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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

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

A Call to Action

Simon Johnson (Former IMF chief economist and MIT Prof.)

You make the difference – The folks at the Baseline Senerio have joined with others, after the President’s speech yesterday to support legislation offered by Sherrod Brown (D – OH) & Ted Kaufman (D- DE) to take stronger action against the shadow banks. (Obama did not endorse this bill) Nobel Prize winner Krugman’s view

I’ve signed their petition and hope you do too LINK

Bottom Line – Since Financial reform bill(s) wind their way through congress a most unusual phenomena is happening – They are getting TOUGHER. Republicans are caving (not a lot but  a significant handful) The harder you push the more protections for  Main Street – YOU, your taxes, your rights, your stock investments – will have.

Consensus on Shadow Banks is starting to move. Shadow’s have even hired and paid a phony front group that has already spent $2,000,000 to pose as a group that wants to break up banks, but actually promotes the opposite. Link to Video

Obviously the outright collapse of shadow banks would be devastating economically. However, what’s needed is legislation with some teeth that protects YOU.

Debate in comments Section

See J Sovjani latest reply – This debate has gone from GM to Dumpsters to Washington Square NYC. . A significant chunk of the folks who are on the private mail list of this blog are artists or craftsmen and you can follow the entire thread by scrolling down at this link

News Junkies

SHerwehe has sen in the following site that lists front pages  of newspapers across the world. I’ve used this site for months and it is really useful because it shows not only the different biases in the USA, but across the world. The US government has a post that actually translates foreign papers, but do not have time to track this down.

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

Answer -stocks so eat.

The NASDQ had fair sized gains gains in increased, above average volume. The Russell 2000 (small cps) out performed and the other two major indexes inched higher in increased above average volume.  Markets all rallied into the close = Bullish

US equities greeted Obama’s financial reform speech with a rally of almost 100 Dow points (Down @-80 to up +9.37 at close) Obama’s certainly no Teddy Roosevelt. = Bullish

Their is a giant cookie monster of ”programed traders” [ huge institutional investing] that comes at the same time and to the same place (Wall Street) each afternoon and devours all the cookies (stocks) it can eat. Every dip is getting bought no matter the cause. =Bullish

Stocks rallied despite a significant rally in the dollar. The Greek debt situation grows and the dollar is rallying because the Euro is falling. = Bullish

AMZN & MSFT Two tech giants both were down after reporting earnings in after the markets closed yesterday – drops of -5+% in in post market trading, still down but much better in pre market trading= Bearish

Analysis – If markets are down around noon expect the Cookie Monster to eat the cookies, vegetables and whatever is out there

Significant Indexes

• McClellan Oscillator rose slightly to +5.49 yesterday.  [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 almost right in the middle of NEUTRAL territory
• US Dollar – rose a significant+0.58% 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 upper end of a consolidating range between @$80.00 & @$82.20. Dollar at 81.65. 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

UWM – Investors – Our long position, ETF, that does basically 2X the Russell 2000 will continue to hold into the weekend. Considering a smaller position in TYH (ETF that does 3X NASDQ) on a dip.

Many of you are reporting excellent results in IMAX, VCI, SHOO, SNDK MSPD & VLTR and others. Do NOT chase these stocks, unless you really know how to day/swing trade – even then most are too overextended to risk a short term buy.  Traders should think more about selling as issues get over extended. Use the basic strategy – see top of blog.

Again McClellan Oscillator is NEUTRAL and a better time to buy (less risk) is when stocks are oversold.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

The Hive – Goldman Sachs brand new billion dollar building

Goldman Sachs Fallout

From movie Casablanca – Captain Renault to Rick:” I’m shocked, shocked to find that gambling is going on in here!”

Perhaps Alan Greenspan’s Shocked disbelief in front of congress was real in 2008 – Greenspan ” I made a mistake” in believing free markets could regulate themselves without government oversight.

Investors411 readers understand that market manipulation - GREED – exists and it is unfortunately its human nature that if you cut the amount of regulators and regulations, greed can run wild.  A hypothetical and real examples.

• Cut penalties for theft, eliminate guards and surveillance cameras, leave chunks of money laying around the bank and what happens?
• Cut regulation, call for smaller government with less regulators in the Energy market = Enron
• Cut regulations, regulators of SEC and Justice Department = Bernie Madoff
• Cut  regulation in banking and you get “repro trades” driving the collapse of Lehman Brothers and Greek current debt crisis Lehman’s collapse (almost 1/2 trillion dollar loss) was the breaking point of the 2008 financial meltdown.
• Now Goldman Sach‘s has also been accused of “Fraud” leading up to the 2008 meltdown.

Best analysis – “Goldman Sachs Too Big to Obey the Law” – comes from MIT’s Simon Johnson. Also, decent article on legal ramifications in NYT for both SEC and Goldman

Bottom Line - In this case, Goldman Sachs is Goliath and the SEC is  David. GS has a dream team of legal experts that would make OJ Simpson, and the SEC look like little leaguers. GS face a danger of others piling on. We all face a danger of a run on the bank that is too big to fail.

Best Line you can tell your right wing friends who will argue that the left will over regulate everything from Credit Default Swaps to Shadow Banks -” I just want the regulation to be like they were under Ronald Reagan or was he a socialist too.”

Post Script – Bill Clinton has also admitted he was given the “wrong advise“ on derivatives (by Summers, Greenspan and Rubin) It’s time a lot of other politicians admit this error too.

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

US markets took a major hit in increased HUGE volume on the news that the SEC had launched a case against mega bank Goldman Sachs.  Quote/paraphrase this AM on CNBC from SEC – “The Agency [SEC] is not done yet.” translation – there are more prosecutions to come involving the time period before the 2008 meltdown.

The best analysis I could find on what will drive markets this week. Interesting in this analysis they put the Greek debt crisis ahead of Goldman Sachs. (I wouldn’t) It also ignores the economic impact that the Iceland volcano is having on European economy.

Fearless Forecasts Last Week - “Up week” 3 of 4 major indexes were higher, despite Goldman Sach’s news.

Fearless Forecast This Week – We should have better than expected  earnings, but ash clouds over Europe, Goldman Sachs, European/Greece crisis will probably overshadow earnings – “Down Week.”

Significant Indexes

• McClellan Oscillator fell dramatically to -29.37 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is still in NEUTRAL territory – but we are approaching oversold territory – A time to buy.
• US Dollar – rose +0.39% yesterday. [Anything over +/- @0.50 is significant.] Mantra – right now The Dollar Rules Remember, dollar down almost always = stocks up. The 50 day moving average is a major support/resistance level. Right now the dollar is just above the 50 day MA.  Think of a huge battle going on over the last 4 trading days as to wether the dollar goes up or down,

Positions

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

TYH position has been completely closed – O% gain. UWM will be probably sold for what looks to be a 7% loss today.

When the McClellan Index gets below 60 Invetors411 will again add to positions.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

R. KY Senator Mitch McConnell

Blocking Financial Reform

Republicans are considering blocking even debate on financial reform. Ewanapat thinks I’d like his comment/information/link. He’s wrong I Love it. The 3rd Fed Governor publicly has come out against the “shadow” banks that are too big to fail.

There are a few sensible Republicans (Simon Johnson and his Baseline Senerio best source on this) who are bucking Republican Minority Leader Mitch McConnell (see yesterday’s Investors411) do nothing approach.

Taxes

Mama Jama has sent in a link to a site that reales 80% of major corporations evade taxes by having offshore accounts etc. How much does this cost you? $637 in MA and small business has to pay their full share.

Tea Party Flops

Only a 1500+ showed up for the supposed “huge” final day of tea party tour on April 15th (Tax Day) in DC yesterday. A few thousand more showed up in Boston the day before but NOT the newly elected  Republican Senator or the Republican running for governor. They called the Obama administration a “gagsta government.”

Remember we many demonstrations of 10,000 20,000 and even larger protesting the Iraq war and other left of center issues all over the country and there was almost no coverage. Yet even on the financial channel CNBC they are headlining the Tea Party protest this AM.  This is

The issue of deficits is real, but the media distortion of the Tea Party is real too.  We live in a world created by media and the thousands of past protest that get over 1500 people in DC never got the kind of coverage that the Tea Party gets. This is media bias or media manipulation.

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

US markets improved a bit on Wednesday’s significant gains in above average volume = Bullish.

Google had  earnings report = an almost 4.71% fall in post market trading = Bearish

BAC (Bank of America) seems to have had blowout earnings numbers this AM up @1.5% = Bullish

Something called a Fibonacci retracement is important in worked of technical analysis. The benchmark S&P 500 is sitting just below a critical 62% retracement from its 2008 high according to analyst on CNBC. This is a strong resistance level. = Bearish

Significant Indexes

• McClellan Oscillator fell to +8.67 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. - This is still in NEUTRAL territory – technically neither overbought or oversold.
• US Dollar – rose +0.36% yesterday. [Anything over +/- @0.50 is significant.] Mantra – right now The Dollar Rules Remember, dollar down almost always = stocks up. The dollar broke though its 50 Day Moving Average support level and next significant support and yesterday rose to just below resistance (Remember the 50 day MA is called its support on the way down and resistance on the way up).

Positions

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

I realize the TYH explanation will make some of your eyes glaze over because it is too technical. The best time to buy is when the McClellan is oversold and any trades now (McClellan Oscillator is neutral) is riskier.

TYH – (10%) (3X technology) Up well over 3% since bought. File under - If its not broken don’t fix it Mistake? – In the past Investors 411 sold 1/2 when TYH rose 3% and let the rest ride. Then I put a stop/sell order at what it was bought for or 3% below what it was bought for.  Bottom line here – selling 1/2 into any minor rally.

UWM – (5%) (does 2X small cap stocks) Bought yesterday at 37.57. Stop/loss set at 7% below what it was bought for

EWZ – (10%) (Brazil) Holding on

Monday’s are usually good days and some major tech companies report next week. So expect stocks to drift higher into the close.

Caution – Holding individual stocks into earnings is obviously dangerous – Even giants like INTC (+5%) or GOOG (-5%) can make huge moves. Smaller stocks even greater.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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Teddy Roosevelt

Back in the early 1900 Republican President  Teddy Roosevelt busted up the big monopoly shadow banks when they tried to take control of government.  Big Wall Street banks have increased their control over Washington for almost 3 decades. Is Barack Obama a Teddy Roosevelt?

Can financial reform end the too big to fail problem? “Big shadow Banks have become even more powerful since the 2008 meltdown.”  Worthy editorials & videos

• Baseline Senerio’s MIT prof Simon Johnson today on Paul Volker
• Again MIT’s Simon Johnson on Steven Colbert show. As always humorous, but informative video (Interview starts at 15.00 minute mark into show and last 6+ minutes)
• Bob Kuttner former Businessweek & Boston Glob reporter who has his own mag., American Prospect on banking reform and the need for a game change like Teddy Roosevelt

If Democrats want an issue to run on in November. This is it. But perhaps/probably too many  are owned by bank lobbyists.

Bottom Line – If the financial legislation ends the too big to fail problem its good. If not it stinks.

The Public Option Did WIN

The “inclusive, single payer, cost effective, money saving ($61 billion over 10 years – CBO) robust Public Option” was won in education. This overlooked  bill was passed along with Health Care reform and cut out the banks (middle men) and opens opportunities for anyone seeking help at the college level. Jeff Cohen editorial

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 each weekend

Another day of weak volume.  US equities were basically flat. Flat prices in high volume indicates a shift in course. Flat prices in low volume indicates little.

Good news was consumer confidence rose last month. Seeking Alpha (one of the best financial sights out there) presents an interesting long term view that low consumer confidence has historically been a good time to buy stocks. Bad news was concern over sovereign debt (see below)

KING DOLLAR is the major index to watch. (see below)

Significant Indexes

• McClellan Oscillator fell slightly to -4.55 yesterday. [+60 or above = Overbought = sell. -60 or below = oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. -Same pattern continues - We right in the middle so NO clear signal. However we are still in bearish pattern of lower highs and lower lows.
• US Dollar -started back up +0.21% yesterday.

What the dollar does over the next few weeks is critical to stocks and economics around the world. The dollar has risen 10% since Dec.. This means that US & China (their money is pegged to ours) exports are 10% more expensive to the rest of the world. A higher dollar,therefore, puts real negative pressure on US/China stocks, what you pay, and an economic recovery.

This is why the sovereign debt crisis in Europe [PIIGS & former Russian satellite countries] has the potential to plunge us into round two of the recession. The dollar is rising because of the problems in Europe.

Positions

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

DWA (Dreamworks) Ended up selling all of DWA for 4% loss. Was stopped out of 1/2 and sold the rest. Selling the last 1/2 was probably a short term mistake because after three days of big volume selling it should bounce higher this AM. Loss -4% on 2% of portfolio

RGC & CNK – Opened a 1% of portfolio position (hopefully long term position) in each stock. RGC price = 17.68 & CNK = 17.98. Will add to these on dips. Caution if Easter weekend movies bomb, these two stocks will get hit. A safer entry point may  be Monday or Tuesday.

Waited for even a 2 to 3% dip in IMAX to buy a bit more, but it just not happening. IMAX is NOT having a climax buying spree (going elliptical) yet, because there is NO big volume behind the rally. IMAX now up 30 to 40%

Will try to add a 2% position in TEVA today. Hopefully at a slightly lower price.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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Health Care Debacle

There’s something in human nature that loves it when you can say I told you so.  Health Care reform attempts are crumbling and just like the greedy Wall Street Shadow bankers Anthem Blue Cross of California can’t wait to raise prices 39% on March 1.

Everyone knows that our long term debt problem is centered on a massive growth in military expansion and health care. Obviously unsustainable if you keep cutting taxes. The problem in health care is we spend far more on health care than we get in outcomes There are over two dozen industrialized democracies who pay far less and live far longer.  There may be problems in their heath care systems, but nobody’s voted to go back to a system like the USA’s.

One wonders how much of this 39% increase did Anthem use to defeat health care reform.

71% of Americans – Palin NOT Qualified to Be President

Latest WaPo/ABC News Poll shows Sarah Palin is NOT qualified to be President.

But,  according to those of you who comment on this blog – Is Barak Obama Qualified to be President? – Yes, this blog has been tough on Obama, but does his latest attempt to “begrudgingly” support  big bonuses on Wall Street in the very companies that help cause the meltdown  bring his credibility into question?

Paul Krugman – ” I’m with Simon Johnson here: how is it possible, at this late date, for Obama to be this clueless?“

Greece

The whole world waits to see what’s going to happen with Greek debt. Thee is a big meeting today in Europe. As far as stocks are concerned the sooner this is settled the better.

Greece like the USA and many European markets ran virtually “unregulated free markets”. Credit Default Swaps are still being traded on the bonds that Greece uses to finance its debt.  Someone has to pay for Greece financial system going overboard. Once again the end result will be Socialism for the rich and the working poor will feel the heat.

Dubai had the UAE to bail them out and Greece has France/Germany.  But there are lots of other countries out there who will feel the aftershocks of 2008 USA “unregulated free market” meltdown. Once again socialism for the rich and capitalism for the poor who pay and pay and then have their children pay and pay.

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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!

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.

Basically a nothing day.   The whole world waits to see what’s going to happen with Greek debt. Thee is a big meeting today in Europe. As far as stocks are concerned the sooner this is settled the better. We have a concept, not a specifc plan.  When a plan comes expect a short tem rally.

Greek bailout – Short term good news, but long term bad news. The more the Euro countries have to bail out the lower the Euro goes. Therefore relatively the dollar goes up. This costlier dollar makes our goods cost more in Europe and hurts US exports.

Oversold market’s natural direction is up.

Significant indexes – Forecasting tools for market direction

• McClellan Index fell to -32.47 =Moving away from Oversold. We’ve passed -60 or oversold levels twice recently. When the  McClellan Oscillator gets past those levels its a signal to buy.  The more we are over -60 the better at least a short term buy will come out successful. -32.47 is a better entry point than +32,44, but not as good as -60 or higher and beyond.

Positions

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

Thinking about nibbling on ETF’s & stocks (see yesterday) as long as McClellan stays in the red.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Paul Volker

Shadow Banks – Shake & Break?

The WSJ is reporting that former Fed chair Paul Volker (like Elizabeth Warren one of the good guys/gals in the Obama administration) has finally got Obama’s attention. Perhaps it was the loss of the Senate seat in MA that helped. “Obama on Thursday is expected to propose new limits on the size and risk taken by the country’s biggest banks.”

This should have happened almost a year ago, and we will have to wait to see if this is just political spin or if Obama is serious. Economist Simon Johnson asks all the right questions

How to know if something serious is going to happen – shadow banks stocks will fall.

Author Simon Johnson is the former Chief Economist of the International Monetary Fund, an MIT Professor and author of a must read - The Quiet Coup (referenced in earlier Investors411) This article is about history repeating itself. Financial oligarchies have crushed many developing countries and arguable the IMF helped break those oligarchy. He believes “recovery will fail unless we break the financial oligarchy that is blocking essential reform. “

Remember Iraq

A withdrawal was another one of Obama’s “change we can believe in promises.” Virtually nothing’s happened. A poll in the distinguished Foreign Policy magazine states that Arab publics say that ending the US military presence in Iraq is the single most important thing the US could do to improve its relations with that region.

“What they [Arabs] saw as US atrocities in Iraq motivated many of the terrorists active after 2003″

Bottom Line – You want to reduce the number of people threatening terrorist attacks on the USA – Keep your promise, stop nation building and get out of IRAQ. What ever happened to elections that were supposed to happen there?

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.

Stocks staged a major fall (below 1%) in increased, above average volume. Volume, our #1 confirmation factor did again confirm the move lower. 3 of the last six trading days have seen significant falls in increased above average volume. While the numbers on the downside could have been larger, this is cause for concern.  It shows institutional investors leaving or selling stocks and stocks go no where without the big boys and girls.

Markets did recover about 30%+ of the losses at the end of the day.

• McClellan Index at -17.72 = A little bit oversold.  There’s a long way to go till we reach @-60 or oversold or @ +60 or overbought. Notice a clear trend of lower highs and lower lows on chart. = Bearish pattern

IBM & INTC have both had better than expected earnings results and are down (not much – a few %) This is not a good sign for stocks, especially in technology.  It looks like you’ll need a grand slam earnings report to move higher

US Stocks have been flip flopping between up and down days, but volume has been with the bears.

China , who has led the world out of the recession looks to be in a pull back or correction. Down about 10+% . China could correct some more. Odds are US will follow China and some sort of correction is starting in USA. Not logical to see the country leading the world out of recession in a pull back and the US not follow.

Positions

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

These are positions I actually own

SELLING & BUYING

ETF Watch List

Ideally, you’d like to McClellan index below zero (the further the better) and these all would be better buys. The closer to -60 the more you think about buying and the closer to +60 the more you think about selling.

Strategy – going to hold tight till conditions reach overbought or oversold.

Charts set to 2 years – click on ticker symbols.

• EWZ – Brazil (16% of portfolio) – Reaching a critical inflection point. This chart is either near a low point in forming a base or after an outstanding run of over 100% about to take a hit. Perhaps, like China its time to lighten up.
• MOO – Agriculture (10% of portfolio) – Latest buy had a strong upside run, pulled back a bit and is moving sideways.
• FXI – China (Reduced to 6% of portfolio) – Over the last month or two we’ve been taking profits on FXI. (Down from 24% of portfolio to 6% ) Lots of volume when stock moves down and now FXI has established three lower highs and lower lows over the last three months.
• see Positions section of blog for some considered ETF alternatives

Again – Waiting for McClellan Oscillator to reach oversold or overbought positions before making a major move.

Investors411 opened a small positions in ENOC (2% of portfolio) Bought at 35.95. Of all the stocks on our watch list this one was holding its own on a big down day.  More Later.

See POSITIONS (scroll down) for details on this and what’s under consideration for 2010.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Afghanistan Bubble Building

Islamic Republic of Afghanistan جمهوری اسلامی افغانستان (Persian: Jomhūrī-ye Eslāmī-ye Afġānistān) د افغانستان اسلامي جمهوریت (Pashto: Da Afġānistān Islāmī Jomhoriyat)

So after adding 21,000 to the original 38,000 troops in Afghanistan the generals are calling for another 45,000 troops for Obama’s “necessary war.” This would be a unilateral increase of American troops. This unilateral increase would put over 100,000 troops in nation building Afghanistan for the next 5 to 10 years. Basically we will end up unilaterally increasing troops by almost 200%. How is any of this different than the unilateral Cheney/Bush military approach.

Have we learned nothing from the trillion(s) spent in Iraq. – A corrupt government, dominated by Shia’s who love Amadinejad & still have huge economic problems. Imagine Israel bombing a suspected Iranian nuclear plant. It not only would turn Iranian religious fanatics into terrorist bombers, but the Shia’s in Iraq would join them.

What happens next probably Pakistan, Yemen, the Sudan ? Frank Rich has a column on this “Obama on the Precipice” in the NYT LINK

China blowing by the USA

Tom Friedman had another column this weekend entitled “The New Sputnik” on China blowing by the USA in the creating of alternative energy. LINK

This is just another reason why the #1 investment choice of Investors411 continues to be FXI -The China ETF.

Blowing and Building Economic Bubbles

Both the WSJ and the major financial channel are cheerleading unregulated capitalism this AM. Why not, the Lehman Brothers collapse is a year behind us and taxpayers have bailout Wall Street. Happy days are here again and nothing substantive has been done to regulate or reform what got us into trouble in the first place. Economist Simon Johnson on “Was the G 20 Summit actually Dangerous” traces the lack of capital requirements for US financial institutions. LINK

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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

Volume declined and was below average. Technically, it looks like the bears are running out of momentum. In the very short term we are a bit oversold – so look for an early rally.

Big news for week is the jobs number fro the month of Sept. coming out Friday.

BDI seems to be turning higher = Bullish

Fearless Forecast – Took it on the chin last week as major US indexes fell. However September is turning out to be a pretty good month. The dollar is the over ridding factor in market direction. It would be good in the long run  if US markets stopped moving higher without some sort of more major retreat (5 to 10%) Constantly going higher feels too much like a bubble building.  Fearless forecast for the week is for the dollar to fall and markets to rise.

This rally is built on the falling dollar, means US goods (exports) will cost less abroad. Therefore for major US companies that sell overseas profits will grow.

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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) .

2388 is support now resistance level/number to watch – Yesterday BDI +20 t o close at 2183. Short term Bullish for stocks

The BDI is @49% 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 ) A 50% retracement from highs is a major support level. Therefore some stabilization is understandable.

What this means – World trade is in trouble – lots of ships are sitting in ports empty.  To some degree, China has stopped buying raw materials and/or the US consumer is not buying as rapidly as earlier in the year. Braking a support level is significant, but 2183 (current level) is still a long way from the Dec. 2008 663 low. = Storm clouds gathering

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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

The dollar fell -0.17% yesterday and closed at $76.78. After a major two day rally that created a higher price high (bullish) the dollar cooled off a bit.

Last year’s low was around $71, so there is a long way to go before the next major support level.

Positions

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

revised to reflect recent trades this weekend

Plan to add to EWZ (Brazil)

Also MVIS (a stock) NOT an ETF is technically looking like its small three day retreat makes it a possible buy.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!