Wins in Missile Removal

About a week ago Obama decided not to deploy a radar & missile outposts in Poland and Czechoslovakia – supposedly for use against Iran-

• Russia is now NOT deploying missiles near Poland. Unfortunately this is a big deal in foreign press, but not here. LINK from India
• CNBC is reporting this AM that the Russians are “more willing” to accept sanctions against Iran.
• Biggest countries benefiting from this is Israel, Saudi Arabia, & Gulf states who will see increased spending on mobile defensive missile ships that will be placed directly between them and Iran.

Losses in Afghanistan

Obama said Afghanistan was a “Necessary” war and surged another 21,000 troops right after his election. Total now 68,000 vs. @ 140,000 in Iraq. Now generals are asking for a whole lot more (40,000+)More Americans are dying thee now than in any year since the war started.

• The recent elections were a fraud
• Why do we need to nation build there?  The chief product there is opium not oil.
• Did we not learn anything from Iraq? – Iraq is poorer now than when we invaded, now has the 3rd most corrupt government in the world, (LINK) was the first government to recognize Ahmadinejad’s victory, etc. (could write a page on other financial and human losses)

Bottom line – We need to keep terrorists from getting nuclear weapons in Pakistan.  The US needs to stop throwing money nation building in Iran, Afghanistan or any other similar country like the Sudan, Yemen, Libya etc. Ronald Reagan was right when he took troops out of Lebanon.

If you want to launch a missile and kill a bunch of al Quaeda who are a threat that’s OK, but Colonialism didn’t work in the last century and we should learn from history. Best Link for more info.

We could fix a whole lot of problems if we stopped spending trillions nation building and teating every problem as a military problem. Come on Obama – Remember “Change we can believe in? Those of us who voted for you do.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0,83 %	up
NASDQ	-0.69%	up
S&P500	-1.01%	up
Russell2000	-1.18%	-

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

Major US markets after rising over 1% after the Fed announcement gave it all back and then gave back more. Volume was up especially NASDQ) The other major indexes had average volume.  It sure looks like this is the beginning of the expected correction mentioned for the last two weeks.

The dollar, of course, moved higher. However it seemed to be US stocks leading the much larger currency market and not visa versa.

If you look at the charts of the major US indexes they are well extended over their 50 day moving averages. (More sophisticated traders look at something called Bollinger Bands) and at least a technical correction seems likely .  How this happens is everyone is expecting the dollar to fall further and consequently stocks to rise. Traders have to rush in to cover their positions or loose out on gains. So you have short term traders panic and a selling spree.

The troubling fundamental behind all this is the BDI (see yesterday’s post) The rate of fall is growing.

Earnings season is around the corner.

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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 level/number to watch – Yesterday BDI fell -71 t o close at 2175. Major support level has been broken and the rate of fall is still intensifying = Bearish for worldwide 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 )

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 2250 (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.

As predicted the $76 support level held.

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

The dollar rose +0.32% yesterday and closed at $76.33 This is above its 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

For traders (not long term investors) on individual stocks. I personally cashed in on a 8% gain in APPLE yesterday.  Will buy back in on dip. I often get burned with this – my major mistake was taking profits in Google at 150 and never got back in.  I do plan to buy more AAPL on a dip. Holding onto flu play NVS until flu epidemic breaks. Also considering buying MVIS (Microvision) or CIEN (more later on this stock) on any dip.

Shorter term traders may want to take some $ off the table in recommended ETF’s.

Note Investors 411 is covering a few stocks for traders.  This blog will remain focused on ETF’s for reasons previously discussed.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Mid Year Review of Stock Positions

Scroll down to bottom of STOCK section

Iran Day 13

Iran Photo from Andrew Sullivan Blog

Violence continues. See previously recommended sources – Lede from NYT, Huffington Post, Andrew Sullivan & BBC for more. At 9:13 EST Nico Pitne y at Huffington Post has a video of the Supreme Leaders military firing on demonstrators here

What can you do to help the protesting Iranians? Tom Friedman has an interesting long term approach. Iran’s Green Revolution = America’s Green Revolution. you can read about it here

Obama Debate Rages on

The are you happy with Obama ? debate continues to rage in the comments section. More fireworks See posts by  "A Friend" and D.

Health Care

Going to spend a lot more time on this . Two important points for now .

• From D’s comments post - "if a private option is so bad why have none of the dozens of counties that have public heath care voted to change back to private health care?"
• Time magazine’s Michael Grunwald has an excellent article on Health Care costs here Why some major hospitals and areas charge less than others for comparable services. Example Mayo Clinic & Cleveland Clinic @40% less than UCLA Med Center and John Hopkins.
  

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index	Percentage %	Volume
Dow	-0.28%	down
NASDQ	+1.55 %	flat
S&P500	+0.65%	down
Russell2000	+1.06 %	-

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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 .

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 rose +o.73% yesterday. Any move over 0.50 is significant. The strong inverse correlation between the dollar and stocks has existed for many moons. In the short term we are seeing some breakdown in the strong inverse correlation between the dollar and stocks. The best explanation for this is that the dollar is trading within a range and when it breaks out of that range (78+ to 81+ see yearly chart here ) this inverse correlation will again become  more apparent.

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 a 4 day fall. Technically we failed to make a higher high and if/when we make a lower low it will be technically a very bearish sign .  Momentum is building to the downside.

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.

Investors411 has 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 -  Bought yesterday at @$57. This is probably not going to be a position that will be held for a long time.

Caution – The last time I was worried about a drop (Swine flu) I bought FXP (ultra short China) and got burned

Mid Year Review of Our Positions

Part #1-Part 2 tomorrow

I’ve rounded off some of the numbers and the first number is the % of the entire portfolio invested. You can learn more by going to "Positions" section on top of blog. Some position in the same ETF were added at different times, so they have different results.

All numbers are approximate All position are year to date or from when they were bought this year (This does not include some short term day or swing trades – If your interested in this send me a separate email)

Our benchmark S&P 500 is flat for the year

FXI -(China)

• 8% of portfolio, up 24% position open
• 8% of portfolio, up 37% position open
• 8% of portfolio, up 20% position open

FXP – (Ultra Short China)

• 5% of portfolio down 13% position closed

EWZ (Brazil)

• 6% of portfolio, up 26% position closed

GLD (Gold)

• 3% of portfolio up 13% position closed.
• 3% of portfolio down 4% position open
• 3% of portfolio up 9% position open

QLD (Ultra long NASDQ 100)

• 6% of portfolio up 16% position closed

XLF (Financials Stocks)

• 5% of portfolio up 23% position closed

IFN (India)

• 3% of portfolio up 1% position open

GEX (alternative energy)

• 3% of portfolio up 10% position closed
• 3% of portfolio up 3% position open

The Hedge (Equal amounts of QLD – ultra long NASDQ 100 & SDS ultra short S&P 500)

• 15% of portfolio up 1% position open

SDS

• 5% of portfolio up 1% position open

Analysis tomorrow – But obviously Investors411, as in past years, toasted of our benchmark S&P 500

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING