Unfortunately the Tea Party and Republicans  have a NO COMPROMISE stand on cutting only areas like social security, education, medicare etc  that target the middle class, seniors and the poor.

Democrats are willing to compromise on these issues as long as wealthy Americans also share the burden. For every $3 in tax cuts you tax wealthiest Americans and mega corporations $1.

The above inspired by

• Sunday’s blog on OWS
• Matt Taibbi rebuttal to David Brooks

*******************

The Big Lie

.

Paul & I will look over and choose the best 10 to 15.

5 of the last 6 YSL’s have toasted the S&P 500

YOU made the Difference

Friday at 4:00 is the closing date.

Problem is GMCR (chart) was much more volatile. It started the year at 35, moved to 115 then fell to 70 where we placed the Put/Call hedge trade. GMCR almost always had a significant move after its earnings.

• A combination Call at 57.5 = $119 Put at 52.5 = $77 totals $196. So 196 + 250 (55 +/-57.5 or 53.5) totals $446. You’d need very roughly an 8% move to make money, but risk much less – $196

Major CAUTION – I HAVE NOT HAD A LOT OF EXPERIENCE AT THIS AND I’M GOING TO CHECK THESE NUMBERS WITH A COUPLE PEOPLE THIS AM.

With GMCR you could feel the pressure build. There was a war on between bulls and bears on GMCR. I was not as concerned with the details. This is minor in comparison.

I’m at best luke warm to a combination trade. Combination risks less $. If I do trade this I will announce it in the comments section of the blog before 1:00PM EST.

Wording of above also subject to change.

Plutocracy vs. Protestors

This Saturday is going to be a big day in the Occupy Wall Street movement across the world.

Frequent blogger EW has found a way YOU can learn more about demonstrations in the 900+ cities across America, in colleges, in London and even his home base Berlin.

“All you have to do on Facebook is write the word “occupy” then fill in the city {in the search box}.  Saturday the 15th is going to be a big day.  London starting demonstrations or occupation on Sat. the 15th. The Occupy London page  that has over 13,137 friends. Here in Berlin our facebook page as grown and has 1712 likes/friends”

This weekend we will be joining Popeye and the Occupy Boston demonstrators.

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Change You Can Believe In?

The ruling Plutocracy has almost all the power – Our Supreme court has given them the right to flood elections with money elections. They have an army of paid lobbyists that guide their legislative agenda.  They own almost all the major media outlets and/or almost all programing  exists because of their paid commercials.

The amount of people who hate or disapprove of American politicians is at an all time high, yet ordinary people are powerless.

The plutocracy wants to shut down the “Occupy Wall Street” movement. The billionaire mayor of NYC, Michael Bloomberg,  is trying to shut down the NYC Occupy Wall Street as I write.

To get the change you can believe in you have to start thinking outside the political box of party politics.

• Obama is not going  have the army protect the demonstrators in NYC like the army protected the Egyptian protestors speaking in their park.
• Obama’s not going to send federal marshals like Eisenhower did to protect school integration.
• Obama is not going to join and stand with the demonstrators in NYC and say “let them stay and speak”

YOU are the one that has to make a difference.

Join one of the 900+ cities and universities across the world.

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Stocks

Google had a grand slam earnings report after the bell. US Markets were mixed in light volume yesterday.

• Our #1 forecasting tool, the McCellan Oscillator dropped to 54.35 or moderately overbought = NEUTRAL/BEARISH
• Our #2 forecasting tool, the Put Call Ratio, dropped dramatically to 1.o5 = NEUTRAL

Yesterday, for shorter term traders, Investors411 turned on a green light for a RISK ON trade to go short “Preferable – into any rally today” That rally never happened. Now our primary and secondary forecasting tools have taken a major step back in a mixed market. It would have been more understandable if they fell in a down market.

Therefore,  the yellow light is on for the RISK ON trade. Shorting is still more viable, but  only if we see a much bigger rally and a higher PCR.  We’ll have to wait for Monday.

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Investors411 LONG Term Investments

Each day Paul (change setting from profile to activity) offers up to the minute commentary on the markets & YSL #5 in the Comment section of the blog.

Our Hedge Investment - Theory – Technology will do better than financial sector over time. JPM (big financial) missed earning expectations and Google (big tech) outperformed. This should be good news for our Hedge trade

• Short Financials – Investors411 will use ultra short SKF (opened at 78.91 – now at 74.12.
• Long technology - Investors411 will use ultra long QQQ (tech’s) QLD (opened at 81.13 – now at 86.05)
• This trade is still flat.

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Long Term Outlook

3 to 6+ months

NEUTRAL*

*Investors411 has 5 different long term valuations - BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, and BEARISH.

* Everything written in BROWN is a repeat from a previous day(s)

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMER ERRORS.

Given

• When Fed stimulus programs first started US quarterly GDP had fallen to between -4 & -5%

• The benchmark S&P had fallen to 666.

• 7 quarter years later US GDP rose from -5% to over +3%

• The benchmark S&P rose from 666 to 1200.

• Unemployment in same period went from over -700,000 to +200,000 a month.

• Martin Feldstein [Reagan's Chief economist] Fed stimulus is reason stocks go higher and strong performance of US economy

Republicans/Tea Party Take over congress in 2010

• Call for no compromise, focus on cutting government instead of stimulating economy, No tax cuts/stimulus for even small business or extension of payroll tax cut. (Obama Jobs plan) They threaten Bernanke.

• Investors411 warns May 20th that stimulus will run out and downgrades stock outlook. Another downgrade today

• GDP falls from +3.3% to +1.5% (last quarter), jobs from +200,000 to 0 created each month.

• There is almost no sign of inflation in the USA as Treasuries are at their lowest ever.- The arguement used against stimulus

• Richard Koo - warns that every time Japan’s government contracts money supply GDP fell. When government added money/stimulated economy GDP rose.

• 100% no accident that this economy started to turn as the Tea Party started to rise.

Conclusion - It took the most massive government stimulus ever to bring us out of the Great Depression – World War 2.  Republicans are growing in power and that means a contraction in government spending. The Fed is under assault and they want Bernake’s head and any stimulus to stop. (No QE 3 – No tax cuts for small business)

We are being pulled back into the Great Recession by the withdrawal of stimulus. Both the end of Obama’s $787 stimulus winding down and QE 2′s end – Predicted on May 20th by Investors411. The rise of the anti stimulus (even tax cuts for small business) contract the money supply, Republicans is the catalyst behind this downgrade.

It doesn’t matter if Republicans don’t want any form of stimulus to heap blame on Obama/Bernanke for problems or they are true believers of cut government stimulus/spending and GDP will grow.

As long as the constrict the money supply side gains power, stocks and more importantly the economy will suffer.

Danger Will Robinson Danger Danger

Investors411 The Long Term Outlook is changed to CAUTIOUSLY BEARISH

Today’s meltdown, is only the start if there is no additional stimulus and we continue to contract the money supply then even the old 666 on the S&P could be challenged in the next few years.

The Lost In Space Robot (old TV Show) that shouted when danger was around went off with a huge commotion and shouted

Danger Will Robinson Danger Danger.

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Paul’s Corner

Looks like the market thumbed its nose at Operation Twist and sharply sold off after the news.  Just a sell on the news or are we in for more trouble?  Ian Woodward posted a great blog last evening with very detailed analysis of what to watch for in the market action.

LINK

All sorts of talk coming out from the Republican candidates on how to create jobs, suggestions range from eliminating the minimum wage, reducing government regulations, lowering corporate taxes and more. Amazon.com has a distribution warehouse in Allentown Pa. Read about how they have created jobs and the new work place conditions we all can look forward to in the new reality.

LINK

HGSI is having another informative webinar next week Sept 28. You do not have to be a HGSI user to benefit from the free webinar. Here are the details:

Join us on Wednesday, September 28th from 8:00 pm until 9:30 pm for “Prospecting and Trading in a Weekly Timeframe” by Ray F Ebert, PhD.

Ray will share his disciplined weekly trading strategies using HGSI and other software. He will provide technical analysis of prospects submitted by the audience.

Earlier this year Ray was selected to be a “Spiker” on SpikeTrade, a trading community managed by Dr. Alexander Elder and Kerry Lovvorn. In his first quarter as a Spiker Ray won first place for equity and second place for points in the weekly competitions. He also leads the Washington D.C. area HGSI User Group.

Register at: LINK

Looking at individual YSL 5 stock action yesterday after the Operation Twist announcement caution is suggested. If you dare to play please use real stops and don’t keep lowering your stop if your stock sells off.  ZAGG is getting toasted at the moment and needs some time to settle down and correct.

Detailed YSL 5 analysis this weekend, maybe. Watch the comments section.

Remember, you are responsible for your investment decisions, and I am not. Please do your diligence, and please take ownership for your actions because I‘m sure not going to.

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I am exiting all long stock positions – Today’s meltdown may rebound, but the long term outlook remains bleak for stocks as long as the folks who want to contract money supply, are gaining power. (I’ll wait on GLD till it hits its stop/sell)

What would change this outlook is more stimulus from our Fed to Europe & USA. A realization that constricting money supply hurts stocks and the economy/GDP growth by a greater segment of the population. Unexpected GDP growth  Europe, emerging markets, USA.

HFT’s are obviously powerful enough to manipulate stocks up and down within a range.

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Long Term Outlook

(for US stocks only – not our economy)

CAUTIOUSLY BEARISH

*Investors411 has 5 different long term valuations - BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, and BEARISH.

* Everything written in BROWN is a repeat from a previous day(s)

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

Jon Stewart

Amerigasm

On Monday night we had the CNN/Tea Party sponsored Republican Debate. “A truly remarkable pairing, as a fringe often derided incopetent bunch of yahoos was granted legitimacy by pairing with the TEA Party.”

How totally incompetent was CNN.? How horribly low and devolved into spectacle has news become? Watch the Jon Stewart video Their debate rivaled The World Wrestling Federation in hype and spectacle.

Our mainstream news media as devolved into a very laughable parody.

Einstein

Relativity

Obama’s Job Program

This week many of you made some excellent comment on Obama’s job program.

• Content credible
• He proposed how to pay for it – again credible with more to come next week on cuts to entire budget.
• It’s political – Obama  intends to run on this.
• Republicans have no plan or ones that include cutting taxes on big business/wealthy, and no specifics on deficit reduction.

Relativity – We have a patient whose dying and Obama’s job plan does offer  the patient  a pint(s) of blood. But the problem is that the wound is open and bleeding.

We have a dysfunctional shadow gambling/financial system that need regulating and regulators. This shadow system is now impacting Europe. Major US companies continue to bleed US jobs overseas.  Until the wound is stitched and closed the prognosis – negative.

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Investors411 Technical Forecasting Tools.

• Investors411 uses the PCR to measure the path of least resistance for HFT dominated stock market. HFT’s love leverage and if there are more puts then calls, there is simply a supply glut on one side that forces a move to the other. See above.

The McClellan Oscillator

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Reading The Tea Leaves

Short Term Outlook

days, week+

• Our forecasting tool are  Bearish/Neutral (see above) - You rather enter oversold markets and exit overbought markets. Advantage to Bears.

• If the PCR was below 0.80, the Bulls would rule. (See Current Positions below for more)

• We do have a technical series of higher highs and higher lows build on major indexes.

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500

See POSITIONS Section of blog for more on YSL#5.(scroll to bottom)

• Tea Leaves – Any @200 point Dow rally should bring the MO to or above +80.  Ideally we like a lower PCR. However, this (a potential +200 point Dow rally today) could be a risk on trade to nibble at - GO SHORT – Use a leveraged ETF like SDS or TZA or sell some long positions.

• Monday was a risk on to go long. It worked.

• If @+200 Dow points today – HTF will have pump this market higher and some technical levels will have fallen (higher highs). Institutions will get excited and buy, then HFT’s will dump it. CAUTION – This is contrarian advice. Most analysts will see  a +200 point move on the Dow as bullish. Longer term it technically is.

• Risk on = For those that can tolerate the risk you have a fair trading opportunity – GOING SHORT in this case -. It could be better, even much better, but the tea leaves put the odds in your favor

• If Investor411 goes short or buys GLD you will see it first in the comments section of the blog.

Positions

NLY - Annaly Capital Mgt. Ultra high dividend stock –a @14% dividend

GLD – (Long Gold ETF) Bought at 167.05 - Sold 1/2 for 8% gain. GLD closed at 174.40. Gold is contrarian to stocks and More willing to buy tan sell right now into a stock rally.

Disclaimer - I buy everything in the hypothetical Investors411 portfolio. If stock is mentioned and I own it you will know.

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Long Term Outlook

(for US stocks only – not our economy)

NEUTRAL*

*Investors411 has 5 different long term valuations - BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, and BEARISH.

* Everything written in BROWN is a repeat from a previous day(s)

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

• Reading the Tea Leaves - Boy did I get Friday’s call wrong. Markets move higher as the Fed Chair went directly after Republicans, the Tea Party and Congress in his speech (see above editorial)

• Reading Tea Leaves –  Let’s see how far the HFT’s can take stocks into overbought territory before yielding to bears. Aside from that one venture to over +80 HFT’s and major institurions have balked at taking oversold levels over +60 for a year.

• Even HFT’s can’t ignore major fundamental aspects of stocks/economics for a long time. Fundamentals are not good. Technically, however,  we’ve put in a double bottom and that could sustain a low for a while. Since many traditional investors have long since stop investing, HFT’s do dominate trading and they make their money off the markets moving.

19 months ago in his 2010 State of the Union Barak Obama made perhaps his biggest mistake.

He did not focus on  the clear and present danger of jobs growth (which would have lowered the deficit) instead he focused on deficit recuction through cutting programs and raising taxes.

Perhaps he thought the other side would compromise in good faith. Perhaps, as some believe, he’s just a tool for the corporate oligarchy and in the end would make sure the folks who finance elections would get what they want.

On the battlefield General Petraeus in Iraq compromised with the terrorist who had fought Americans and brought them over to the other side = a compromise. But is the USA compromise to conservatives is an abortion – Tea Party Patriots – Don’t compromise.

Thanks to Jim J (for finding) and Erin Clouse (editor of the Brookline TAB for posting) this editorial from which the following points are drawn. The Tea Party and all the Republican candidates have take taken oaths NOT to compromise. The Tea Party -

• - It badmouthed the economy and the government at every opportunity, undermining the confidence of consumers, businesses and investors both here and abroad. And yes, the confidence of credit rating agencies.

• - When President Barack Obama and House Speaker John Boehner got close to making a deal for $4 trillion over 10 years, the tea party caucus yanked Boehner’s chain, and he pulled out of the talks. The grand bargain was dead.

• - Tea partiers spread the myth that a default wouldn’t be so bad, further feeding the perception that a powerful political bloc couldn’t be trusted to be responsible with the nation’s finances.

• - The tea party drove the debate — its leaders say so with pride and most pundits agree — to an unsatisfactory and unpopular conclusion: the debt ceiling reluctantly lifted, a last-minute deal nobody likes, a scant $1 trillion in deficit reduction, no reforms to taxes or entitlements, a disgraced and dysfunctional Congress, and a December date for another battle over the same turf.

As most of you realize, progressive are almost always willing to compromise – to look for a win win situation, but a conservative shoots first and asks questions later. Their world is black and white, heaven and hell, you’re either with us or against us and best your either a patriot or the enemy.

Click on picture below for enlargement  of latest (no compromise) brown shirted Republican to enter race

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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

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Technicals, Fundamentals & Analysis

Shorter Term Outlook.

day/days/week

Gert Frobe from James Bond movie Goldfinger

Over the last two weeks almost every serious investor learned about gold or GLD. Two of the three legged stool that hold up the world economy wobbled over the last two weeks and investors rushed in fear to the shiny sparkle of gold.

The Three Legs

• USA – Total incompetence in congress. The far rights  strident refusal to compromise has set off warning bells from the stock market to Standard and Poors. Every European solution has included a tax cut on the wealthy, but NOT the USA which is dominated by Tea party Ideologues. Consumer confidence in the USA is near an all time low while retail sales is still blissfully chugging along. See chart below show a massive disconnect.

• Never forger our mantra – High Frequency Traders Rule US Equities – These entities make their decision in microseconds and not on long term trends.

• The McClellan Oscillator (MO) fell to-8.20 (-30 somewhat oversold, -60 oversold, -90 OMG oversold). Chart shows we are almost dead center in the middle of oversold and overbought territory. There’s wiggle room for stocks to move either way = Neutral

• Reading The Tea Leaves - Stocks are moving on headlines and that move is exaggerated by all the HFT trading.

From Friday’s Bottom Line - Technically because of the retest of the low and strong momentum higher HFT’s will take markets higher.  Headlines still rule and HFT traders can react instantly and with great volume to headlines.

Investors411 has been on a hot streak with daily calls and let’s see if we can make it 4 in a row  - Momentum carries markets higher today. It’s been relatively easy to get out of massively oversold territory, as we get more and more overbought the going for the HFT’s will get tougher and tougher.

Longer Term Outlook

weeks, month, months

• Repeat - May 20th forecast still stands. The recent Washington debt crisis debacle has focused everyone on cutting the money supply.  Simple math – The less money that’s out there = less jobs = greater chance the “Great Recession” returns. European debt and emerging market’s inflation fears add to this. As predicted the 15+ % drop has come to pass this summer Best read of tea leaves is a 1 in 3 chance for a bear market (20% drop from highs)

• Long Term Outlook Listed Below. Major long term trend (monthly) lines that have been broken. LINK. However, we are close to climbing back to NEUTRAL (see 50 day moving average on monthly chart), The Fed has promised long term low long term interest fates till 2013, and that’s significant for US economy. If the Fed does some type of QE #3 – this could also get us back to CAUTIOUSLY BULLISH LINK

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Look for Paul’s Corner every Tuesday and Thursday

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

YOUR Stock List #5 is done and except for some last minute tweaking and waiting for an earnings report. It will be published on Thursday in Paul’s Corner.

NB – With the exception of NLY & GLD (both profitable and remember NLY’s 3 to 4% dividend) Investors411 held no long positions for most of the summer and especially August.

NLY - Annaly Capital Mgt. Ultra high dividend stock – It’s been shaky, but so far NLY has held up reasonably well through current stock market slide. NLY is the only position in Investors411 hypothetical portfolio

I still have a Put position to protect NLY. (strike price $17.00 for 3rd Friday in Sept) Also puts on other dividend stocks.

GLD – (Long Gold ETF) Obviously a MAJOR mistake to sell and take meager +3% profits. Like a millions of other people who see worldwide economic problems ahead – waiting to buy another diptobuy. Also sure looks like GLD had its climax run and could be settling. We’ve had a two day dip and will buy if day 3 of a dip occurs.

Disclaimer - Personally I own  a group of dividend stocks including NLY, SNH, KMP, MO, HTD, T, ABV & AGNC and a few other smaller positions I have puts on most of dividend stocks I own. I buy everything in the hypothetical Investors411 portfolio. I also own some (about 80% of thisposition has been sold) SDS & TZA (ETF’s that double and triple short the market) as hedges.

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Long Term Outlook (for US Economy)

BEARISH

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Long Term Outlook (for US stocks)

CAUTIOUSLY BEARISH*

*Investors411 has 5 different long term valuations - BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, and BEARISH.

* Everything written in BROWN is a repeat from a previous day

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

Investors411 has a 6  year record of beating the S&P 500

Fat so called “Free Markets” and the public

Investors411 2008 prediction – “The problem in the financial sector is far far far far far bigger than first imagined. Impact of this mess is going to take years to resolve.”

Each year in the POSITION section of the blog the above statement has been repeated. The so called “free market” capitalism that is sinking the US economy now looks like it will now take at least a DECADE before any resolution is is forthcoming and that’s if we are lucky. For a more detailed outlook as to what’s happening see OVERVIEW

Unfortunately The MAY 20 downgrade of the US economy and stocks has come to pass (we’re still a couple % short of the predicted amount, but that should happen today)

Like the two guys on the seesaw above –

A list of the economic imbalances in the future for the USA.

• Loss of focus on jobs – Without jobs the economy doesn’t grow and the deficit does not shrink
• Stimulus runs out – You can argue its effectiveness, but bottom line it added to GDP
• QE2 ends – The FED liquidity supply that propped up both stocks and the US economy is over
• Constriction of money supply begins – Government programs that helped create a vibrant and united America will be cut and jobs get cut with them. Simple math less money supply = less GDP growth= Great Recession Part 2
• Japan and Europe are in trouble, Emerging markets have inflation problems. (see Great Recession/Roubini link above)
• A “Misguided” S&P downgrade that is going to further decimate the state budgets/jobs and consumer confidence

Blame - What’s needed is short term stimulus and medium and long term austerity measures. (paraphrase from Roubini link above)

Tea Party/Republicans = Only one presidential candidate, Jon Huntsman, has dared take an opposing view to Tea Party orthodoxy.

• No compromise attitude.
• Free markets or nothing at all.
• No government regulations on markets.
• Abolish the Fed.
• Return to the gold standard.
• It’s the fault of the teachers, cops, firefighters, union workers, blacks, foreigners, foreigners and every low wage earner in America that we are in this crisis.

Democrats

• The Democrats started caving in under Clinton when Greenspan and others deregulated investment banks leading to over leveraging and the 2008 meltdown.
• Obama has caved in to big business/”free market” at almost every turn (see past blogs). From his health plan, to trade treaties to caving in on taxes for the wealthy. He’s NO Teddy Roosevelt.

US (you and me) – The reality is we have no one to blame but ourselves for letting greed triumph over common sense and caring about our fellow partners on the planet

Investors/YOU

Its sad to see so many Americans who have made out financially because of our economic system now turn on the system that gave them their wealth.

QE #3 may stabilize the meltdown, but  the Tea Party will do everything possible to block it.

Cash is a better position than equities, but as explained before it too has its drawbacks.  I hate having a negative position on American companies but in reality the major corporations are globalized entities and care far more about profits than you.

These globalized entities or corporate oligarchy care far more about profits than where they hire workers or find consumers. The less governance they have the more they will exploit workers and working conditions.

Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

NLY - Annaly Capital Mgt. Ultra high dividend stock – It’s been shaky, but so far NLY has held up reasonably well through current stock market slide.

In  my personal portfolio I still have a Put position to protect NLY. (strike price $17.00 for 3rd Friday in Sept) Also puts on other dividend stocks.

GLD – (Long Gold ETF) Bought at 157.1 last week. (see last weeks blogs and comments section) –  Sold at 162.4 last Wednesday for over +3% gain,  Will buy back in on dip.

Disclaimer - Personally I own  a group of dividend stocks including NLY. I have placed puts most  of of dividend stocks I own. I buy everything in the hypothetical Investors411 portfolio. I also own some SDS & TZA (ETF’s that double and triple short the market) as hedges.

My overall positions in stocks is to be short the US markets

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#1 Technical forecasting tool – The McClellan Oscillator (MO) chart fell to to -111.38 (-30 somewhat oversold, -60 oversold, -90 OMG oversold).

So we are at clearly OMG oversold levels.

Context -  last summer after QE 1 ended and before QE2 started we reached -135 However, he situation now looks worse than last year, but not as bad as 2008.  It’s reasonable to expect a -135 or lower on the MO

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Long Term Outlook (for US Economy)

BEARISH

_________________

Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative Comments Section every day.

The Long Term Outlook has been downgraded because technical support has fallen and above.

_________________

Long Term Outlook (for US stocks)

CAUTIOUSLY BEARISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

The manufactured debt crisis has dealt a serious blow to our economic recovery. The clear and present danger of the jobs crisis and a double dip recession has been negatively impacted. Since the Tea Party has come to dominance the jobs picture has headed south. There is far more pain ahead for the US economy

• The focus has been changed from creating jobs to dealing with the debt.

• Corporate oligarchy is taking advantage of the distraction to ship more jobs out of the USA. Latest – Ford builds billion dollar plant in India. Emerging markets are growing while ours continue to shrink.

• Corporations are overflowing with record profits, yet NOT creating jobs in the USA. Any cuts in government spending NOW means less jobs NOW.  Without jobs there is no recovery. Lisa Shapiro on job cuts

• Most cuts to government in the next year+ will do serious damage to job growth. Those cut 5 and 10 years out will do far lass damage.

Obvious political consequences of debt deal for Obama was perhaps stated best by a young voter who first voted in 2008. – “I’m done with Obama…I can not support a President who won’t stand up against bullies.”

Mitt Romney, at the last moment, threw his support behind the Tea Party and rejected the budget compromise. The Invesment Banker running for president (Romney) is no different than any Tea Party member. Far less moderate than most Republicans who voted for the deal.

I would have followed Bill Clinton’s advice. Raised the debt ceiling using the 14th amendment and included tax cuts for the wealthy in any deal.

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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

Shorter Term Outlook.

day/days/week

• The MO was over -80 yesterday. (see chart) When the Dow dipped @ 140 points the MO would have reached the lowest levels  in over a year. But the MO, tabulated only at the close, closed 130 points higher.  Now that the pressure of the manufactured debt crisis  is gone both the MO and the USD should be better in forecasting. Translation – way too many oversold short positions becomes an important factor to juice a rally.

• Two of our most successful technical forecasting tools listed below -

• The McClellan Oscillator (MO) chart rose to -69.81(-30 somewhat oversold, -60 oversold, -90 OMG oversold). MO clearly shows oversold  conditions exist. Current Level = Bullish

• $USD The Dollar rose significantly +0.49% yesterday (+/- 0.50 is a significant move and the dollar is usually a contrarian indicator) On a fundamental level you’d expect a rally in dollar over temporary settlement of debt problem. Technically we are sitting near bottom of trading range.= Neutral

• Reading The Tea Leaves – A technical relief rally was hurt by bad economic data (ISM number) yesterday. However, when you are this much oversold all you need is the slightest hint of good news to string together up to handful of bullish days. When MO gets into the green (above zero) that technical pressure eases off.

Longer Term Outlook

weeks, month, months

• Some serious damage has been done to the US political structure as a functioning body. Even though we didn’t default everyone now realizes that there are a sizable number  of US politicians who are willing to hold the US economy hostage to their ideological beliefs.

• For Main Street USA this means uncertainty. This will be devastating.  The debt crisis deal will cost jobs rather than create them. If you contract the money supply in the USA it means less jobs.  Investors411 mantra - How do you fix any deficit without jobs?

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Paul’s Corner

Hello world, it’s Aug 2 and pre market futures are down, let’s sit on the side  of the market for awhile!

My good friend Ron Brown from HGSI summed it up nicely last week “It is a dangerous market environment, so unless you like extreme mood swings, it may be best to hold off on initiating new positions.”

One would have expected more than a mild yawn in the market after Washington agreed to stop acting like children but what can you expect from a bunch of babies? Futures are down this morning as it appears the forecasters on Wall St are back to looking at why the economy is stalling again. When they figure out why I wish they would tell us.

So what was in demand on a down day is always a great place to search for stocks. Yesterday Aug 1 the top 3 groups:

Oil & Gas Exploration & Production (11.88%, 12 securities)

• Anadarko Petroleum Corp (APC)
• Approach Resources  Inc. (AREX)
• Berry Petroleum Company (BRY)
• Brigham Exploration Company (BEXP)
• EQT Corp. (EQT)
• EV Energy Partner LP (EVEP)
• Gulfport Energy Corporation (GPOR)
• Kodiak Oil & Gas Corp. (KOG)
• Noble Energy  Inc. (NBL)
• Range Resources Corporation (RRC)
• Royale Energy  Inc. (ROYL)
• Vanguard Natural Resources (VNR)

Casinos & Gaming (5.94%, 6 securities)

• Churchill Downs Inc. (CHDN)
• Entertainment Gaming Asia  I (EGT)
• Gaming Partners Internationa (GPIC)
• Las Vegas Sands Inc (LVS)
• Melco Crown Entertainment Lt (MPEL)
• Nevada Gold & Casinos  Inc. (UWN)

Specialty Chemicals (5.94%, 6 securities)

• International Flavors & Frag (IFF)
• Lubrizol Corporation (LZ)
• LyondellBasell Industries NV (LYB)  (YSL 4 Member)
• Material Sciences Corporatio (MASC)
• Rockwood Holdings  Inc. (ROC)
• W.R. Grace & Company (GRA)

Dave Steckler always has an interesting blog and he specializes in ETF’s. Yesterday he discusses how to use the Bollinger Band around a stock and the 4 day SMA to time entry signals:

The composite index touching the upper BB should be viewed as a set-up, not as a long entry signal.  If the market continues falling like it did in the first half of June the composite index will continue climbing the upper BB – wait for the index to close below the 4-day SMA after touching the upper BB before going long.  Put another way, the BB touch is the set-up and the SMA crossover is the long signal.  This last happened on June 14th.

Please read his whole blog to understand this principle.

LINK

So what’s the market going to do today, futures are up this morning, is this a new morning in America? Let’s load up Quote Tracker………here we go folks another day of fun!

Remember, you are responsible for your investment decisions, and I am not.  Note, none of the above stocks are recommended for buy or sale. Please do your diligence, and please take ownership for your actions because I‘m sure not going to.

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

Short term traders - You have an MO at -70. This should be a decent opportunity to invest in a momentum play

Longer Term Investors – Specific areas tied to globalized companies and foreign stocks could outperform. Defense contractors & some heath care stocks are negatively impacted by debt deal in DC and will sufer.

NLY - Annaly Capital Mgt. Ultra high dividend stock – Kudos to anyone who bought NLY on the dip.

In  my personal portfolio I have a Put position to protect NLY

GLD – (Long Gold ETF)

UDN – (Short Dollar ETF)

Both UND & GLD were bought  because of the clear and present danger of a default. Both are overbought at the present time. It would be more prudent to enter each position when it was oversold.  Selling UND today.  Better long term outlook for GLD (gold).

Disclaimer - Personally I own  a group of dividend stocks including NLY. I have placed puts on one ETF of a major index and a couple of dividend stocks. I buy everything in the hypothetical Investors411 portfolio. I sold about 1/2 of the short positions yesterday

JS in the comment section has used the term ”insurance” to describe the way ”Puts” are used protect long term investments. – email me if you want to know more or post a question in the comments section.

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Long Term Outlook (for US Economy)

BEARISH

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Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative Comments Section every day.

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Long Term Outlook (for US stocks)

NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

A Liberal Icon?

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Default

According to today’s Tea Party dominated Republicans, Ronald Reagan must look like a dirty liberal/socialist icon. He amassed the greatest increase (in percent) of national debt and then raised taxes over 5 times in the later part of his administration to bring his run away spending more into balance.

Reagan and Dem. House Leader Tip O’Neill may have disagreed but they worked for compromise. However in the age of Murdoch ratings generated media journalism has changed.

The no compromise brinksmanship of the Murdoch inspired far right Tea Party (Remember it was FOX news in the USA, like the now defunct  168 year old News of the World in Britain that did everything it could to instill right wing no compromise bias) has seemingly backfired on the far right.

Poll after poll is showing the unwillingness to compromise on the part of the far right dominated Republicans as an overwhelming negative in the debt crisis debacle.

A Member of the No Compromise Far Right

Consequences

It’s time to take a serious look at what may happen to your financial well being if the USA does default.

Note - I don’t think this is likely (best guess 30% chance of no compromise) and if 8/2 does happen without a compromise I expect Obama to invoke 14th amendment.

Therefore, Louise Story’s Wall St Makes a Fallback Plan for Debt Crisis is a must read.

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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

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Technicals, Fundamentals & Analysis

Shorter Term Outlook.

day/days/week

• Remember, FEAR is generally thought of by market psychologists as TWICE as powerful as GREED

• Yesterday was the confirmation day of Tuesday’s big rally. What we got is a weak confirmation – a slight decline but in weak volume. Technically this is a wee bit bullish.

• As mentioned two weeks ago – “If the US debt default starts to hurt stocks, politicians will fix the problem rapidly because their campaigns are all funded by an elite oligarchy of insiders.” However, it matters what investors worldwide think of our political/economic system. That confidence was shaken in 2008. Idiot politicians can further destroy this confidence with their inability to compromise.

• Two of our most successful technical forecasting tools listed below – The closer we get to August 2 the less these forecasting tools will matter.

• The McClellan Oscillator (MO) chart rose to -7.81 (-30 somewhat oversold, -60 oversold, -90 OMG oversold. The more oversold we get the better the chance for an oversold rally) Lots of room for MO to move higher or lower = Neutral

• $USD The Dollar fell a significant -0.57% yesterday (+/- 0.50 is a significant move and the dollar is usually a contrarian indicator) Price chart shows we are in a month+ long trading range. It is still in that range, it broke though a major support level. It’s 50 day moving average. Normally I’s give this a Neutral/Bullish for stocks, But because investors are focused on the  US debt crisis = Neutral

• Reading The Tea Leaves Solid earnings in techs are bullish, but all eyes still on US congress.

Longer Term Outlook

weeks, month, months

• May 20th forecast still in effect.

• Repeat - It’s impossible to accurately predict how the politically manufactured Kabuki Dance over the debt will end. Therefore, hanging in their with a NEUTRAL Long Term Forecast. However, perception slightly favors bulls.

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Paul’s Corner

It’s  July 21 and TIMBERRRRRRRRRRR!

The market? No RVBD, a former member of YSL, reported earnings Tuesday  after the close. It didn’t meet revenue expectations, and took a 23%  hit. This is a very important lesson as why it’s best  to wait until after an earnings release for a buy. Some times in a good up trending market one can gamble a bit prior to earnings, but 2 weeks or more prior to earnings is suggested.

I trust  none of you folks were in still RVBD as it should have been exited back on Mar 18 when it dropped through the 50 DMA in the market down turn and it kept heading south. True it had a nice double bottom, but it wasn’t a good double bottom since the second bottom wasn’t lower than the first. Sure it had a nice climb up the chart with the strong market two weeks ago, but when it started ticking off prior to the expected earnings date profits were best taken.

If you are the true BUY THE DIP optimist, have loads of spare cash and we were in an up trending market, a buy in this area could be a good gamble, IF you give it a few days to settle down before you dump your wife’s Christmas Club into RVBD. (Christmas Club’s, remember them?)

Another YSL member FFIV reported after the close yesterday, met expectations and is off about 15% in after hours trading. FFIV is a competitor to RVBD and seems to being taken to the cleaners along with RVBD. Talk on Wall Street suggests “tech” isn’t a safe bet until September. Interesting forecast, we shall see. BTW FFIV’s chart has been horrible for months and sale was suggested many months ago by Investors411.com.

Dave Steckler in his latest blog discusses the current market and  “Consolidation“. A new term for some and an important thing to watch for in the market. As always, Dave gives  a great chart lesson.

LINK

Off the stock subject, the current Republican front runner appears to be Romney. Great looking, charismatic, and knows how to talk the issues. He is touted as a job creator, but is he? Here is a good article from the left wing press Bloomberg, tearing apart his job creating myth. Remember this next fall folks!

LINK

So what’s the market going to do today, is this a new morning in America? Let’s load up ThinkOrSwim………here we go folks another day of fun!

Remember, you are responsible for your investment decisions, and I am not.  Please do your diligence, and please take ownership for your actions because I‘m sure not going to.

______________

Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

NLY - Annaly Capital Mgt. Ultra high dividend stock - Has dipped down into buyable position. Caution if we do have meltdown over debt crisis this stock will take a hit.  However through 2008 meltdown it still produced a double digit dividend.

All the blow concepts are at least, in part,  considered of the potential of a US default

GLD & SLV - Will buy GLD today simply as a hedge against default.

UDN & UUP – Considering holding UDN – An ETF that shorts  the dollar. Another possibility in “Puts” on UUP – An ETF that is double long the dollar.

BZF – ETF that tracks Brazil’s currency.

Disclaimer - Personally I own  a group of dividend stocks (also a couple other long term investments) including NLY. I have placed puts on one ETF that shorts a major index and a couple of stocks. JS in the comment section has used the term “insurance” to describe the way “Puts” are used protect long term investments. – email me if you want to know more or post a question in the comments section.

I firmly believe you can make money with BOTH long term investments and short term trades. See POSITIONS Section of blog for ideas

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Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative Comments Section every day.

Don’t forget to send in your stock choices fro our new Stock List #5

Deadline Friday noon

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Longer Term Outlook

NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE