dollar below. = Bearish

XLF - The Financial sector ETF is the indicator to watch as Senate begins to debate Financial Reform. XLF is dominated by the big shadow banks – If it goes down that means financial reform is going to force transparency and actually make a significant difference. If not the shadow banks and their lobbyists have won.

The XLF could also be impacted by the widening Greek debt crisis.

We’d need some continuing bad news on the spreading Greek debt to stop the bulls. When all is considered (Yields on 2 year  Greek bonds are 20%) the fact that major US indexes are a few points off their highs is remarkable = BULLISH

Stimulus packages across the world, emerging markets improving GDP are still driving markets higher. = BULLISH

Significant Indexes

• McClellan Oscillator rose slightly to  -24.82 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is  NEUTRAL territory, but we are closer to oversold than overbought.
• US Dollar – broke out to a new yearly high yesterday. Up +0.24% yesterday. The trading range was a huge 1.75% This indicates huge indecision. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules. Is very important.  Dollar closed at $82.33. This high is virtually entirely due to problems coming out of the Greek debt crisis. Rising dollar almost always + falling stocks.

Positions

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

Waiting for a lower reading in the McClellan to invest. Although for traders who can tolerate the risk (not longer term investors) a -25 is better than 0. A risky buying window is open. Long term  Investors should wait for more oversold conditions. .

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Sherod Brown – Senator from Ohio – A new major player in financial reform

Rules based vs. No rules Capitalism

The 2008 worldwide economic meltdown, cause even Alan Greenspan to realize that markets needed to be regulated. Let’s look at -

Three Major Entities in this drama.

• Rules based companies – They create or deliver products – P&G, Chevron, Apple, UPS, GM, and even that wonderful artist who you should buy from. Sure, all companies have some sort of problems and may fudge or break the rules, but they produce and /or deliver products. Their profits are based on the products they produce, deliver and services they maintain. They use more transparent accounting.
• Shadow based financials – They profit from leverage – A needed commodity to foster growth – AIG, BAC, Lehman Brothers, GS, & Citigroup. This is the group that got itself over leveraged because it was unregulated. Instead of being leveraged 10 to 1 (loans to cash) many in this group reached leverage near 100 to 1 using unregulated credit default swaps etc. . So when Lehman collapsed the whole  financial & economic world went with it to the brink of financial collapse. This is the group that most want no rules capitalism or “free markets.” There are, of course, smaller banks that did not get over leveraged.
• Taxpayers – You benefit and support each group by buying their products or entering into a loan. All this is a necessary part of a growing economy. The problem enters when the profits gets privatized and the risk gets socialized you and your children  pay.  Now the Shadow banks that are fighting to stay in the shadows.

Major Political Players in Congress (for sources on lots of this see past Investors411 or OpenSecrets.org

• Chris Dodd (Dem. CT) – head of powerful Senate financing committee. The Senate’s important because it has the filibuster/ 60 vote rule. Senator Dodd snuck in the rule that bailed out shadow banks could get their executives bonuses. Democrats on his committee have created (weak – my opinion – see past references to Simon Johnson and Baseline Senerio) legislation to try to fix unregulated shadow financials
• Mitch McConnell (Rep) -Minority  leader of Senate. Met secretly with 25 Wall St. Shadow bank types and #1 contributor is financial institutions.  He’s trying to unify Republicans against the Dodd reform Bill.  The Republican line is “complete and deliberate misinformation.”
• Senators Kaufman (D -DE) & Sherrod Brown (D – OH) – have a strong bill forcing the elimination/downsizing of the too big to fail banks. They have some support, including Fed governors, but not enough. Dodd holds all the strings.
• Blanche Lincoln (D Ark) – has introduced a bill to regulate what Warren Buffett called Financial Weapons of Mass Destruction – Credit Default Swaps.

Obviously the Shadow institutions and their lobbyists want to stay in the shadows. Most taxpayers want reform. You do have a group in congress who say leaving everything alone, let them fail and bring on the second great depression.  This is all getting played out this week in congress.

Fed Governors have jumped on the  elimination/downsizing too big to fail banks bandwagon, but Dodd is a consummate political pro who is in bed with shadow financials – remember, he granted them bonuses. Most Republicans want a weak reform bill and have historically voted against regulations.  Many traders are also putting their money on/investing shadow banks by buying their stocks.

For the latest see Simon Johnson’s piece last night

Here’s my home town’s Bob Kuttner on the differences between Republicans & Democrats

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Giant institutions are buying stocks on dips like the Cookie Monster eats Cookies.

