The Face of a Terrorist

The Daily Beast/Newsweek is featuring a story on the “rise of right wing extremism could spur violent attacks” warned by Homeland Security in 2009. (story by Aaron Mehta)

Some Facts About the USA

• In 2007 there were 47 active militia groups in USA. In 2009 127 (source Atlantic pg 72 & 73 below)
• In 2007 $288 million in taxes from firearms and ammunition. In 2009 $453 million
• Clay Duke, white male, shoots at Florida School Board members and kills self.
• Michael Enright, white male, kills cabbie who he suspects is a Muslim in NYC.
• Byron Williams white male, shoots at & arrested by police on his way to kill liberal members of liberal foundation
• Joe Stack, white male, drives his private plane into IRS building.

“Now, if the accused [the Arizona assassin/terrorist] had been Muslim, [instead of white males] does anyone doubt whether this mass murder would have been considered an act of terrorism?” asks Bill Quigley

One of the progressives in the comments section of this blog was recently talked out of buying a gun after the Arizona massacre at a Democratic congresswomen’s event Is it only a matter of time before the left stops lighting candles and violently retaliates? What happens after that?

Rage paranoia and division are growing in a country already consumed with violent behavior. Can President Obama and other leaders step up and use this moment to “Overcome Evil with Good?”

“the atmosphere in which this horrible tragedy was born, nurtured, and carried to its wretched fruition is toxic. Of course, there are always going to be unbalanced people, just as there are always going to be viruses in our environment — but what most determines whether those viruses make us sick is the strength of our immune system. When it is stressed and compromised, infections can easily take hold. “

To paraphrase the title of Arianna Huffington’s excellent editorial (her quote above) What will YOU do is the real question.

Will YOUR voice remain quiet?

.

——————————

.

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

——————————

.

Index	Percentage	Volume
Dow	-0.32%	down
NASDQ	+0.17%	down
S&P 500	-0.14%	down
Russell 2000	+0.48%	-

.

——————————

.

Technicals, Fundamentals & Analysis

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

• Markets fell in the AM and then the Fed primed the money supply with a $7.96 billion purchase of bonds.
• Volume figures relative to the past decade at this time are pitifully low.
• Mantra - THIS IS A  STOCK MARKET BEING MANIPULATED HIGHER by the Fed & the US government. Call it bad, good or ugly – just like QE 1, now QE2 (quantitative easing round 2) and low interest rates for shadow financials is perhaps the most significant driving force behind long term rally (more below under Tea Leaves section)
• Therefore, I remain convinced that good economic news for the USA is OK for stocks, but bad news is better because it means more quantitative easing by the Fed.
• Two significant factors weigh in today on markets – Europe All Eyes on PIIGS & Extreme Bullishness a Concern

.

—————————–

.

.

——————————

.

Reading The Tea Leaves

The ”schizophrenic.” pattern changed back again yesterday Big dip at open only to see stocks rally higher throughout the day.

Under normal circumstances this market would have crashed and burned, but for 18 months we had the training wheels of stimulus, low interest rates and quantitative easing.

The Baltic Dry Index is in a meltdown – Simply put the cost to ship goods worldwide is breaking down it costs less to ship each day and is starting to approach levels near the beginning of the recession.

Here’s the anomaly – The prices of the goods they ship are all near record highs – copper, grain, coal etc. Here’s a long list of comparative charts showing a strong correlation between the BDI, stocks and commodities breaking down into a 180 degree reversal.

Line from Hamlet – Somethings Rotten in the State of Denmark - Either some mysterious entity is producing dozens of huge ships each day or perhaps our Fed’s quantitative easing money is also being shipped abroad.  Edit 1/11 2:40 EST – it turns out there is a huge glut of new ships and the sites I used did not have this information. Mea Culpa

What to watch

AAPL - This time Apple had a solid gain as it broke out to another new high (up +1.88%).

UUP –  The dollar went right up its resistance level. It held and the tracking ETF for the dollar ended up falling.

Working on 2011 Investment guide - Short term more bearish, but bullish in long term for the year.

.

——————————

.

Positions

• UWM – UWM still outperforming other US indexes

Under consideration

UCO -(2x oil prices) Very erratic, waiting till correction settles.

REMX (Rare Earth ETF) -   Will buy back hopefully on slight dip.  Blew chance to buy dip yesterday – was not near computer when it happened. Only ETF under immediate consideration at this time.

EWZ (Brazil) & LBJ ( 3x Latin America – majority Brazil) Obviously the later is more risky because its leveraged 3X. Waiting for larger pull back on both.

UYG (ETF that does 2x Dow financials) XLF is the financial ETF. -  Massachusetts Supreme court has ruled against shadow banks foreclosing because of the difficulty in knowing who owns the hidden derivatives on the mortgage. Obviously in the end (We Have the Most Pro Business Supreme Court Ever – Headline this month’s Forbes magazine) the shadows will probably win. But other state supreme courts will probably be unanimously against this too. – We’ve had a dip on this news and might be done. Those with no ethic problems could consider a buy.

DGP – Will buy back into this 2x gold ETF on dip. Consolidating at support level. A possible buy. What probably happens is a bear raid breaking support. Then once the weak holders are whipped out gold will rally. Here’s a hidden gem of news – India has told Iran it would buy oil in gold. Those that can tolerate the risk – now’s the time to buy.

YOUR Stock List – Paul tells me YSL#3 was back outperforming the S&P benchmark. Add to that Yesterday was an outstanding day for YSL#3

If you check out the comments section of the blog you’ll notice Paul made a call on Solar Stocks a while back. This sector is white hot right now. Moral of the story is if you are a trader, keep an eye on the comments section of the blog for ideas.

——————————

.

Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including “YOUR Stock List.” (YSL#3)

The dollar war is certainly reason to exercise some caution. I have a stop on the more speculative SSO at what I bought it for.

Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including “YOUR Stock List.”

Fear

Each day two classrooms in the United States are emptied in the USA because these children are diagnosed with cancer.

Yet the brainwashing American media yesterday, from networks to blogs, focused on a “mentally ill, homeless and violent” man with guns and a bomb holding three hostages in Silver Springs MD.

Our culture has simple become conditions to over hype anything with guns, bombs and a potential terrorism because fear of terrorism sells politically and commercially. Your chances of dying from cancer, diabetes, heart attacks, or going brain dead from alzheimer are thousands of of times greater than a terrorist attack. Sure, we should be vigilant but we should also recognize reality.

Wikipedia reports that only 16% of the approximately 200,000 rapes a year in the USA are reported. How many classrooms are emptied because of the million women who get raped each year in the USA? Yet our American media growing trend is to focus on any potential terrorist related violence rather than rape.

Guess which country is #1 in the world in number of reported rapes so far this year?

——

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!

Index	Percentage	Volume
Dow	+2.54%	?up
NASDQ	+2.97%	down
S&P	+2.95%	down
Russell 2000	+3.81%	-

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. Jim Cramer -”BB/HFT make up 80% of trades.”

Quotes from yesterday - “Churning. “More often than not a big battle like yesterday between bulls & bears means a reversal in direction. In this case that would be a rally….Overall think the BB/HFT’s are setting up for a rally.

We had one big rally in slightly above average, but decreased volume. (sorry for  ”?up” above – couldn’t clearly read the NASDQ volume chart) This is your typical rally in a BB/HFT controlled market.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar, of course, fell  a whopping -0.82%.  Because the BB?/HFT are obsessed with the inverse dollar/stock relationship, you’d naturally expect a huge drop in one gets a huge rise in the other = Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rose +1.03% yesterday. After a 5 week rally the BDI has flattened out. Now starting to rise. = Neutral/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 +6.81 Now above Zero, & both 50 & 200DMA’s. Nowhere near +/- 60 so there is lots of wiggle room on each side, but momentum obviously with bulls. Therefore = NEUTRAL

Reading Tea Leaves

Monitor, a trader, in comments section of blog describes the MO forecasting tool best – “An observation – The McCellan Oscillator works!!!!! Plus or minus 60 seems to be a reasonable point where markets turn. If you like to take risks just go long or “buy the dip” when its under minus 40 and wait. Within a few weeks it will be at over 40 and sell”

It actually not all that cut and dry, but the general focus seems to be correct for a Long Term NEUTRAL market.

Mea Culpa - For long term investors there was a point over a week ago when the MO was below -60 & the Dow fell another 100 points which was a buy point.  Personally, as the record shows, I did buy some long positions TYH & SSO, but let the FEAR of loosing $ force me out of those positions with minor gains instead of holding onto those positions. My mistake.

Obviously another typical BB/HFT rally where short positions are forced to buy stocks to cover their positions. This gives added momentum to the rally.

September looks to be one roller coaster ride, now with an upside bias. There will be buying and selling points for both traders and investors. Stay tuned.

The obvious sub trend brought about by globalization is the economic deterioration of the US economically  vs the ecomomic rise of emerging markets and energy rich countries (peak oil mega trend – see Overview section of blog).

Will the emerging markets grow fast enough to pull the USA out of the Great Recession?

Positions

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

Current positions –  EWS (Singapore)

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Three ambushed Pittsburgh cops

Top Ten Native Terrorist Acts/Attacks on America

These all occurred on American soil and under the Obama Administration

The people at  the blog TMP have put together a list of top ten attacks (& those intending to act) on America from the rich terrorist who killed two by flying his plane into the IRS building to the ambusher of Pittsburgh cops who thought his would guns would be taken away. It includes the Hutaree, who Michigan AG says were waiting to bomb a large gathering of cops at a funeral for a fellow officer. (source NPR)

Most in this list, like most terrorists, believe that the government is foreign to them. The TMP blog does miss a few,including the Ft. Hood ambush. But this growing armed hatred  and killing is totally unacceptable.  The Southern Poverty Law Center publishes a list of over 300 Native extremist groups like the Hutaree. The SPLC, nonviolently fights against these groups.

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!

Stock Market in US closed today

Positions

However, did purchase a additional 5% position in (ETF – Brazil) EWZ at $74.75 & a 2% position in TEVA at 63.56 yesterday. See past Investors411 for more. (note I put a 7% stop/loss on individual stock positions)

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Obama at West Point

Most Eloquent Speech vs Horribly Flawed Strategy.

• The  center of terrorism is NOT Afghanistan, but anywhere there is an apartment, cave, pick up truck with a committed individual – A fanatic with a gun/explosive, cell phone,computer and money. Examples – Fort Hood, Oklahoma City, & Pakistan
  
• The generals who dictated this strategy are extremely happy. McChrystal “The Afghanistan-Pakistan review led by the President has provided me with a clear military mission and the resources to accomplish our task.” LINK
  
• Vintage Bush fear mongering of WMD’s at end of Obama speech on the nuclear weapons in Pakistan. Yes, difference is these are real WMD’s in Pakistan, but is the Obama/McChrystal strategy the answer. Dawn is the largest English speaking daily in Pakistan (relatively pro USA) Here’s what their readers say LINK
• Top 10 reasons Obama plan could fail by mid east expert Professor Juan Cole – LINK
• Rationale for the 3rd surge in Afghanistan is based on unrealistic concept of success of surge and success in Iraq. (see past updates – more later) What’s needed here is a standard business cost/benefit analysis
• We took out the Taliban in 7 weeks with a few thousand (guesstimate) American boots on the ground in 2001. Why is the situation so much more dire now? (see above on Iraq for partial answer)
  

Larry Wilkerson , former chief of staff to Sec. of State General Powell has the best summation in his Damed if you do Damed if you don’t editorial LINK

“If you are a praying person, he {Obama} needs your prayers and support. If you are not, he needs your support. Because all of us Americans put him where he is–and I do not mean by votes.

We–all of us–let George W. Bush and Richard B. Cheney set us up. Moreover, we all contributed to creating the perilous fiscal state that is now a more dangerous threat to our country than any terrorist could ever hope to be”

KISS & STOCKS

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	+1.23%	up
NASDQ	+01.46%	up
S&P500	+1.12%	up
Russell2000	+1.63%	-

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals, Fundamentals & Analysis

Volume was up a wee bit and the NASDQ actually hit average volume (50 day Moving Average).  So volume really did NOT confirm the price move. But volume is NO longer the #1 confirmation or forecasting factor of a price move - The Dollar is. – It fell over -0.50% and, therefore, stocks had a significant price rally Significant = basically +/-  1.00% for major indexes)

Now going to get a bit more technical

If you don’t understand a term look in up at Investopedia.com dictionary LINK

——–

Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI - The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI fell -61 points yesterday and closed at 3836. Technically  the BDI broke out through its major resistance level 4291 (this year’s high) over a week ago.  The BDI has rallied about 1700 points since late September. After 16 up days in a row, now, 9 down days in a row & down through the former resistance/now support level 0f 4291 . Rate of decline seems to be slowing .

What it means – Long term we created a higher high on the chart = Bullish. Short term we are on the way down = Bearish The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets. Recent price drop-Nothing to panic about yet

——-

The Dollar is currently the #1 forecasting tool .

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar. Mantra – Dollar up = US stocks down & Dollar down = US stocks up US dollar fell a significant -0.53% yesterday . Anything close to or over +/- 0.50 is significant  The dollar closed at $74.41 . 

——-

$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at +13.70 This is a slightly Overbought Position . This chart is showing we seemed to have reached a plateau. It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 .  There has been no clear buy or sell signal for over a month,. Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell

The closer we get to +/- 60 the better our chances of making money with a shorter term buy/sell signal

Positions

The  Positions Section (top of blog) to see all the latest buys and sells

Best recommendation – It’s time to buy some protection. Iran , lost a 25 to 3 vote in the UN regarding their desire to achieve nuclear weapons or nuclear power (if you trust Ahmadinejad believe the later) The chances Israel or the USA will attack is growing. Obama committing more troops to Afghanistan further surrounds Iran. The price of oil will skyrocket if therethere is an attack.

Some other terrorist event may occur over oil.

So, on dips, buy the commodity oil. I have to check this out further, but the appropriate commodity (not company based) ETF’s seem to be USO & OLO (OLO does 2x what oil does) The later is very thinly traded. Going to work up to 10% of portfolio.

Your comments (Monitor) – Be happy with 22% position in GLD . Activision – Good story behind this game producers – each time they produce a better sequel to a hit game their revenues grow. Might wait till ACTI breaks out of consolidation trend and/or market gets oversold. MOO – need more time, but will get to more analysis.

Bought back DGP at 31.70

Long Term Outlook = CAUTIOUSLY BULLISH

Mumbai

Obama can say I told you so – The center of terrorism is located in Afghanistan and Pakistan not Iraq.

Hopefully, India will not repeat the same mistakes the US did and over react. Still the best site/blog for information that is detailed and certainly is much more accurate in analysis than American Corporate Media is Informed Comment . You have to scroll down to Dec. 1. for India.

Green

If Spain can generate 30% of its electric power from renewable sources by 2010. Why can’t we do the same by 2020. = See Wikipedia

Deficits and the Future

Every right wing commentator and stock analyst loved to bash NTY’s Nobel Prize winning economist Paul Krugman (like other Nobel Prize winner he does make mistakes) But he was out in front of the current financial crisis. His latest editorial – LINK

Conclusion- "The best course of action, both for today’s workers and for their children, is to do whatever it takes to get this economy on the road to recovery."

"American’s Look for Next Bubble to Invest In."

The Onion headline from yesterday (above) Updates labeled the "shadow" banking system – the bubble folks were investing in last week.

In one sense the financial sector with all its toxic debt desperately needs investors. If it does not get investors the giant financials crash and the taxpayers will again have to bail them out with loans. The trouble here is who wants to invest in something that is not transparent and full of "toxic" debt.

Volatility

It’s almost impossible to recognize any trend when stocks take such huge moves. Fundamental economic factors like peak oil and globalization become less relevant in the face of a growing long term recession.

The technical series of lower lows and lower highs (on price charts) certainly is still in place creating one clear trend = Bears Rule

Stocks

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Headline – Volatility

Index % Change Volume

Dow -7.70% -
NASDQ -8.95% -
S&P500 -9.93% -
Russell2000 -11.85% –

US Market & Foreign Markets

Technicals

US markets got clobbered again with another one of those major meltdowns. Volume the chief confirmation factor was below average. Friday was a 1/2 day so volume was obviously up relative to Friday.

The massive flight by Americans and foreigners to US Treasury bonds (See chart of 3MTB and other Treasury bonds listed below.) shows potential investors are willing to to put their $ in other places than stocks in some cases for a long period of time.

Still a massive sell off in weak volume means volume did NOT confirm the rally. Therefore, a wild swing in any direction is possible likely today and for the rest of the week.

Chart of the benchmark S&P 500

Chart of the Russell 2000

Chart of the NASDQ

Chart of the Dow

Fundamentals

Citibank and other financials led a rally – but no other indicators followed. You can have a technical rally for so long, but if major fundamental factors don’t follow the rally will run out of steam. Too many people were putting their $ in treasuries, not stocks. There are only a very limited amount of investors out there and most folks playing the markets are short term traders.

Its official – we’ve been in a recession for a year.

Auto makers are back in front of congress asking for $ this week.

Three Month Treasury Bill & LIBOR

Credit markets are the dog and the Stock Markets are the tail. Without credit the tail won’t wag.

Real progress WAS being made. The credit spreads are tightening and LIBOR has fallen from 4.8% a five weeks ago to @2 .2 LIBOR rates have flattened over the last three weeks. LIBOR is the rate banks charge each other, not businesses. LIBOR is the rate banks charge each other.

The 3MTB fell -50.0% yesterday and closed at a rate of 0.01% The Fed rate is 1.00% . A normal 3MTB would be just under the Fed rate. – The situation is beyond dismal.

PANIC REIGNS in the credit markets again (check out chart)

3 MTB chart

LIBOR chart (3 month)

Treasury Bonds

All yields fell dramatically from 3 MTB to the 30 year treasury bond. If investors are putting there money here for 3 months to 30 years they are NOT investing in stocks.The silver lining in this panic to find a safe place for money is people all over the world are choosing the USA. This is part of the $ we use for bailouts or loans.

{Now using data from Yahoo financial – In part because it also lists municipal and corporate bonds.}

These is simply NO confidence in the credit markets and a massive flight to US Treasury bonds at all levels. PANIC RULES

Baltic Dry Index

The Baltic Dry Index is a forward looking indicator that measures pre production materials that are shipped around the world.

Bloomberg has a good interactive chart on this. You can see how this measurement of goods shipped throughout the world has dramatically dropped. Its fallen over 90% this year.

Set range indicator to one week and you will see this chart has dropped from 825 to 715 or a drop of @ 13%.. So while stocks rallied 15+% last week the amount/ price/measurment of raw goods shipped around the world fell dramatically. This is a clear further indication that worldwide recession is growing.

Short Term Outlook

Reading the Tea Leaves – italics = same comments as yesterday.

PANIC RULES the credit markets and its hard to see money flowing into stocks while so many potential investors are putting $ in treasuries at ridiculously low rates. The Balitic Dry Index chart alsois a major concern

Going Out on a Limb – Dow at 8929. We could rally some more. But, its hard to see the major 9654 resistance level fall and perhaps some of the more minor resistance levels will reverse the rally.
Start thinking to adding SHORTS (see list of ETF’s that short) to protect any long term gains you made when stocks had their last major dip. Best guess – today up tomorrow down in wild swings.

Looks like adding shorts to protect gains was the right call – However in the short term (today +) Volatility Rule. There are no logical long term positive trends. Short term traders are going to swing the market up and down.

AS ALWAYS DO YOUR RESEARCH BEFORE INVESTING

Long Term Outlook – BEARS RULE
Changes to Bottom Line Section Bolded

Technicals – Series of Lower Lows and Lower Highs = Bears Rule

Reading tea leaves – Look for range between 7449 and 9654 for rest of year.

Fundamentals – Financial mortgage transparency problem (credit default swaps $50 to $70 trillion ?) is far far far far far far far far far bigger than anyone thought.

We are in a recession. How bad/long the worldwide recession will be is be is the major question. It’s looks like the recession will last through 2009 – perhaps longer Hopes of a more competent Obama administration have rallied stocks.

Asset Allocation/Recommended Sectors (long term)

50% to 90% Cash – This depends on your risk tolerance – Long Term Investors (up to 15+% stocks – only buy big dips) Wait for the next big dip to add 5 to 10%
Be Cautious and PROTECT YOUR MONEY (15% Longs ) when stocks rally

*5%+% US Index Funds
UWM (ETF that does 2x what Russell 2000 does) & QLD (ETF that does 2X the NASDQ ) DDM (ETF that does 2X the Dow ) SSO (ETF does 2X the S&P 500)

*5%+ Emerging Markets
EWZ (Brazil) should out perform other emerging markets in a rally and under perform in a fall – highest risk
FXI (China ETF)

*5%+ Alternative Energy
GEX(Alternative energy ETF) Obama administration will focus on this area

*5% Gold
GLD is the ETF for gold

Chief Strategy – Buy the DIPS of trending sector – This is not your fathers market-over the 8 Bush years the Dow has gone from 11,000 to 8,500 and uncertainty clouds the future.

The major trend now is volatility.

Traders who have a strong tolerance for risk jump in on dips and invest more. Sell or go short into major rallies. Long term Investors who can tolerate risk and are 100% in cash nibble just a little on big dips. (5% on each big dip) Do not buy into rallies.

Shorting – Three ETF that short 2x what the major indexes do.

TWM – ultra short Russell 2000
QID – ultra short NASDQ
SDS – ultra short S&P 500

As Always Do Your Own Research Before Investing