Tom Friedman

Energy Innovation/Solutions

“Welcome to Tea Party America. Think small and carry a big ego.”

Tom Friedman in his latest NYT editorial is endorsing an Obama idea of “a plan to set up eight innovation hubs to solve the eight biggest energy problems in the world.” Obama is asking  for $25 million (“NOT billion) to set up each “Energy Innovation Hubs.”

Nobel Prize winning Energy Secretary Steven Chu - “get Nobel Prize winners in physics working side by side with engineers” — not to produce an academic paper but “to solve a problem in a way that will actually be deployed” and do it much faster than the traditional academic model of everyone working in their own silo.

But in Tea Party America you scream, intimidate, cut taxes for the wealthy, promote wars and believe that this snake oil will somehow eliminate future deficits. So “Energy Innovation Hubs” are out of the question.

There’s NO “5 year funding for the 8 Innovation hubs.” totaling $1 billion. Ironically tiny Singapore invested a billion alone in biomedical research. (One reason why EWS is such a good investment)  All the funding our  ”Tea Party” bullied congress could mannage is $22 million for 3 hubs for 1 year.

In Tea Party America science tied to innovating business technology comes in behind screaming, promoting creationism, showing anger, tax cuts for the rich, fear mongering and intimidation. (see – I do read all your comments on the blog)

Solutions & Google

• Kudos to Google for investing 37.5% of the initial costs in a S5 billion in a wind farm off the Jersey coast.
• The world’s largest wind farm opened off the English coast last month and on Tuesday Denmark opened another giant wind farm. Denmark gets 20% of its power from wind.
• Cape Cod billion dollar off shore wind project a big step closer.
• “Wind could drive 20% of world’s power needs by 2030 with China in the lead.”

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KISS & Stocks (Keep It Simple Stupid)

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

US Stock Markets -

Let’s see what happens today with tech giant INTC that reported earnings last night. Stock futures are climbing on INTC & CSX earnings

Yesterday was all about the QE 2. (see yesterday’s investors411) In the AM a Fed governor said maybe not so much quantitative easing money – stocks dropped. But later the publishing of Fed minutes of their meeting said full steam ahead.  So stocks rallied

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar fell -o.10% yesterday.  Overall trend of falling dollar trend for US stocks is = Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Rose slightly +0.89% yesterday An 8 week bull run, then a two week fall. A very slight stutter and now moving up. Trend  = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Fell slightly to +17.71. Still lots of room to move higher or lower. Location= NEUTRAL

Reading Tea Leaves.

There are many indicators that technicians use to measure if a market is overbought. A good number of these say stocks are reaching those levels.

One specifically that concerns me a bit is how far many of the leading emerging markets are above their 50 day moving averages. TUR (Turkey) & EZA(South Africa) are overextended and others that have been started to dip or flatten – EWA (Australia) EIOD (Indonesia) EWY (S. Korea) EWS (Singapore) For a full list see POSITIONS section of blog.  (Check POSITION section for more accurate data.

These secondary emerging markets are leading the world out of recession or at least trying to.

Over extended is over extended. But, a pullback is also a buy the dip opportunity is possibility. It’s not ideal buy because you’d like a lower MO & even though you’ve had a dip – you’d really like a bigger one.

Overall – the same bullish pattern dominates.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

(I do manage 6 accounts that have other positions)

• EWS (Singapore)
• USO (price of oil/commodity).
• SSO (2x what S&P does)
• TYH (3x tech stocks) Bought on the dip at 34.22. (A trade not a long term investment and therefore will sell 1/2 at 5% profit.)

Investors – Both USO & EWS are in consolidation patterns after a big move higher. Like ETF’s listed above, for those that can tolerate risk, possibly a change to nibble on a dip.

Check out Paul R’s always enlightening updates on individual stocks and sectors in the comments sections.

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

This is the Moment

Huffington Post photo

You can make a difference. I joined to make a difference in the health care reform not for me (I’ll soon be on Medicare) but for my/your kids, grandchildren and the future of America. Hope you will too. LINK HERE

Just in case here are some more facts on health care in America.

• The illusion that we have the “best health care system in the world” – link here
• Among the developed countries we have the 10th highest death rate of cancer patients. link here
• Staggering health cost prevent 38% from getting access to heath care access vs. 11% for Canada and 6% for the UK link here
• I know he’s theatrical, but his facts check out. Here’s Michael Moore’s SICKO blog link here

The public health care component proposed does not go far enough to really make me happy. But, its a start.

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

Big news is JOBLESS FIGURES for July that come out on Friday. Anything over -400,000 will be bad for stocks. The “cash for clunkers ” program will improve auto sales for the next month or two. Senate just approved more funding. Unfortunately after the Ford Focus the next 4 top selling cars in the program are foreign. Link here

Tech giant  Cisco CSCO (see chart) marks the end of major earnings reports for the quarter. There were some positive comments about the economy from the CEO here

Significant forecasting tools/Indexes for stock markets

BDI - The Baltic Dry Index measures the flow of goods (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . 2975 is the major support level and the BDI closed at 3051 down last five days in a row. As long as we hang in above 2975 stocks should do well.  This chart (click on BDI at beginning of paragraph) moves rather smoothly,

In a nut shell the BDI is

• short term – Bearish trend starting
  
• mid term -  Bearish pattern
• long term - Bullish pattern

Warning – The BDI falling through its support level at 2975 would be very bearish. BDI fell 109 points yesterday. The rate of decline is growing. At this rate we will reach critical support today.

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$USD - We broke that major support on Friday and dollar took another big hit Monday Tuesday the dollar inched forward +0.19% Yesterday the dollar gave back those gains -0.23% Here’s a multi year chart of the US dollar that show the line in the sand support level or its all time low below $71.00 in April to June of 2008

What this means for stocks – The dollar has a long way to fall before it hits major support. Y esterday’s close - $77.56 Therefore, stocks (and oil prices that are tied to the dollar) have a long way to rise before this support level is reached .

Falling dollar is Bullish for most US stocks

Positions

The whole Positions Section has been revised (Click on “Positions” at top of blog). Check it out

The problem here is investors are buying the smallest of dips. We’ll keep adding until the dollar and the BDI fall to their major support levels. The Dollar dropping is key to this rally and it has a long way to go before reaching major support levels. The BDI is close to breaking support and this will impact all exporting economies.

• Sold all EWS (Singapore ETF) at 10.25 . This was bought at 9.4 (see positions section of the blog) The net gain on this trade that was @6% of portfolio was @+8%
• Sold all of EWY (South Korea) at 41.75. This was bought at 39.9. The net gain on this trade which was @5% of portfolio was @ +5%
  

If job numbers are bad, but not a disaster, ill buy QLD Friday when stocks fall. Also considering add more EWZ (Brazil) on dips ASAP. This again depends on the jobless numbers.

Perhaps I’m wrong, but the downside risk (markets are also way over bought) outweighs the upside gain right now. Also the BDI sure looks like its going to break support levels and make a lower low. That’s bad for world trade especially Singapore and S. Korea that depend on it.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!