Five straight rally days in a row. Markets moved higher in decreased volume. This has been a usual occurrence for stocks over the last two months. Historically, moving higher in deceased volume is indicates BEARS rule, but that’s not the trend. So we go with the trend = Bullish

You don’t need a weather forecaster to know which way the wind is blows. Even with 5 up days in a row the wind is still with the BULLS

Last Weeks Fearless Forecast – “Down Week”- Goldman Sachs, Greek debt spreading, fears of financial reform and even a volcano couldn’t hold the Cookie Monster down = Bulls Rule.

This weeks Fearless Forecast – The problem here is so many analysts see markets moving higher. Since the McClellan is not yet near oversold prediction is for an up week. Beast single reason for this call is stocks keep moving higher despite bad earnings news in giants like MSFT, AMZN and former tech darling QCOM.

Earnings reports hot and heavy this week & the Fed makes its usual announcement on Wednesday at 2:15 EST. For more see

For those interested in individual stocks here’s a list of best & worst of them who have reported earnings. Again from Seeking Alpha.

Analysis from Friday – If markets are down around noon expect the Cookie Monster to eat the cookies, vegetables and whatever is out there The Cookie Monster (huge institutions investing) stared to buy and eat stock at almost exactly noon.

Significant Indexes

• McClellan Oscillator rose  to +19.86 Friday.  [Basically, +60 or above = Overbought = sell. -60 or below = Oversold = buy]. More sophisticated investors can use the 50 & 200 day MA’s and adjust from there. StockCharts has a better version of the McClellan chart ($NYMO) LINK. - This is  still NEUTRAL territory, but moving toward oversold.
• US Dollar – fell a -0.30% yesterday after opening much higher. [Any move over +/- @0.50 is significant.] Mantra - right now The Dollar Rules Is very important. Remember, dollar down almost always = stocks up and visa versa. The positive earnings reports are overshadowing the dollar which is in the upper end of a consolidating range between @$80.00 & @$82.20. Dollar at $81.41. If it moves to either side of that range it will impact stocks.

Positions

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

The McClellan Oscillator is NEUTRAL and moving toward overbought.  There is still a long way to go before stock are overbought (@+60). So technically there is some room for the rally to continue. However a better time to buy (less risk) or make a longer term investment is when stocks are oversold. (@ -60)

ETF Trends is a good resources for longer term Investors. I have it bookmarked. Here’s a sample on Emerging Markets

Traders will be interested in Paul R’s comments on side of blog concerning individual stocks.

Why are US stocks outperforming emerging markets?

• They collapsed further than emerging markets and especially the financial sector.
• There has been no reform of  the shadow financials and financials again have become becoming the dominant sector of US markets

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Trust Buster president Teddy Roosevelt – Will Obama show us the same tonight?

Tea Party

“The tea party’s exaggerated importance” is the headline of the  major independent blog editorial blog Politico’s this AM on the “anti Obama rage group” .

Mea Culpa – I do respect the Tea Party because at Investor411 they have won. By focusing attention on their white (in the words of the old Ivory Snow commercial this group is 99 44/100% white)  rage I have taken it away time from facts on the deficit or Health Care.

The NYT’s lead editorial yesterday was on Massachusetts heath care system “which 1/2 of Scott Brown supporters and 2/3 of all Massachusetts residents like.”(paraphrase) according to a poll. 97% of MA residents are covered. For more see “Reform and Massachusetts.”

BRIC

The Economist has a  has an in depth look at the top emerging markets as a real alternative economic force to the European Union & America.  BRIC = Brazil, Russia, India, China whose leaders are or just finished meeting together in Brazil.  “The Trillion Dollar Club”

The Obama Speech

Tonight’s speech on financial reform is a defining moment. Will Obama be the next Teddy Roosevelt ? (A Republican Trust buster) The short answer is NO. Senate Democrat Ted Kaufman (Dem. DE) is our Teddy Roosevelt – Here’s part 2 of his speech on Wall Street and the Rule of Law

One piece of encouraging news is Senator Blanche Lincoln (Dem  AK) committee has a Republican onboard (Grassly- R IA) for her legislation on derivatives. Lincoln has come up with a stronger bill than other proposals.

NYTs headlines Obama Issues Sharp Call for Reforms on Wall Street If this is true you’ll see a 2 to 5% decline in shadow banks tomorrow. It Teddy Roosevelt or Ted Kaufman gave the speech you’ll see a 5 to 10%+ fall in shadow financials 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!

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

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Market went nowhere yesterday in increased above average volume. What Wall Street calls “churning.” Usually considered a reversal of trend = Bearish

Yesterday’s grand slam earnings reports by giants APPL & BAC (thank you taxpayer bailout, Fed 0% loans, & elimination of mark to market accounting) did little to move markets higher. US markets have reacted poorly to great news indicates  = Bearish

Seeking Alpha this AM has a big section on the problems  China has. Here’s one article . Investors411 has closed its entire China position (FXI).

Earnings reports continue to pour in.

Significant Indexes

• McClellan Oscillator rose slightly to -4.91 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. - This is almost right in the middle of NEUTRAL territory
• US Dollar – rose +0.19% yesterday. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules Is very important. Remember, dollar down almost always = stocks up and visa versa. The positive earnings reports are overshadowing the dollar which is in the middle of a consolidating range between @$80.00 & @$82.20. Dollar at 81.18. If it moves to either side of that range it will impact stocks.

Positions

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

Both Comments from The Critic & Paul R were incorporated in the strategy section of the blog. You can see them by linking here or at any time in the future going to the top of the blog and clicking on the word STRATEGY

Caution – I do on occasion day trade. None of this is part of Investors411. Almost all of you are looking for something to hold for a period of time.

When to Buy? – McClellan Index - Only 8 times in the last year did this index reach below -60 = oversold = a time to buy. Even then tow of those tomes were within a few days of each other. Therefore the total was only 6 times. The last time was back in early February. Its frustrating not to buy or sell, but Investors411 is going to wait till we are oversold to commit major amounts of capital.

UWM – [ETF that does 2x what small cap stocks do] UMW is back in the black and at a new high although only up a couple %. Almost closed this position. Going to sell at or near open today.

IMAX – imax hit a new high yesterday in a “pop and drop” (see yesterday’s Investors411) At one point in time it was up almost +9% and end the day at +2.94%. Volume was @ 3x normal.  Some entity perhaps more than one broke Imax out to a new high. All the day and swing traders jumped in after the break out. There was some China news,but this turned out to be not as big as its headline.  Then the dropping or profit taking came as IMAX fell up to 8%.

IMAX has had  some other pumps and dumps over the last few months. Investors411 called this pump and dump yesterday. This kind of trade is only for day/swing traders (not investors) who know what they are doing and can handle the risk. Not a recommend trade by Investors411 Yes I bought some Imax to day trade early yesterday and made a 5% profit on this.

Paul R on comments section recommends VCI,, that’s held onto its breakout from a consolidation period yesterday. Volume not strong,but it has possibilities for longer term investors

Monitor Likes SHOO – more a short term trade because it is too far extended from 50DMA (Day Moving Average – If you do not recognize what 50DMA was you should NOT be trading these stocks!)

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

-

Greece, Debt and YOU

You may or may not know Greece is having a problem with its financial debt. (NYT article) This small country, thousands of miles away is the tip of the iceberg of unsolved problems that directly relate to YOUR financial well being. Let’s put this in Bullet points

• A major reason Greece is in such trouble is because, like AIG and so many homeowner mortgages, Credit Default Swaps were placed on their debt. They still are being place on them today by shadow banks and hedge funds (Aside – hedge funds – are the equivalent of “economic hit men” and are perhaps even worse than  shadow banks – more later)  So there are a whole crew of hit men or CDS traders who will make money or are investing to see Greece fail and default on their debt.
• If Greece goes down, a lot of other European countries, who are in an almost similar situation, could follow. The list includes Ireland, Portugal, Spain, England and former Russian satellite countries. “Economic hit men” (Harvard/Oxford prof Niall Fergeson’s term for hedge funds) are the vultures circling here waiting to make money off the kill.
  
• California, Michigan Rhode Island and many US states are likewise in the same boat. Without the Stimulus package they could have gone under already.
  
• So is the USA – Except we have printed, & borrowed over S10 trillion to temporarily fix our problems.

This recovery, so far, is based on smoke and mirrors – Not transparency and rules that keep economic hit men like the traders at from AIG, or hedge funds from bringing the financial world to its knees.

Investing bottom Line - For years it was easy to recognize that globalization economically favored both emerging market growth and the privileged/wealthy class in the USA. Investors411 was very successful and careful in choosing investments outside the USA.  That potential still exists. However, an unregulated shadow financial system full of roving economic hit men exits. So, we have to move more cautiously, because the chances of economic bubbles growing and bursting is still INCREASING.

Therefore, using technical shorter term oscillators like the McClellan makes more sense right now.  It, no longer your parents buy and hold forever market.

Coming next – Economic Hit Men – Hedge Funds

Bloom Box (con’t)

About the most discouraging news, when you separate the hype is that the Bloom Box has not yet been built as an “in home power plant.” The technology may not be revolutionary, but who cares as long as it works and can be put into production sooner rather than later.

KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Technicals, Fundamentals & Analysis

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

The day started out as a disaster for US equities and recovered a lot of those losses. Even though we closed down in higher volume bulls had something to be happy about because of the recovery.  It seems like this market is looking for an excuse to rally.  It’s fundamentally hard to understand why, but some pretty bad news recently including weekly jobless data, Greece (see above) increased housing problems, & double dip inflation fears  yesterday, doesn’t seem to be able to sink stocks. Markets holding their own or have slight losses on bad news is a bullish sign.

Therefore, best read of the tea leaves is that we will hit +60 on the McClellan before we hit 0.

Significant Indexes

• McClellan Index fell to +28.62 We are somewhat oversold, but have a ways to go to +60 Oversold territory.

In answer to an email question – how did I come to determine +/- 60 as overbought or oversold? The McClellan Oscillator on the NYSE is one of dozens of indicators that show the market oversold or overbought. I like it because it is relatively simple.  Most stocks follow the trend of the entire markets. (say @ 80+%). This is especially true for, the ETF’s which are market baskets of stocks.

Click on the chart of he index above and adjust it to 2 or 3 years.  Note every time chart went over +/- 60. What I did then was also put up a chart of S&P 500 adjusted to the same time and compared the two. It’s not a perfect correlation, but if you go long (buy) when the McClellan dips to -60 or below you or sell (or go short) when it reaches +60 you would have done better. There are some weaknesses in just using the +/- 60 system that I’ll go over at a later date.

Positions

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

Will be lightening up when/if positions reach oversold 0n McClellan Oscillator.

As stated on Tuesday –

I’ve also set what’s called a stop/sell orders  on at @ 2% above what it was bought for

• recently bought (added to) EWZ
• 1/2 of MOO, a longer term position.
  
• The remainder of THY

Came very close yesterday to reaching stop/sell or selling TYH. This AM I raised stop/sell order to about 3% above what they were bought at. Will also, preferably, sell these positions if/when stocks are overbought.

IMAX – doing fine – really hope this will be a long term hold – and there will be other dips to buy into on the way up.

Other stocks on YOUR watch list – the earliest I would nibble is when the McClellan Index falls below 0 (zero)

Not adding to any major positions until markets become oversold again.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

The Holy Grail of Fuel Cells?

The Terminator, WalMart’s CEO & Colin Powell

Add the CEO of Google and you have one of the most hyped and perhaps revolutionary product launches in history was launched yesterday – The Bloom fuel cell box – Low cost clean energy whose primary ingredient is sand in now being used by some major US companies. Hard to tell the hype from reality, but if you missed 60 minutes on the Bloom energy box the 3  links above will give you some more information.  Seems like a $3,000 clean energy box in your home will produce electricity at about 1/2 the rate currently charged.  For all its faults America still has the greatest innovators on the globe.

Shooting Shadow Banks

With a clenched jaw President Obama stated about the shadow financial institutions on January 21st – “If these folks want a fight, it’s a fight I’m ready to have,” In front of the Business Round Table all that tough talk turned to jello.  Paul Volker & Elizabeth Warren seem to be left out on a limb that is being cut off. Enlightening editorial in New Republic by Peter Boone & Simon Johnson

Health Care Summit Today

Obama’s six hour health care summit is being held today. Dylan Ratigan (MSNBC Show) pointed out that insurance companies in 4 states plan to raise premiums over 20% this year.  For many the Democrats have sold out to the insurance industry and Republican’s simply want to do nothing to prevent Democrats from getting any credit.  Both parties are dominated by lobbyists. Ratigan also has a piece on the Bloom Box yesterday.

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

The Terminator, WalMart’s CEO & Colin Powell

Add the CEO of Google and you have one of the most hyped and perhaps revolutionary product launches in history was launched yesterday – The Bloom fuel cell box – Low cost clean energy whose primary ingredient is sand in now being used by some major US companies. Hard to tell the hype from reality, but if you missed 60 minutes on the Bloom energy box the 3  links above will give you some more information.  Seems like a $3,000 box in your home will produce electricity at about 1/2 the rate currently charged.  For all its faults America still has the greatest innovators on the globe.

Shooting Shadow Banks

With a clenched jaw President Obama stated about the shadow financial institutions on January 21st – “If these folks want a fight, it’s a fight I’m ready to have,” In front of the Business Round Table all that tough talk turned to jello.

Technicals, Fundamentals & Analysis

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

Markets rose and volume fell.  Up days on lighter volume has been the norm for months.  Roughly 80% of the rally days have seen a DECREASE in volume.  This is NOT good in the long term for stocks. About 80% of the previous days losses were made up.

The US shrugged off the bad consumer confidence news two days ago  and financials led stocks higher. (See above) Obama has flipped flopped on getting tougher regulations for shadow institutions so many times I’ve lost count. Bottom Line – nothing’s been done in since he took office. In fact dropping mark to market accounting has made major shadow banks less transparent. Short term this is a boon for stocks, but longer term it just means without transparency or any regulations other financial bubbles will inevitably form.

Significant Indexes

• McClellan Index rose to +36.20. We are once again approaching oversold territory.  This looks like a second leg up into an oversold position – greater than +60

Positions

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

Will be lightening up when/if positions reach oversold.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING