Afghanistan

Huffington Post has a huge Afghanistan section. No other news outlet even comes close. LINK

Steve Clemons has one of the best websites on issues facing America. He is both realistic and a relative moderate. He features a big Af/Pak Debate by some foreign policy experts LINK Title of debate “AMERICA CANNOT AND WILL NOT SUCCEED IN AFGHANISTAN/PAKISTAN.”

Today’s WashingtonNote.com , Clemons blog focus is Iran – “Imposing More Sanctions On Iran Will Not Work” Both these articles give some in depth analysis.

Bottom Line – Afghanistan, Pakistan and other countries – I don’t want these countries to become havens to those who will attack America, but in no way do I want to continue  spend $100s of billions to nation build democracies around the worlds.  Our results in Iraq are a Shia government that is corrupt, best buddies with Ahmadinejad, and still a nation deep in poverty despite having huge oil reserves. Furthermore, while we focused on Iraq, Afghanistan/Pakistan deteriorated.

Just like in the colonial empires of the 20th century (from England to Russia) you’ll find that nation building has brought former dominate powers down. This is just history repeating itself. In the middle a recession for Main Street these funds should go to help Americans not nation building abroad.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	+1.37%	up
NASDQ	+1.71%	up
S&P500	+1.37%	up
Russell2000	+1.84%	-

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

The Dollar is currently the #1 factor influencing stocks.  Yesterday’s significant move down created a major rally for stocks.  Earnings season which officially opens today (Alcoa reports) will be a fundamental driver of stocks, but the dollar will still be very important.  What investors are looking for is top line sales growth. Last quarter Inel Computer had some top line growth and that sparked a rally. INTC is obviously again a key factor.

Volume moved up, but only the NASDQ was above average. You might call this partial confirmation of the move higher.

Australia raised interest rates and this show signs of an improving worldwide economy. LINK The US is not going to raise rate for a while until the jobless situation turns.

Mortgage applications are at a 4 month high as rate falls is the headline on the major financial news channel LINK – Bullish news

Markets are overbought, and you should notice that huge amounts of $ are NOT entering the market

There are some strong technical resistance areas around the old S&P high of @ 1070, 1120 and 1200. (more later on this) These are areas I’d take some money off the table. Especially 1120 & 1200.  S&P or SPX is at 1055.

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Significant forecasting tools/Indexes for stock markets

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

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

The BDI is @ 46% off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI rose a significant +79 points yesterday and closed the day at 2441 .   Longer term (since the June high) the rate of decline has softened, but its still going in the wrong direction. We seem to have started to reversed the longer term June move. We’ve had a rally 8 of the last 9 days from a low of 2166 .  Resistance level of 2491 (last months high) first major hurdle to cross – Bullish for stocks .

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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 -0.51% yesterday. Three down days in has brought the Dollar to $76.31 less than 0.50 of its yearly closing low of $76.00 (major support level)

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

See yesterday’s update for a full outline of current positions. Sold XLF for +7% gain. Over the course of this year Investors411 has sold XLF (financials) for 23% gain (10% of portfolio) and twice for 7% gains (both 5% of portfolio)

Both GLD and EWZ are trading at new highs. Like US markets right now these stocks (GLD might be termed a commodity – gold) are over bought. Looking for a buy the dip opportunity .

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Jesus was A Liberal

The Dalai Lama & Scotty

Christianity in America is often portrayed as conservative  -  flamboyant right wing evangelists, the conservative aura of the Catholic church, and, the often loud and sometimes violent abortion issue. Well, there are 10′s of millions of Americans who spiritually believe in something far less dogmatic. One such leader of these Americans is the Rev . Scotty McLennan

Back in the 60′s during the civil rights movement and later Vietnam we were all influenced by a great Christian leader from Yale - Rev. Sloane Coffin . (for those of you too young to  remember you can read about him here ) Scotty, was one of those who not only took this activist preacher’s message  to heart, he followed in his footsteps.  Scotty became University Chaplain at Tuffs and is now Dean of Religious Life at Stanford.

His latest book entitled Jesus Was a Liberal : Reclaiming Chistianity for All has just been published. - here You can follow Scotty at his own blog here

For my kids who know Scotty & Ellen well – your copy of  Jesus was a Liberal is in the mail. For those of you who think Scotty’s picture vaguely familiar – The Character of Reverend Scot in the comic strip "Doonsbury" is fashioned after him.

Iran Day 12



• Same recommended sources in past updates continue to provide excellent information. Demonstrations are diminishing and military presence growing. Protestors have switched to strikes and Thursday as a National day of mourning. Foreign media continue to be arrested. Neda has become the symbol of the movement – from major issue in Obama’s press conference (opening remarks here ) to Iranian government saying video was fabricated.
  
• Popeye in the comment section brings up the behind the scenes story of the power struggle in Iran over whose going to replace the "Supreme Leader." Steve Clemons blog has another yet similar point of view on the power struggle behind the scenes here and his daily blog offers more analysis here

Obama Debate Rages on

The are you happy with Obama ? debate continues to rage in the comments section. See posts by Abby and Popeye

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index	Percentage %	Volume
Dow	-0.19%	down
NASDQ	-0.07 %	down
S&P500	+0.23%	down
Russell2000	-0.62 %	-

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Technicals & Fundamentals

The volume was again below average. It hard to be sure about making a forecast when our #1 forecasting tool - volume – gives no indication of which way prices will flow. But there has been some ominous changes in the secondary forecasting indictors See below.

The World Bank’s downward revision of expected GDP for the planet is having an effect. (see yesterday’s update)  I can’t remember stocks falling so much directly in front of a Fed meeting. Usually everybody waits till the Fed announcement after 2:15 EST today to make their move.  Sure looks like bears are gathering to mount a charge

Significant forecasting tools/Indexes for stock markets

Note - Repeated statements in brown

Right now, there are two indexes that are significantly influencing stocks in the USA & world. The US dollar in the short term and the BDI in the longer term

$USD – The Dollar fell-1.16% yesterday. Any move over 0.50 is significant. The strong inverse correlation between the dollar and stocks has existed for many moons. The dollar falling a very significant-1.16% and stocks ending up only flat (the Dow should have rose at least 100 points) is a very bearish sign.

BDI - The Baltic Dry Index measures the flow of goods (world trade). 24 up days in a row, 6 down day in a row,  a 6 day rally and now the BDI fell Friday and the rate of decline increased Monday and significantly increased Tuesday. Another very bearish sign

If trade is diminishing through out the world then a worldwide recovery is in big trouble.

Reading the Tea Leaves

This market has moved too high to fast and is a technical rebound. As stated two weeks ago we may see a 5 to 10% technical fall or consolidation. This week fearless forecast – Another down to flat week. Look for the areas around 875 and 850 on the benchmark S&P 500 as support levels.  So far because of the lack of heavy volume this looks like an over bought correction and not a total meltdown that tests the old lows.

Our key secondary ($USD & BDI) indicators seem to indicate momentum will pickup on the downside.

This is about as close as I can get to bringing out the old Lost in Space robot who screamed Danger Will Robinson,Danger Danger.

The only missing piece is  H igh Volume confirming a downside move. Therefore, NO warning, but keep an eye on markets.

Yesterday Investors411 recommended buying some downside protection on any minor rally. A 5%+ position in -SDS – An ETF that is ultra short’s the S&P 500

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING