Paul Krugman

Sorry analysis of  YOUR Stock Watch List took a lot of time this AM  – so little on economics/politics

Health Care

The Baseline Scenario (MIT economists) agrees with NYT Nobel Prize winner Paul Krugman on Health Care – No Bill is better than a weak one.

Krugman – “In summary, then, it’s time to draw a line in the sand. No reform, coupled with a campaign to name and shame the people responsible, is better than a cosmetic reform that just covers up failure to act.”

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. (No changes this weekend)

Rally Ho, but in the usual weak volume. The NASDQ did manage to increase its volume but not in any big way. Fundamentally news was not especially good yesterday so there is a bullish sentiment underlying the markets.

We are quickly approaching oversold territory and the higher we get above +60 the more I’d take profits.

Jobs numbers for February come out on Friday

British pound is falling apart.

Why stocks are moving higher - Attempts at serious financial regulations appear to be disintegrating. No health care reform that would lessen cost for Americans and cut profits for insurance companies. Lobbyists dominate both parties in Washington. Dysfunctional federal government means no regulations on stocks. Emerging markets are still growing despite a Chinese housing bubble building.  Obviously low volume indicates that No new investors are coming back into the markets. Many bubble’s building, the question is when they bursts.

Significant Indexes

• McClellan Index rose to +53.10 up a whopping  +21.37 points yesterday We are just below +60 Oversold territory. Time to seriously consider selling into any rallies. Especially one like we had yesterday.

Positions

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

YOUR Watch List of Stocks

Many Thanks!!! to several of you who keep sending in additional lists of prospective stocks. Cannot possible include all of them. The 4 new stocks were chosen because they were on more than one list.  If you have one or a group of stocks – I’d be happy to consider them.

Since the McClellan Oscillator is close to +60, or overbought – buying right now is far more dangerous than when markets are oversold – Its hard for almost all stocks to go against the tide.  The McClellan and other similar Indexes dipped down last week into mildly overbought territory (@ +25) and this gave many of the stocks on our watch list some room to run higher.  But, since the McC. is near +60 we are running out of rally room.

NB -Last Week’s Comments. black. This week violet

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

• CAAS – Lots of volume behind rally days and had big breakout – hold if you own or buy the dip. Big +10.90% move higher yesterday – volume confirming rally – A buy the dip stock
  
• PCLN – Now wait for dip. Breakout 5.22% move yesterday in good volume – A buy the dip stock
  
• F – Flatlining or Forming a base. Breakout 5.71% yesterday in good volume – A buy the dip stock
  
• IMAX - hold if you’re a long term investor Has moved up, but volume weak – Sell  into rally if you are short term trader – wait for pullback to buy.
• GS, Up a bit but volume dropping Not Interested Still weak
• CSCO, Techs new leader Not Interested Like AAPL moving higher – Slower steadier more for longer term investor
  
• SHOO, Great long term chart. Needs breakout – Tempting A 4.02% breakout in good volume yesterday – A buy the dip stock
• ICON, Slow steady move higher with breakout yesterday – A buy the dip Dipped back down and has formed a series of higher lows & higher highs – A buy the dip stock
• VPRT Moved up to breakout level and pulled back yesterday – A buy the dip Up +2.49% yesterday in what could be a breakout – A buy the dip stock
  
• DGIT Thinly traded but had breakout in big volume and is now dipping – A buy the dip Classic breakout and pullback - up @ 5% in last 2 days - wait for next dip
• CTCT Broke out and is in pullback - A little weaker than other choices, but buy the dip Nothing flashy, but building on higher highs and higher lows – Buy the dip
• VCI Major breakout, then rallied more and yesterday big drop – Too volatile for me – Dipped and has made up most of that loss, but in weak volume Tempting, but risky.

YOUR New choices (These were on several different lists) Thanks again for sending in your choices

• CREE – Owned this chip company in the past and on a great long term run. Too overextended to buy now - A buy the Dip stock
• SNDK – A tech flash storage company that had a 11.94% breakout yesterday. Overextended now but Buy the Dip stock
  
• VSH – Most sent in stock. On another breakout,but in weak volume and overextended -  Too risky
• HMIN – Up 4.02% yesterday in breakout, but weak volume. Too Risky

What most of you have chosen are technically high relative strength stocks – stocks that are HOT. Lots of these are Great choices. It looks like we should have another day or two before the overbought markets run out of steam. Sell at their highs and jump back in on the dips.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Obama’s Brain Freeze

Obama is seeking to Freeze many Domestic programs headlines the NYT today. Also check out Bob S’s & Mama Jama’s recent comment on right side of blog.  We have the answer as to what Obama would cut - domestic programs.

Here we are with a 10% jobless rate and well over 16% jobless rate if you count those no longer on the rolls. US Corporations from IBM to Apple  are growing because they are growing their investments (now well over 50%) overseas. Housing numbers still hurting, banking mess not fixed and the vast majority of US workers and unemployed believe we are in a recession and Obama freezes domestic spending.

It’s a huge flip flop – Stimulate the economy to create jobs – now a year later he cut domestic spending and guess what’s going to happen to jobs & the economy.  Job loss has decreased from -700,000 to about -50,000 per month. Not bad . However, we are still NOT anywhere close to creating the kinds or number of jobs (+250,000 a month) it takes to stimulate a jobs recovery. Take $300 billion of the stimulus away in domestic cuts and hopes of a recovery will evaporate.

When the jobs picture flattens or worsens and Obama asks for more $ to stimulate it you will have a flip flop flip

So maybe this will buy Obama a few points of popularity this week, but it is just what Herbert Hoover did and FDR did. They took away the stimulus too soon and in both cases the depression got a whole lot worse. Bob S first mentioned the FireDogLake site but it has an excellent compilation of criticism on Obama’s move

We the Corporation

Common Cause and Talking Point Memo are both reporting that the recent Supreme Court decision (see past few investors411) opens the way for Foreign Investors/governments who own chunks of US corporations or whose companies are registered in the USA to contribute to US campaigns.

Example  A Saudi Prince or wealthy Chinese investor (really their government) who owns say @ 5% of a US shadow bank will have a lot more power to intimidate or influence any candidate than.  Foreign investors have over the last decade bought huge hunks of American companies and are very influential in corporate board rooms. You the far less wealthy  taxpayer and voter will soon have even less power in YOUR democracy than rich Communists or Arab dictators

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 rallied a bit in decreased volume. Volume,our #1 confirmation factor of price move, is still very Bearish. We’ve had at least 3 significant falls in BIG increased volume. This is enough distribution (major players moving to sidelines) to turn a market.

AAPL reported after markets close d. This is one of the stocks whose results can move markets. Last evening there was no change in price after its report. Lots of news surrounding a new Apple product Wednesday

Fed meets over next two days – expect little/NO change.

Bernanke reconfirmation vote – Looks like he will get reconfirmed and that should help stocks. But two problems –

1. he/the Fed will be weakened because the Fed chair usually almost unanimous
2. The Fed is like everything else from the Supreme Court on down an almost totally political organization. Any appearance of his independence was shattered by him lobbying senators for his appointment.

State of the Union – Markets are worried about what Obama will do about shadow banks. See Sunday’s and Monday’s Investors411 for more on this. We need to fix the too big to fail systemic problem – this will hurt stocks, especially financials in the short term – but stocks, our democracy and our country will be better off in the long term .

Significant indexes

• McClellan Index at -64.84 =  still significantly oversold.  (see Sunday’s Investors411 for more)

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

Did not pull trigger on any longer term ETF investments. Waiting for state of the Union address to see what Obama does about Shadow banks.

YOUR Stock watch list

NB – I feel much more confident with ETF’s because they reflect global trends than individual stock. Too many things can go wrong with individual stocks.

• SEED – In a buy the dip position directly above 50 day moving average
  
• AAPL – obviously a market mover who again is sitting on its 50 day.
  
• AMZN – Lower highs lower lows on chart – removed from list
• HMIN - Failed breakout . China play. Will recover when  China does.  Will drop from list soon
  
• CAAS – CAAS hanging in there 50 day moving average.
  
• PCLN – Fell below 50 day moving average, but no big volume on downside move. A potential buy in any market reversal.
  
• F – Now less over extended.
• DRWI – New – Big exporter to China -  Was too overextended to buy, and now only a bit overextended. No big volume as stock dropped= good sign. Potential buy the dip.
  
• ENOC – New – Reduces costs for utilities – No big volume behind its recent fall. Potential but the dip when it hits 50 day.
• ATHN – New - Software reduces costs for health care - Broke its longer term bullish trend in big  volume – Will drop from list soon.
  
• IMAX – Great long term chart – falling back to its 50 day moving average. Still a buy the dip opportunity

All these are better buys in an oversold market. That condition exists NOW.

The problem is not knowing how aggressive Obama is going to be about shadow banks/too big to fail institutions.  We should have a good idea by state of the Union – Wednesday night.  You could gamble either way.

Caution – I have continually overestimated Obama when it comes to almost everything. He may be all talk about business accountability and the Paul Volker/Elizabeth Warren faction within his government will loose.

See POSITIONS (scroll down) for details on this and what’s under consideration for 2010. Sorry have not had a chance to work on this last weekend.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

A Frog in Hot Water

The old adage goes – Throw a frog in hot water and he’ll jump right out, but you can slowly bring the water to a boil and that frog will stay put.

A little known Republican State Senator, Scott Brown , won a stunning upset victory in the MA Senate race last night. Like Mitt Romney in 2002, he beat  Dem. Shannon O’Brien, Brown toasted another woman who ran a weak campaign – Martha Coakly.  For perhaps the best analysis of what this means see Nate Silver’s – Let’s Play The Blame Game

Health Care – Obviously in deep trouble. The only way Health Care would pass is if the House passes the Senate Bill. Since Democrats in the House have already voted for a far more progressive health care plan and will get hit for that in the next election Obama is going to argue why not vote for the Senate version.

Bottom Line – Health care. – You blew it – RIP

That Frog in this case is the typical American worker who is in the pot of ever increasing temperature .

• Globalization is slowly eliminating working class jobs across America
• Weapons budgets are growing at the rate of 10 to 20% each year
• For the first time in our history we cut taxes and went to war.
• Our federal and trade deficit exploded from 2000 to 2008.
• The era of cheap oil is OVER. The supply has peaked and the demand from billions of people in emerging markets is growing.
• Because of our suburban sprawl and relative lack of public transportation we are far more vulnerable to high oil prices.
• Time tested solutions like stimulating the economy to fix it will not work as well because of our already huge deficit.
• There fewer and fewer laws to govern excess GREED on Wall St. Main Street has socialized the risk for Wall Street
• The rich in the USA are getting richer and what’s left of the American working class (those not newly unemployed) are paying the bill
• As the situation worsens, self preservation kicks in, and Americans care less and less about others.

The American frog is in a pot that’s getting hotter and hotter.

There is an upside to all of this outside the USA. Hundreds of millions (perhaps billions) in emerging markets are increasing their standard of living. They have or are learning to Manage their capitalism and hopefully not repeat mistakes that were made here.  Greed is a powerful factor and one hopes eventually more democracy will grow abroad.  If Time magazine called the last decade The Decade from Hell for the USA – it could get a whole lot worse for the American frog in this decade.

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 rally (above 1%) in decreased, average volume. Volume, our #1 confirmation factor did NOT confirm the move higher. Even though we achieved some new highs (for a calander year) on 3 of the major indexes we are doing it in reduced volume.

• McClellan Index at +i3.14 = A little bit overbought.  There’s a long way to go till we reach @-60 or oversold or @ +60 or overbought

IBM reported after the bell and beat top and bottom line expectations. This was not a grand slam, but IBM did solidly better, but lost money in after hours trading.   The important news from IBM which does 60% of its business abroad was that their areas of growth were "Brazil, China, & India."

Even though stocks rallied yesterday still believe in down week.

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

YOUR Watch List of Stocks . Unfortunately, I’m not daily checking these stocks out. Ideally, you’d like to McClellan index below zero (the further the better) and these all would be better buys. We developed most of these potential stocks about two weeks ago. Check old Investors411 for more.

Again the problem with buying now is that markets are slightly overbought and you would like stocks oversold position. Click on ticker symbol for chart. Going to limit Watch List to @ 10 stocks.  80% of investments wil be ETF’s 20% stocks.

NB – I feel much more confident with ETF’s because they reflect global trends than individual stock. Too many things can go wrong with individual stocks.

• SEED – In a buy the dip position.
  
• AAPL – big +4.42% rally yesterday. Sitting on breakout point. AAPL moves markets – if this goes higher so does the market.
  
• AMZN – We sold at highs and AMZN has formed lower highs and lows. In bearish mid term pattern. Will drop from list soon
• HMIN - Failed breakout, back at lower end of trading pattern. Will drop from list soon
  
• CAAS – Buy the dip opportunity as CAAS falls to just above 50 day moving average.
  
• PCLN – Buy the dip opportunity
  
• F – Still too over extended to buy
• DRWI – New – Big exporter to China -  Looks great but still too overextended to buy
  
• ENOC – New – Reduces costs for utilities – Great long term chart. formed base for last 5 months moving higher – A buy
• ATHN – New - Software reduces costs for health care - Clear trend higher since June – Buy the dip opportunity
  
• IMAX – Great long term chart – falling back to its 50 day moving average. A buy the dip opportunity

Mistake – I let my emotions over rule logic on IMAX It was too overextended from 50 day moving average to buy at 13.9. So I’ve sold the small position (1% of portfolio I bought at 13.9 for 10% loss) Keeping 1% bought at 12.9 and will add more at lower price.  Perhaps the most important rule of investing learn from mistakes and do not repeat them.

If markets were overbought I’d strongly consider ENOC, CAAS, ATHN, SEED, & PCLN.

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

Long Term Outlook = CAUTIOUSLY BULLISH

John Pilger, photo from his website

Radicals? Or Are They Right?

Yesterday several of you made comments and suggested listening to views that mainstream US media ignores or would call Left wing radicalism.  Are they Right?

• Jeremy Scahill – (from Sherwehe ) – An Independent journalist – We really have 189,000 troops & mercenaries on the ground in Afghanistan now. “Obama administration blows the Bush administration out of the privatized water.” LINK
• Matt Taibbi – (from M ) – Rolling Stone reporter on The Great American Bubble Machine How unregulated free markets have caused financial disaster. (yep we’ve referenced him before) LINK
• John Pilger - (from Bob Sadinsky ) Australian who twice won British journalist of the year award. “What Matters Above All is The Class One Serves” Obama says one thing and does another.  One powerful video LINK & “Obama’s most audacious lie is that Afghanistan today is a “safe haven” for al-Qaeda’s attacks on the West. ” LINK

I know that there are many of you who read this blog and are more conservative or major Obama supporters – You often email me. If you remain silent one can only assume that YOU think Scahill, Taibbi, and Pilger are right. These three authors have pretty much shredded Obama’s foreign and financial policies , and even called him a “liar” and “hypnotist.” Are they right?

Did the US military launch a quit coup in the USA and is Obama part of it?

Note if you have technical trouble in publishing a response on the blog send it to me and I’ll publish it.

Jeremy & Matt

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.

Again a late rally lifted stocks.

• McClellan Index at +31.70 = A bit overbought.   There is still some wiggle room for US stocks to move even higher before they reach @+60 or overbought territory -  There’s a long way to go till we reach @-60 or oversold.
  

The McClellan Oscillator is showing less room for upside gain.   However, technically this chart shows a series of 4 higher highs and a solid base at zero – It’s bounced 3 times off this number and is now a short term buying point.

Earnings season has begun – Alcoa’s report disappoints  and Chevron warned. Not good fundamental news to start the day

The long term bull is trend is firmly in place, but we are too close to overbought territory. Bigger risk to the downside in the short term. Look for US markets to get spanked today

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

Bought a 1% of portfolio position in IMAX – at 13.9

YOUR Watch List of Stocks . Unfortunately, I’m not daily checking these stocks out. Ideally, you’d like to McClellan index below zero (the further the better) and these all would be better buys. We developed these potential stocks about two weeks ago. Check old Investors411 for more.

• IMAX
  
• SEED – Broke out to new high yesterday Missed buying opportunity as the stock formed a short term base – Mistake Would buy a dip
  
• AAPL – forming a base near top. If markets move higher so should AAPL
  
• AMZN – a buy the dip opportunity. Again will move with market.
• HMIN – Recently broke out to a new high – Possible buy the dip.
  
• CAAS – Exploded to new high last week in huge volume. Too over extended to buy
  
• PCLN – Possible buy the dip opportunity
  
• F – Huge rally. Way too over extended to buy
• DRWI

SEED, HMIN, PCLN, & AAPL seem like best choices – But would like overall markets to be more over sold before buying. SEED is the stock that seems to have the best possibility this second. I’m not as comfortable with individual stocks as ETF’s.

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

Long Term Outlook = CAUTIOUSLY BULLISH