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The Winter Democracy Bloomed

The desire for self government, jobs and bread has exploded across the Arab world. In over a dozen countries people are demonstrating for basic human rights. Perhaps the biggest looser in all of this is Islamic fundamentalism and al Qaeda, because the cries of the people are not for religious fundamentalism, but for the common human dignity that we all share. Demonstrators are putting their lives on the line for democracy.

Libya and Iraq are the latest to have demonstrations. Today the NYT focuses on American reaction to Egypt, Bahrain and Iran’s demonstrations

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Shadow Banks Rule

The Chamber of Commerce and Shadow Banks were caught with their hands in the cookie jar,  just as a congressional committee was to convene to amend rules on “casino capitalism.”  How ironic it is that over a 1000 bankers were issued jail terms in the Savings and Loans crisis decades ago and NONE have over the 2008 meltdown.  That’s how powerful the shadows and their lobbyists have become.

Andrew Ross Sorkin from NYT story and MIT prof Simon Johnson. – Derivatives Industry Report Collapses.

But that’s just for openers – The Chamber of Commerce & their shadow allies are not beyond investigating the families of critics and printing false accusations. If you support Wikileaks or speak out against The Chamber, BAC or those who want to run capitalism in the shadows this could happen to you. Glenn Greenwald reports.

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 Analysis

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

Nothing’s change much in overall outlook since Monday. Short term because yesterday’s moderate loss the McClellan Index is at a  more buyable level of  +6.97. But not yet near levels bulls would like. The bubble-icious stock market continues.

So today were going to focus on technical analysis. I call technical analysis looking at the pretty pictures/charts of  a stock’s price and volume and being able to make a forecast of future directions from those charts.

Stockcharts.com, the best free site on technical analysis on the web has a school/tutorial that will help you learn more about it.

Technical analysis works best when the markets, the sector and then the individual stock are in alignment or moving in the same direction.  The sum is greater than the parts, but in most cases it the individual stocks that matters most.

So here’s a list compiled by Paul R who has oodles of experience in technical analysis and uses a powerful HSGI program to augment his technical analysis skills.

Below is Your Stock List #3 and Paul’s recommendations. Most importantly use this a a learning  tool it technical analysis. He published it in the comments section of the blog a day ago, so its a bit dated and I’m sure he wants you to read his mea culpa. You can look up each chart pattern by inserting appropriate ticker symbol at Stockcharts.com. (link above) - His comments in Green and technical analysis below.

“In no way am I recommending a buy or sell of any of these stocks. These comments are for education only. (Understand?)

BIDU – getting extended, a hold and not a buy at the moment.

NFLX – getting extended, a hold and not a buy at the moment.

BEXP – went through a buy the dip correction in late January. Broken out, buy if it dips.

JNPR – leader in it’s group, broken out from a strong base, extended now, buy if it dips.

SKWS - Good chart, extended, buy the future dip.

KSU - Good chart, extended, buy the future dip.

DECK – Gone through a correction as has it’s group, buy the future dip.

PCLN - good chart, buy any dip

COH – Gone through a correction as has it’s group, buy the future dip

IMAX – basing, buy any dip if you want as long as if it’s above the 50.

SOHU – broken out, way too extended for my stomach. Not a good chart, it needs to tighten up.

IVN – basing, buy at any time at current chart position

ALV – basing along with it’s group at the moment. NOT buyable at the moment.

SAM – basing, sitting on the 50, buyable at any time

SPRD – Good chart, wee bit extended, wait until it touches the 17 dma again.

FFIV – NOT buyable at the moment, chart needs some serious work.

These observations are just that, observations. My observations are usually worthless. If you buy any of these dogs…blah blah blah. Did I mention these comments are for education only? Pay attention for crying out loud!”

An additional comment from Paul on how to Buy the Dip

Always watch the comments section for different ideas and comments on stocks, economics, trends and politics.

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Positions

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Look for Paul R‘s always enlightening remarks on stocks and sectors in the comments section of the blog. See ”POSITION“ section of blog (at top of page) for lists of potential stocks & ETF’s including “YOUR Stock List.” (YSL#4 is under construction.)

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Looking at  pretty pictures – reference below *

Drawing by 8 year old granddaughter Emma

The Glamor of Greed

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Andrew “Andy” Grove,

Andy Grove the co founder of Intel uses a different title than The Glamor (profitability) of Greed. This former CEO calls his editorial “How to Make an American Job Before It’s Too Late” Grove uses the same megatrends Investors411 uses.

His editorial is a well researched, clear, outlined and offers a job centric solution. Here are some major points. [Many thanks to Robert Howetser who is a sometimes contributor to the comment section of blog and brought this editorial to my attention.]

• The Bay Area in SF (Silicon Valley), the innovative machine of the country hasn’t been creating jobs in the USA lately. It has a higher unemployment rate than the rest of the country.
• The scaling process is no longer happening in the US And as long as that’s the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs.
• From Apple to Dell computer there is a 10 to 1 jobs ratio for former (Silicon Valley) high tech jobs in China vs. the USA. The largest of these is Foxconn ($62 billion in revenues – makes and assembles for Apple, Dell, etc.) and employs more people than the combined worldwide head count of Apple, Dell, Microsoft, Hewlett-Packard Co., Intel and Sony Corp combined.

Without bringing scaling back to the USA, American companies are going to continue to make profits by shifting jobs abroad. –  That why Grove is calling for a jobs centric government.

“We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars — fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations…”

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

Mantra for week - Fundamentals rule. Old fashion fundamental earnings analysis dominates as earnings season kicks off big time next week. “Double dip recession” has become an investment mantra starting in Europe and now echos worldwide.

Technically the benchmark S&P 500 is down 9 of the last 10 trading days and way overdue for at least a  technical short term rally. = Bullish

The BDI See below) is still in free fall (-47% see below) clear evidence of worldwide economic  (trading) meltdown. = Bearish

Pre market trading in Europe & China is way up @2% (as of  8:00 AM EST)Those of you who took Friday’s read of the tea leaves to heart (you had to love risk) and bought as markets dipped at close – should at least be rewarded in the short term this AM. = Bullish.

*Looking at Pretty Pictures-

Technical analysis is looking at pretty pictures or patterns of stock charts. None quite as wonderful as a grandfather’s view of his 8 year old granddaughter’s work. Who knows why technical analysis works? Perhaps

• We are all creatures of habits, and the trading herd follows patterns
• So many folks think it works and therefore it does.
• We all like to look at pretty pictures.

The bottom line – Investors411 on the right side of the blog offers different financial  charts. Also daily updates on certain charts in text of blog each day.  Those charts on the right side of the major US indexes all show one pattern – a series of lower lows and lower highs for stock prices that started on April 23 2010. If you’re a Bear you love this pattern.

We are currently in one of the lower lows of this pattern.

Fearless Forecast for the Week-

Some kind of technical rebound seems inevitable. If it doesn’t last at least couple of days we’re in big trouble. Some poor earnings results may already be built into stock prices. The accelerating downside of the BDI is a gathering storm. What to watch for is how the markets react to the first few earnings reports. How markets react to news is usually our #2 indicator (see STRATEGY Section on top of blog)

Best read of tea leaves - Good start poor finish = down week.

Significant Indexes –

There’s hundreds of charts, oscillators, systems out there to measure trading patterns and flows. The BDI & MO were chosen because they work extremely well right now for different reasons. (Click on STRATEGY section at top of blog for more) The dollar accuracy as a forecasting tool was shaken last week. If it’s accuracy rebound’s Investors411 will continue to use it.

• McClellan Oscillator (MO) fell a we bit to -53.38 [+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. In May the MO reached two lows – one at -120 and the other close to -130. Therefore, potential for more downside risk. Even after last week’s disaster for stock the MO is still NOT below -60.= Still NEUTRAL, but almost oversold
• US Dollar –  The dollar rose a bit +0.19% Friday [Anything over +/- @0.50 is significant.]  Mantra - right now is important  to stocks – Dollar up = stocks down and visa versa. The Black Box traders, that make up 80% of all trades, have used the inverse relationship of the dollar as a key part of their trading system. Last week this got crushed by bad fundamental news as regular investors fled the market. Dollar flat last two days. = Neutral
• 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  2216 yesterday.( This is a huge -47% drop in 6+ weeks.  Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI fell -2.81% Friday. Rate of decline increasing as it nears support level. Looks like support level will get crushed today =Bearish

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own – Updated over weekends – Investors411 holds NO POSTIONS at this time.

Shoudda, Wouldda, Couldda -

Last Friday Investors411 reccommmended a buy if markets dippped for those willing to take risks. It does look like this trade is going to make $ at the open and perhaps throughout the day. More tomorrow.

Long Term Outlook =CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING