John Boehner

Take No Prisoners

Our political structure has devolved into a take no prisoners style of government.  Compromise has become a dirty word and threats of financial armageddon will soon becoming reality.

Ezra Klein (Bloomberg & Washington Post) has a comprehensive look at John Boehner’s (Republican House leader) demands over the debt ceiling.  This is obviously influenced by the Tea Party’s growing domination of the Republican Party. The Democrat’s too seem only be out to score political points.

Klein’s name is linked to the article and I stronly urge you look at it.

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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

Investors411 record - 6 years of beating benchmark S&P 500

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Shorter Term Forecasting Indexes

There are hundreds of forecasting tools, – These two tools have worked

When they stop working Investors411 will use other Indexes

• The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar fell again yesterday -0.17% The dollar has challenged its falling 50 day day moving average/strong resistance level and failed to overcome this barrier for the last three days.  A short term rebound earlier was bullish, but now the bears are regaining some momentum. Long term trend still bearish, but no clear direction exists until the 50 DMA or the old low is broken. (see link to chart) = Neutral
• McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] Mo on   rose to +32.00. We are approaching oversold. Last two highs of between 50 and 45 gives us a day or two(depending on gains) left to the rally. = Neutral

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Dividends

Part 2

The following are the sexy, high octane , high risk dividend plays. The criteria for the selection of all dividend stocks was announced Monday.

Most of the group below are in some was involved in trading derivatives. They may use black box trading techniques and/or be high frequency traders.

Disclaimer - I own the two stocks mentioned below. You might want to own one of their competitors. Do your own research

NLY – Annaly Capital Management. Dividend 13.82% per year last quarter.

What they do – “We are primarily engaged in the business of investing, on a leveraged basis, in mortgage pass-through certificates, CMOs and other mortgage-backed securities representing interests in or obligations backed by pools of mortgage loans issued or guaranteed by Freddie Mac, Fannie Mae and Ginnie Mae.”

NLY, I believe, is the biggest firm of this group. Market cap = 14.4 billion. Others competitors and similar high yield dividend plays are smaller.  JS points out in the comments section that NLY is a favorite stock of Jim Cramer.  The dividend for the stock 0.60 per share 8 quarters ago and reached a high of .75 six quarters ago and  the latest quarter was .62.

AGNC – American Capital Agency. Dividend 18.78% per year last quarter

AGNY is a 3 year old company. Market cap $1.9 billion.  It rose to a hight of $1.50 dollar per share dividend  two years ago and has had what seems like a too good to be true steady 1.40 dollars per share dividend for the last 7 quarters.

Competition – You may find the following companies more desirable after you do the research.  HTS, MFA, IVR, CYS (the last has the highest dividend payout) There are others in this group.

Reasons for holding – The government has weak regulations on the derivative markets and it does not look like any changes are coming in the future.  These are risky plays and NLY is now trading at 18, but did reach a low of @ 11 in 2006 and 2009. (See link to chart) From late June of 2008 to late May of 2009 the dividend of NLY was a relative steady 0.50 to 0.55%. So NLY during the financial meltdown had a steady return.

More on dividend stocks ASAP – Next the anchors – or the dividend stocks you may hold through tick and thin.

Caution – all dividend stocks are vulnerable to run away inflation.

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Positions

Reading The Tea Leaves – MO has been an amazing accurate forecasting tool for the past year.  It saying we are getting near a technical top (See above)

Disclosure - I have personal ETF positions in REMX and manage a fund that has a 5+ year position in GLD. I also own NLY and AGNC mentioned above

• REMX is going to take a hit today. The #4 stock in its portfolio MCP had a bad earnings report and was down 12% in after hours trading. This will probably drag REMX down below its 50DMA. I will lighten my position here (at a loss) if there is no rebound by the end of the day.

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Check out the advice, recommendations, analysis by bloggers on stocks,politics and trends in the comments section of the blog  Many of the best concepts regarding YOUR Financial Future are discussed their. Watch for Paul’s Corner every Tuesday and Thursday

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Longer Term Outlook

CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

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!

Getting No respect – Rodney Dangerfield

No Respect

Yesterday 53 Democrats voted to end the filibuster on a bill that would give tax breaks to companies that brought outsourced jobs back to the USA. It failed to get the required 60 votes to break the filibuster.

It’s remarkable that almost NO media outlet is giving this important jobs bill coverage “aimed at small manufacturers, including a payroll tax exemption for companies that move jobs to the U.S.“ Ill. Senator Dick Durbin was the bill’s chief sponsor. What’s more important than Jobs, Jobs Jobs for the American economy and workers?

The TEA Kettle Movement

What is getting all the news instead of substance is the “Tea Kettle Movement”  (Tea Party) That’s just “letting off steam.” The above & following quote is from NYT’s Pulitzer prize winning Tom Friedman

“The Tea Kettle movement can’t have a positive impact on the country because it has both misdiagnosed America’s main problem and hasn’t even offered a credible solution for the problem it has identified.”

Bottom Line – Screams and anger gets the attention in our corporate controlled media instead of substance and jobs. Is Friedman right in his assessment?

Investors411 is going an break for a few days, the comments section will be open. Also next week Investors will be shutting down Thursday and Friday. Happy trading.

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

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

Mantra for September - ”The Black Box/High Frequency Traders BB/HFT control the majority of trades. CNBC’s Jim Cramer -”BB/HFT make up 80% of trades.”

US Markets -

Stocks rallied moderately in increased volume. The NSDQ’s volume was even above average. But average volume is @30% less than this time last year.  Lack of volume shows that the retail investor has all but vanished and financial manipulators are in control.

One of those manipulators is our FED that again used the POMO to push money into the economy yesterday. Perhaps this served as a reminder to investors that the FED is ready to “do whatever it takes” to insure economic health, even if inflation is the end result of all this money flowing into markets.

Markets moved higher on some worse than expected consumer confidence news.  Higher stocks on bad news is bullish.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar fell  -0.41% yesterday. After sharp two week fall some sort of consolidation is to be expected. Looks like we have had a very short consolidation.  Longer term trend for stocks = Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rose a tiny +2.16% yesterday.  An 8 week bull run, then a two week fall, now pushing higher. Could be return to bullish trend. Another day or two of positive gains would turn this index’s trend bullish But for now = Neutral
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.]   Rose to +14.96. Still lots of room to move higher or lower. Location= NEUTRAL

Reading Tea Leaves

The vast majority of stocks/ETF’s move with the markets. Here’s what to look for while Investors411 is on hiatus. The comments section is still open.

• Same guidelines on the MO. But we are no where near overbought. so still room for bulls to run.
• Check out the movements on the dollar. If bears continue to rule stocks will go up. However if this fall turns into a crash & burn we are all in trouble.
• For rally – Benchmark S&P 500 has resistance at 1170 and major resistance at 1220. For reversal support level around 1130. We’ve already tested this level and its held.
• The bulls are running right now.

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) 2% trailing stop loss on 50% of position/ 4% trailing stop/loss on the rest.
• USO (price of oil/commodity).
• SSO (2x what S&P does- this ETF is more a trade that may turn into an investment) I now have a 2%trailing stop on 1/2 this trade and a 4% on the rest.
• TYH (3X technology) 2% trailing stop on this ETF. for today.

Obviously choosing just one or two stocks to invest in has lots of risk. Example AAPL drop at open yesterday (see comments section of blog) or GMCR 10+% drop in after hours trading.

Each YOUR Stock List’s had over a dozen choices.  Diversity is a key word in investing. So a less risky investment would be 1/2 or more of a group of stocks.  This also is exactly what an ETF does.

Your can make great gains as we did with IMAX earlier this year (up 65+% at high), but its safer to hold ten stocks, even if they are more volitive or high growth stocks that you folks seem to choose for YOUR stock list.

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Fresh Face for the Old Guard Corporations

Jobs/Candidates/Corporate Interests

Three of you in the comments section of the blog are aghast at the nomination of Republican Tea Party’s Christine O’Donnell in Delaware. You can see her lack of  qualifications on Wikipedia. Other sources are a lot harsher.

She is a far right religious person [masturbation = adultery]  a Perky Pretty Palin, & most important she has backing from the major corporations/industry groups that dominate America.

Bottom Line - There are perhaps a half dozen major old guard industry groups that are focused on one thing – profits. They use scaling and create their jobs abroad instead of at home. These giant companies gobble up smaller ones then (think Gordon Geko) then decimate the jobs of the acquired smaller company to make greater profits. Even the smaller companies in an industry group devour the start ups and diminishing their work force is a top priority. That’s the giant jobs eating food chain for America’s old guard globalized corporations.

O’donnell is perfect for Wall Street. perfect for the Koch Brothers (& other wealthy oligarchs) that finance the Tea Party, Perfect for the old guard major corporations. Perfect for religious groups & others manipulated by fear. But devastating for the job starved middle class.

Jobs/ Helping Small Business

Two Republicans broke ranks and voted with Democrats to break Republican Senate filibuster that was against helping small business. House should vote on this today or tomorrow.

“would create a $30 billion fund that the government would invest in independent community banks to encourage lending to small firms.

It would also exclude from taxes all capital gains on sales of small-business stock, and ease tax rules for expending and depreciating equipment. Tax breaks in the bill total $12 billion.” Source ultra right wing CNBC

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!

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Technicals, Fundamentals & Analysis

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

Mantra for September - “The Black Box/High Frequency Traders BB/HFT control the majority of trades. Jim Cramer -”BB/HFT make up 80% of trades.”

Term for the Day – McClellan Index/Oscillator - From Investopedia (don’t worry if you do not understand what they are saying. EMA = Exponential Moving Average an adjusted daily moving average of price) -

“A market breadth indicator that is based on the difference between the number of advancing and declining issues on the NYSE. It is primarily used for short and intermediate term trading.

To calculate subtract a 39 day EMA (of advancing issues – declining issues) from a 19 day EMA (of advancing issues – declining issues).”

Investors411 uses this Oscillator because it is broad based & does NOT include volume. If you look at  the MO chart below, you’ll find a strong correlation between +60 and above showing markets overbought and -60 and below showing markets oversold. These are often the starting points for rallies or declines that last for weeks and sometimes months. Compare with the rises and fall of major US indexes. The MO works differently in different kinds of markets (bear, neutral, bull) so it needs tweaking and the +/- 60 are numbers not written in sand,

US Markets - From financial channel Volume is down 30% relative to last year on major US stock indexes. Volume no longer a decent forecasting tool for major US indexes.

Forex dominates (see yesterday’s term of the day) today’s trading. Bank of Japan yesterday dumped billions into their currency in hopes that the Yen would depreciate.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar, rose  +0.43% yesterday.   For stocks trend is still =Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Fell a  -3.40% yesterday.  The BDI does not have the immediate impact that the MO or Dollar does. Third down day in a row with rate of fall increasing. If this continues BDI bullish trouble Right now longer term chart pattern Bullish/Neutral
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO fell to +38.99 yesterday. Very unusual NYSE rose =0.25% yet the MO fell a minor 14%. Trend is moving lower and indicator is = NEUTRAL

Reading Tea Leaves

Dollar market and Japan’s intervention for the first time in six years is what’s got traders attention. Japan an exporting country has watched the Yen (their currency) go up in price making their goods cost less. Governments around the world including our Fed (Permanent Open Market Operations) are all trying to manipulate their currencies so their goods cost less and their exporters sell more.  Is this the start of a trade war?  If so, China is way ahead in currency manipulations.

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)

Current positions –  EWS (Singapore).

Trend is clearly bullish for stocks. If we can get the MO down to @ +20 (@a 100 point drop in Dow) and you can tolerate risk you could nibble. Also, of course, we get up over +60 on the MO and  a rise in the Dow/major indexes, that would be a selling or shorting point for those that can tolerate the risk. (see past Investors411)

Their are obviously safer entry/exit points, but that’s where the tea leaves tell me to start.

Long Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Lots of you think of GW Bush like this but…

George Bush The Hero

Troubled Asset Relief Program (TARP) Treasury Secretary under BUSH Hank Paulson and Fed Chair Ben Bernanke sold Congress on the $700 billion insurance plan to save shadow banks. Phase 2 was carried out under OBAMA & his Treasury Secretary  Geithner

From screamers - Tea Party Patriots on the Right to Rachel Madow on the left the TARP gets bashed. Even Democrats run & hide when the TARP is brought up.

Yes it was a bait and switch by Paulson, yes it kept the shadows in business, And yes some fat cat CEO’s got fatter because of it (lots of blame to retiring Senator  Dem. Chris Dodd on the last point).

The Bottom Line – Simply a second great depression was averted. Lehman collapsed and if the other dozen or so major investment firms had fallen along with AIG, GE, GM (also add any other worldwide companies that had over leveraged positions) it would have started the dominos of panic and we’d be seeing unemployment at way over double what it is today. Imagine a dozen firms all bigger than Lehman’s going belly up and the other mega banks failing throughout the world. Add media hype. Result Great Depression #2

Story on this from Politico’s Ben Smith – TARP A Success None Dare Mention

FYI on TARP – From Wikipedia “as of April 12, 2010, is down to $89 billion, which is 42% less than the taxpayers’ cost of the Savings and loan crisis of the late 1980s.”

Postscript – 33 Hero Democrats in May of 2010 voted to break up those too big to fail shadow banks. 61 Republican & Democrat caved into the shadow financial institutions and their lobbyist.

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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!

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Technicals, Fundamentals & Analysis

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

Mantra for September - ”The Black Box/High Frequency Traders BB/HFT control the majority of trades. Jim Cramer -”BB/HFT make up 80% of trades.”

Term for the Day – High Frequency Trades - From Investopedia – “High frequency trading is an automated trading platform used by large investment banks, hedge funds and institutional investors which utilizes powerful computers to transact a large number of orders at extremely high speeds. These high frequency trading platforms allow traders to execute millions of orders and scan multiple markets and exchanges in a matter of seconds, thus giving the institutions that use the platforms a huge advantage in the open market.”

US Markets – Ended up flat in what passes now for moderate/average volume. Much less than in the past because retail investors have been exiting stock and trading is dominated by HFT’s.

Brokerages, Mutual Funds & Platforms that cater to individual or small groups of investors/traders are seeing profits diminish as retail investors continue to leave stocks.

Holding onto gains is usually a bullish sign after a major rally day. But there was a divergence in the normal relationship between the dollar and stocks that have been moving in almost 100% different directions since July. The dollar took another big hit and stocks instead of moving higher were flat. (more below)

Gold like Silver last week broke out to new highs. Mea Culpa – Investors411 talked many times about buying GLD on dips but never did.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar, fell ANOTHER HUGE -1.01% yesterday.  Dollar at 81.08 and has a another major support level at just below $80. For stocks =Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Fell a  -1.21% yesterday.  The BDI does not have the immediate impact that the MO or Dollar does. Two relatively minor down days in a row. Right now longer term chart pattern still = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO fell to +45.56 yesterday. Back to = NEUTRAL

Reading Tea Leaves

We may have missed at least a short term selling or shorting opportunity. We had the MO at +61 & the Dow climbed another +60 points in to the the AM. (just short of the +100 criteria) Investor411 has only one small long position in EWS, so I took no action in the 411 account.

The Baby Bull is still alive. But…

There has been a key divergence. The dollar is in meltdown vs. other currencies. From yesterday on the dollar  “one ugly bearish chart” This dollar meltdown should have been good news for stocks. Stocks should have rallied. But they stayed flat & the MO dropped 16 points. Sometimes it takes a day for stocks to react, but, for right now, overbought stocks went nowhere despite good news in a falling dollar.

This could signal at least a short term top.

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)

Current positions –  EWS (Singapore).

EEM (the major ETF for emerging markets) is overextended from 50 DMA. So are other breakout countries. It would be natural to see some sort of consolidation.

Along with the Baby Bull the upgrade to CAUTIOUSLY BULLISH is not yet firmly in place. We still could fall back to neutral.

Here’s the test – The MO falls to about zero or +20 and stocks rally from that point.

I’d be willing to invest/risk a bit more then. Yes its not -60 on the MO – a better entry point, but emerging markets & a falling dollar are pulling US equities along for the ride. A consolidation after a run is not to be feared. Also time to start looking at YOUR stock list

Long Term Outlook – CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Koch Brothers

Buy/Rent Calculator

The NYT has an interactive Buy/Rent calculator for those making this decision. Of course the hard part is adjusting what future housing and rental costs will be.

Follow the Money

Every Sunday Frank Rich has a column in the NYT and more often than not its a home run. You know the front people behind the Tea Party and other right wing groups but the billionaires (Murdoch and the Koch Brothers & more) that fund or run the show are the real power brokers. Follow the Money

Here’s a quote from Rich of just what the Koch Brothers believe - “They haven’t changed.” David Koch ran against Ronald Reagan on this platform in 1980 -

“his campaign called for the abolition not just of Social Security, federal regulatory agencies and welfare but also of the F.B.I., the C.I.A., and public schools — in other words, any government enterprise that would either inhibit his business profits or increase his taxes.”

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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!

Technicals, Fundamentals & Analysis

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

I realize that the vast majority of you want to know just if its safer to buy now and what areas to buy. A lot of the below material just makes your eyes glaze over and is techno speak. On the Positions Section of blog there are a list of potential ETF’s that should outperform the benchmark S&P 500. Generally,  The time to buy is on dips when the MO (see below) gets to -60 or below.

Investors411 want YOU to be a better trader or investor. The primary goal is to educate YOU. If you skim the below, you’ll see the major empahasis is on the massive currency/dollar market that, right now,  is walking stocks like you walk your dog on a leash.

Mantra for the month - The Black Box/High Frequency Traders BB/HFT control the majority of trades. Popular financial channel host Jim Cramer said last Friday – “BB/HFT make up 80% of trades.”

We had volume behind Friday’s big rally. Don’t have the faith in volume as an indicator for major indexes because of BB/HFT’s. Volume does have some more credibility when it comes to individual smaller stocks.

More importantly we had a falling dollar that has had trouble breaking through the falling resistance level (see $USO below). That’s where the action is. Dollar falls = stocks go up and visa versa. From  the BB/HFT’s to Central Banks to worldwide oil barons all play the massive currency markets and try to manipulate it to their advantage.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar fell a marginal -0.02%. Chart show falling 50DMA is a strong resistance level. Breaking down or up through it is the key for US stocks. = Neutral
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rose a marginal +o.33% Friday. This gives some stability to the 5 week long rally after two down days in a row. 5 week rally trend is still in place, but not entirely back on track = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose  to -15.64 . This was a massive, almost +45 point move. If this move continues it could flame out real fast. Nevertheless, our #1 Buy sell Indicator is back at = NEUTRAL

Reading Tea Leaves

From Friday – “When fear is at its greatest – that’s the time to buy. Have we reached that point…Personally, I’m torn. There’s so much investment fear out there – Am I letting it cloud the facts?”  Answer – YES – We had an oversold bounce Friday that could continue for a few day or longer.

Friday I gave you all the reasons for an oversold rally, yet failed to take full advantage of it. That’s me in the doghouse with traders.

INVESTORS – The conditions were marginal, but still NOT good enough to nibble. If you like you can always do “in the money” coverd calls or invest in high dividend stocks to mitigate risk. A good time to buy these is when stocks are oversold instead of overbought.

CAUTION – This is a NEUTRAL market and ideally you’d like oversold conditions to exist in a BULLISH market. That’s why Investors411 is being cautious.

Still think there is a better than 50/50 chance of markets falling to/or testing this year’s lows - SPX 1020

UUP remains the ETF to watch because it tracks the dollar.  Yes, we had an oversold bounce and it could continue. But if the dollar breaks through its resistance & moves higher (see above on $USD) stocks will roast and toast.

Positions

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

Current positions - Small positions in EWS (Singapore) USO (commodity-Oil) & TYH

Traders - Bought TYH (3X technology ETF) again at 24.98 Friday. A smaller position than last time (5% of portfolio) because the conditions were not as good.

Reasoning – I should have bought it at the open when stocks dropped @70 points, but I was waiting for a 100+ point drop. When stocks moved higher than their open in basically oversold conditions (see MO for Friday) I bought the first dip. I did Not buy as much as before because the conditions were not as oversold. (also UUP was flat)

Holding TYH overnight is always a risk & other factors.

• The rebalance the TYH to more accurately reflect its positions & I do not have a super computer(s) to figure out if its out of whack like the BB/HFT’s do
• A single event can cause the TYH to more dramatically by the next open. We are talking about an ETF that does 3X what the tech stocks do.
• One reason I have the ability to trade this, is that I have the one of the financial channels on in the background as I work and can watch the market move.

Same philosophy applies. Have moved stops up to 1 below what it was bought for & and will take 3% to 5%% profits on 1/2 of TYH, hopefully today. Conditions not appropriate for any other buys.

INVESTORS - I know you’re frustrated & would like something to buy and hold. The good news is USO & EWS are both in the black, but haven’t reached the @5% profit level  where you can sell 1/2 and let the rest ride.

Long Term Outlook - NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Photo from Politico of all white Tea Party activists – Queston should the USA have the same level of tolerance as Saudi Arabia or are we better than that?

Your Comments

Mainstream media (CNN & others)has chosen to give priority to right wing groups that believe we should ban all  mosques in the USA. Yankee Bob has returned to the comments section with a rebuttal -

“Exactly right!

Fear is the Mind Killer! Prejudice is born of ignorance! We fear that which we do not know or understand! Enlightenment is much harder to attain. It’s easy to be afraid of what you don’t know or understand. That’s easy. Seeking the truth is hard!

Think of what prejudice has cost the world. How many Genocides? How many victims of Genocides, Enslavements, Victims of Prejudice  were denied their human rights. What does that mean as a social cost? Suppose Einstein had been murdered  in  a Pogrom before he gave the world his Theories. Suppose he had been denied his eduction because of a quota on student seats for Jews! How many potential Einstein’s were lost at Auswitz? Suppose Drs. Salk were denied becoming Drs because they were Jewish! The Dr that developed the procedure for blood transfusions that has saved the lives of countless millions,died after being in a car crash and was denied a transfusion because he was Black! What if he was in that crash before he developed his discovery. We have lost so much as a society because of the fear that ignorance inspires!”

Yankee Bob

JS has a lot more valuable information on covered calls in the comments section. Also Dave & Jim J (bonds) have some added information Kudos to JS for initiating and leading the discussion on an alternative method of investment

If you don’t watch the comments section each day your missing out on some of the best investment ideas and most passionate editorials.

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!

Technicals, Fundamentals & Analysis

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

Mantra for the month - The Black Box/High Frequency Traders BB/HFT control the majority of trades. Paul R in the comments section has found a great source describing the BB/HFT traders and consequences of what they do.

Weak volume rally is typical US for the BB/HFT.  Although volume did pick up a bit as short positions scrambled to cover. Weaker dollar & rally abroad played a part in this.

NB – The US markets are , for the most part are being engineered by the BB/HFT and now the Fed has taken an even more direct role. Investors411 has beat the drum over the BB/HFT’s, so lets do the FED.

The FED – It was perhaps no accident markets moved higher when the Fed at 10:15 AM EST yesterday opened its window to start to buy Treasuries. Lower treasury rates pushes investors seeking higher yields into stocks. More important Zerohedge.com does a good job describing what happens when cash is given to potential traders. Future auction that inject cash to major traders will occur 8/19,24,26 & 9/1. So stocks should have an artificial boost on those days. At Zerohedge read anything with symbol POMO – Permanent Open Market Operation.

Bottom Line - You’re not getting the Fed’s money and we could see a little juice added to stock on the above dates. Plus the day before traders may rally in anticipation of new cash.

Cash rich companies are also buying back shares – they certainly are NOT hiring American workers.

Significant Indexes

• The Dollar (USD)  [Anything price move over +/- 0.50 is significant] The dollar fell -0.38% yesterday. For stocks = Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade/proxie for China & emerging markets] Rally +1.09% yesterday. Has broken up through 50 day moving average. Overall trend still = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose to +3.14 = Neutral

Reading Tea Leaves

Emerging markets due for a consolidation after a nice 3/4 day run. MO in neural and the FED injections of cash through 9/1 should keep the nasty Hindenberg Omen at bay at least for a while.

Positions

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

Current positions – EWZ & EWS

Each time we have a MO below 40 and a dip, I plan to buy.  First nibbles and the lower we go the more riskier ETF’s.

Same strategy – Will sell 1/2 ETF at @3 to 5% gain/loss and let the rest ride till the MO moves higher. Sold 1/2 of EWZ at 70.88 for @ +3% gain. Both EWZ & EWS opened and closed near the same levels. In the language of technical analysis this usually means at least a short term trend reversal.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

-

Hottest 6 Months Ever

The last 6 months have been the hottest ever on the planet. The record breaking heat waves of the East Coast are part of this

“The record temperatures we’re seeing now are especially impressive because we’ve been in “the deepest solar minimum in nearly a century.” It now appears to be over.”

This NASA news should have been the headline of every major paper. Instead the top link I found was the following minor site. If you want some science data on greenhouse gasses, global warming & how it works see National Reasearch Council of National Acadamy of Sciences

Alternative you can laugh with the Drudge Report or Fox News when they headline a goup of climatologists meet and it snows. Or read when they healine a couple climatologist who have seemingly fudged data, but are later exonerted. They, of course ignore or bury the NASA data.

“We’re getting a dramatic taste of the kind of weather we are on course to bequeath to our grandchildren,” says Tom Peterson, Chief Scientist for NOAA’s National Climatic Data Center.”

Reboot America

16 of America’s Leading Economists/Historians have come together to fight the Tea Party/Fox/CNBC/ Libmbaugh/Bachmann/Palin (Thanks to Popeye for his Bachmann comment) message of cut the deficit NOW. They realize that Jobs is the #1 priority NOW.  Their conclusion-

The urgent need is for government to replace the lost purchasing power of the unemployed and their families and to employ other tax-cut and spending programs to boost demand. Making deficit reduction the first target, without addressing the chronic underlying deficiency of demand, is exactly the error of the 1930s. It will prolong the great recession, harm the social cohesion of the country, and continue inflicting unnecessary hardship on millions of Americans

Obama’s Address

Republican’s have been blocking aid to small business and unemployment compensation for weeks. Here’s Obama’s weekly address.

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

Economic fundamentals, some bad earnings report, and an options expiration Friday seemed to have made the Black Box/High Frequency Traders dive for cover.

Volume was a bit above average for the older DOW & S&P 500. Still it was NOT the kind of volume you’d associate with a major stock meltdown, but more the kind of volume you’d expect when options expire (The 3rd Friday of the month) Translation – Black Box traders clearly in charge of markets.

Almost 3% decline – Bearish

Earning come out big time week.

You can check pre market trading here – Just type in ticker symbol

Significant Indexes-

• McClellan Oscillator (MO) fell to +7.53 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. = NEUTRAL
• US Dollar –  The dollar Friday was basically flat -0.09% [Anything over +/- @0.50 is significant.] The dollar is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, have used the inverse relationship of the dollar as a key part of their trading system. This inverse relationship is part of their algorithmic system. There was a delayed reaction the last time the dollar fell over 1.00% – The next day we had an almost 3% rise in stocks.  For stocks =BULLISH
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also good proxy of China.) BDI is in free fall from a high of @4200 to 1700 yesterday. This is a huge -60% drop 8 weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI rose for the first time in 8 weeks Friday +1.18% yesterday. At long last the BDI finding a bottom – a bullish sign, but too early to tell. Fundamentally the -60% drop is very BEARISH

Reading Tea Leaves - I haven’t figured out the algorithms associated with High Frequency Trading. So its near impossible to make an accurate predictions of what they will do. However the majority do seem generally to follow the basic +/- 60 indicator on the MO.

Answering The Critic - (see comments section of blog)

• The Good – Yea with a little luck did call the top and the last bottom. This came about by using both the meltdown in the BDI and MO reaching oversold.
• The Bad – Why not invest more? I did set up a probable group of trades (short ETF’s) if the major indexes became more oversold Wednesday and/or Thursday.  Bottom Line – Its not the old time stock market any more. – Phony capitalism rules along with High Frequency Trades. Those ETF’s you mentioned are impacted by phony capitalism and HFT’s so you have to be more cautious. My trades tend to be more conservative (example SH last week instead of SDS) YOU can be more aggressive.
• The Ugly – Fixing High Frequency trades (or phony capitalism) Most of the trades in the 1000 point meltdown were cancelled. However HFT and phony capitalism (example-shadow banks) banks are a reality. In the USA (the leading GDP capitalist country), if the moneyed class keeps getting richer and the middle class poorer market fundamentals will continue to deteriorate.

Positions

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

Updated over weekends Investors411 holds ONE position at this time

SH – The ETF that shorts the S&P 500 was bought at 51.45. It’s up over 3% now. 1/2 will be sold at 3% profit and a stop/loss has been put in place at what it was bought for.

I’m not so sure Friday’s meltdown was as bad as it looks. It may have been something exaggerate by HFT and Options experation.

No other positions long or short are contimplated in immediate future because MO is neutral.

What in a mirror? A vase, A slave, Your soul?

Wall Street Killing America’s Soul

Paul R has referenced an excellent piece by Paul B Farrell in the comments section of the blog. It’s exactly what Yankee Bob talks about (again in comments section) when he states-

No matter how small or logically challenged the Tea Partiers are they are invaluable to Corporate Capitalism. [I call it "casino capitalism"] It gives the major players and shakers a human face to spread their poisonous agenda . It’s like interviewing a slave that believes they are being well treated by their master so why don’t you become one too.

You should check out Farrell’s entire editorial, but let’s look at the “hyperspeed, toxic irrationality… of Wall Street (“Corporate capitalism” or “casino capitalism”). Farrell from Market Watch –

• All Wall Street bankers are worth 100 times any Main Street investor
• All Corporate American CEOs deserve to make 400 times their workers
• All children of all Forbes 400 billionaires deserve to inherit tax-free
• All lobbyists deserve millions when winning billions for special interests
• All taxpayers should pay for catastrophic mistakes of Wall Street Fat Cats
• All rich hedge fund managers deserve to be taxed at capital gains rates
• All senators deserve to become millionaire lobbyists when they retire
• And Goldman Sachs CEO Lloyd Blankfein deserves a $100 million bonus

This is the reality we live in – A reality that creates the deficits that John S, Me and even the TTP’s are outraged over. Yankee Bob understands that so many perhaps unaware slaves (the TTP’s) to the system that privatizes gains, socializes losses & creates deficits. Jim J. rightly concludes that we don’t want “less government,” but “Effective Government.”

Bottom Line – What will you do? Just keep staring in the mirror or take action.

The General & The President

Headline news around the US is about the Rolling Stone article The Runaway General. Will General McChrystal get fired or hand in his resignation for insubordinate remarks (he’s apologized) he and his staff made about Obama and his administration.  Tom Friedman’s view

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

Analysis of stocks has become an analysis of what the “Black Boxes“,of  huge institutions with their high frequency trades & computer algorithms are doing. Their focus ,now, is on the huge currency trading markets.

Fed makes interest rates announcement today.

YOUR Questions

From private emails and public comments lets go over four aspects-

• The BDI – I brought back the BDI Index because it was reaching a critical mass. This measurement of world trade had fallen so far and is close to a major support level that the fundamentals (trade) factors it represent were too big for even the Black Boxes to ignore.
• The MO – It’s not a magic bullet. But it does show you when the odds are in your favor to make a trade. There are many similar Indexes, but this one was chosen because it does NOT use stock volume. Volume has become less relevant because the “Black Box Computers” have taken over trading.
• This is NOT your parents buy and hold market. The USA shadow financial corporations are running an opaque unregulated banking system. We have a congress and & administration that is unable or unwilling to balance the system so YOU have the same advantages as (as Yankee Bob would put it) your corporate masters.
• Because of point 3, everything is more opaque & more volatile. Emotionalism, fear, and irrationality make owning most stocks far more risky than in the past. Example, Right now the BDI besides loosing 40% is close to breaking down. A breakdown here greatly increases the chances of a second major recession on top of the first.

Significant Indexes

• McClellan Oscillator (MO) fell significantly to +1.01 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. NEUTRAL
• US Dollar –  The dollar rose yesterday +0.13% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Dollar up = stocks down and visa versa. This was the first two up days in a row for the last 13 sessions. Yesterday confirmed the previous days more significant move. For stocks =Bearish
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped. BDI is in free fall from @4200 to  2547 yesterday. This is a huge -39% drop in 5+ weeks.  Often a leading indicator for stocks. Now at/ just above a support level. Rate of fall declined yesterday. This index often makes slow changes, so diminished decline (@40% less) could be the start of a reversal. However, clearly long term  = Bearish

Reading the Tea Leaves-

Apple computer seems to be single handedly keeping this market afloat. It’s one of the stocks on YOUR Stock List. However, emerging markets especially China is still the key to worldwide growth.

The mantra continues to be watch FXE (EURO currency ETF) and UUP (US currency ETF)

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekend

Have not yet had a chance to Update over last weekend but there are NO positions held at this time

DGP is ETF that is double long gold. Investors411 plans to buy the dip in this ETF.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Apologies to some of you who are trying to post comments as “guests” – It’s NOT working and  only “registered users” are able to make comments. Trying to work this out.

Tea Party Patriots

Reality is that Tea Party Patriots and like groups are a major force in the USA and many of YOU have commented on their right wing radicalism, racism, and rage. NYT’s Frank Rich & Talking Points Memo . The TPP hero’s have taking some truly radical views defending BP.

• Rand Paul defending BP wanting Obama to leave them alone.
• Joe Barton (Republican chair of energy committee in congress) calling the $20 billion Obama got from BP a “shakedown.” He later apologized.
• IBD (Investors Business Daily - “Rallied to  his(Barton’s) support.”), Rush Limbaugh (“the $20 billion would go to ACORN”) Republican Study Committee = “A Chicago style Shakedown.”

To the TPP’s everything is the fault of a big monster government. So much so that they would rather see YOU pay for BP disaster.

Just what is does our government do – Primarily writes checks to seniors (social security & medicare) and fight wars. (65% of federal budget and growing) Just who elected our democratic government  (20 of the last 30 years Republican Presidents)we did. Yet the TTP’s rage against government they elected as the source of their problems  - You self indulgent, arrogant  IDIOTS – the problems we have are our own making -our own fault. Take responsibility.

TPP’s are all wrapped up in sensationalism from Palin’s “drill baby drill,” to their “don’t tread in me” banner. When the TPP’s heros take a position on BP you find out just how dangerous they would be. Do NOT ignore these people.

China Revaluation

Stocks all over the world are up on news that China is loosing currency restrictions. This avoids or lessens the tensions a potential trade war with the USA. It’s a long sought goal of US foreign relations and a feather in Geithner/Obama’s cap.

If you combine this with Obama getting $20 billion from BP you could say he’s having a good week. (more on tis below)

However, no matter on how tough Obama got with China & BP his lack of support for substantive regulatory reform on the too big to fail shadow banks is a major disappointment

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

Friday was one of the most boring options expiration days ever. Usually a Quadruple witching day/options expiring means a HUGE amount of trades and a volatile market.

BIG story over weekend is China Yuan/currency has moved to a 21 month high. Bush & Obama have been pushing the Chinese to deleverage their currency from the dollar.  Looks like Obama, time & a win win situation finally moved the Chinese. Since the “Black Boxes”(see Thursday’s update) that make up 80% of the trading are fixated on a falling dollar this is going to give bulls a shot of adrenaline today = BULLISH

BDI in freefall. At some point the Black Boxes (Huge computers of Huge institutions that make up 80% of all trades) are going to notice the BDI whichis a proxy for world trade. World trade is Slowing and the  first impacted are highest exporters like China, Germany, etc.= Bearish

Fearless Forecast Last Week = “Rally Ho” We held onto gains made early in week.

Fearless Forecast This Week = Rally Ho Again – China news is extremely bullish and this surprise should boost markets above +80 on the MO scale. Conditions should be getting very oversold by the later 1/2 of week. So expect the rally to dip or flatten then.

The China news is a significant positive surprise. After years of just talking the Obama administration has got China to move. Unfortunately the news has caught us with just a small stake in equities, so we’ll miss out on what should be a big jump this AM in equities.

Significant Indexes

• McClellan Oscillator fell to +50.47 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. Just below overbought territory = moderately overbought = moderately bearish
• US Dollar –  The dollar continued its fall Friday -0.10% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. The dollar seems destine to fall to its 50 day moving average which is $1.06 lower and rising. = Bullish
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped is in free fall from @ 4200 to @ 2700 Friday. The China news could impact this index today Often a lagging indicator, but clearly long term  = Bearish

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekend

Have not yet had a chance to Update over weekend.

High beta stocks (See YOUR watch list) and high beta ETF’s (see past Investors411) going to do well early this week on China news. Could be a good short term buy the dip play here. Be careful that your choice is NOT too overextended from/above its 50 Day moving average.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING