We the People? or We the Wealthy People & The Giant Corporations.

Iraq

Still in chaos following elections almost 8 months ago. Pro Iranian Mullah Sadr has joined one side giving the side of former president and Sadr a clear advantage. Longest time any country has taken after election to form government.

We The Corporation

On Feb. 22 in a 5 to 4 vote the Supreme court  struck down federal regulations that restrict the amount of money corporations can put toward political advertising during elections.

• Now, any corporation can legally give millions to a candidate while YOU are restricted financially.
• What’s worse - Any millionaire can for a nominal fee form a dummy corporation by incorporating and directly give hidden money to a candidate or attack add group.

Money is the mother’s milk of politics and obviously this ruling puts both corporate power and individual wealth above the voice of we the people. Yes democracy has changed as both major parties have been lavished by corporate buying power. This holds especially true for what Tom Friedman termed the Tea Kettle Party.

History is full of wealthy oligarchies falling to people power. The 20th century is a great example of the rise of democracies. It is disheartening to see the world oldest running democracy move in the opposite direction.

Yet, at some point  in time people stop thinking  “about what happens one or two steps ahead” (from mathematician John Paulos – see blow) and wake up. Example – Tea Kettle platform (Tea Party) A tax cut for the wealthy, more foreign wars, and cutting taxes on huge corporations is going to decrease the deficit for our kids.

Warren Buffett says it best – “It’s class warfare, my class is winning, but they shouldn’t be.” Source for this & other Buffett quotes.

Firefighters and Homeowners

The comments section always has some of the best editorials and news. Paul R on the privatization of fire departments.

—

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 -

Stocks fell primarily because of the rise in the dollar. (see below)

John P Hussman PhD is a mathematician who predicted the recession. He often comes up with some interesting mathematical models for what’s happening. His Oct. 3rd newsletter

His view -”To some extent, I view current market conditions as something of a “Ponzi game” in that valuations appear neither sustainable nor likely to produce acceptably high long-term returns, and speculators increasingly rely on finding a greater fool.”

Hussman Quotes mathematician John Paulos on human nature and stock markets - “people generally worry only about what happens one or two steps ahead and anticipate being able to get out before a collapse… In countless situations people prepare exclusively for near-term outcomes and don’t look very far ahead. They myopically discount the future at an absurdly steep rate.” Undoubtedly, we have periodically missed returns due to our aversion to risks that rely on the ability to find a “greater fool” in order to get out safely. But it is important to recognize that speculative risks are not a source of durable long-term returns.”

With the extremely light volume and the dominance of market manipulators (BB/HFT’s etc) Investors411  is taking the position that these guys have a pretty good call on what’s happening. Therefore, a cautious approach based on the MO, the dollar, the BDI and major support resistance levels seems prudent. (see below).

The one differing point of view with Hussman is that emerging market are increasing becoming stronger and are more able to fend for themselves. Therefore the US can catch a cold economically and stocks can still rise. Just hope we don’t get the flu or worse.

Earnings season starts Thursday with Alcoa reporting and bloom next week.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar rose  +0.45% Monday.  We had the biggest rally in the dollar in over a month. Today will act a confirmation of the rally. We could see a reversal of the trend.  For stocks falling dollar trend is = Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rose +1.06% Monday.  An 8 week bull run, then a two week fall. Now consolidating for last few sessions = Neutral
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.]   Fell to -7.92. Still lots of room to move higher or lower. Location= NEUTRAL

Reading Tea Leaves

From yesterday – “Hard to see any serious stock reversal with the dollar continuing to fall. The BB/HFT’s algorithms seem to be set to buy the dip.” - The dollar have its biggest single day rally in a month and this reversed stock market mo jo. A one day reversal is obviously NOT a trend.

Traders – The market manipulators have been “buying the dips”- like yesterday’s fall of the MO into negative territory. Those who are looking for a safer entry may wait till -20 on the MO or more.

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)  One of several foreign ETF’s that have broken out and starting to get over extended.
• USO (price of oil/commodity). Exploded through resistance level and nearing 5 month high. Part of this is tied to dollar falling.
• SSO (2x what S&P does)  Still held onto last 1/2 of SSO. But will place another 2% trailing stop loss today.

Traders – Will continue to use/ buy SSO & TYH on dips if MO falls to @-20. For concepts on individual stocks see Paul R.’s always enlightening comments on right side of blog.

Investors – EWS and USO are getting over extended from their base. I like to sell 1/2 the position and let the rest ride as long as I have @ a 10% profit.  Will buy back in at next dip. I am looking forward to building a larger position in both. Will add other foreign ETF’s along with UCO (@2x USO on bigger dips) See Positions section.

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Chucky shredding wire from the movie or one of the remakes

Shredding Democracy

• Before Paulson/Bush asked for the  $700 billion 2008 bailout
• Before the worldwide 2008 stock meltdown
• Before Lehman Brothers went belly up

the FED Bank under Bernanke acting on its owned spent tens of billions of of unauthorized dollars bailing out AIG and Bear Stern. Without any constitutionally mandated congressional approval or oversight Bernanke/Geithner (who was NY fed board member) flooded these failing shadow financials with money. Did Paulson/Bush know this was happening?

“Its {the FED}secret deals, announced almost two years after they were done, violate the democratic process, if not the Constitution itself.” Robert Reich (Economist and former Sec. of Labor) The Fed came clean about this (masterfully) directly before the Easter break and American media has blown the story. Reich accurately explains the fall out here

What other secrets is the Fed hiding?

Shredding the Yankees

Yesterday was opening day for baseball, and hope springs eternal for every team. Most fans walk through a dark ballpark tunnel into a brightly lit transcendent green field full of hope on opening day.  The beloved Red Sox did twice come from behind to beat the evil empire, sometimes known as the New York Yankees, last night. Unfortunately there is over 170 games left if you make the playoffs and the Yankees will certainly shred far more teams than almost every other in baseball. Go SOX’s.

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

See Positions , Strategy , and Overview for changes made each weekend

Friday’s March jobs report was better than expected, especially for the critical private sector +123,000 jobs created.

It clearly looks like jobs creation started in November and is slowly growing.  Here’s the ultra right wind Washington Times on the jobs report Clearly good news for the economy. The old Jolly Green Giant (not so jolly anymore – Alan Greenspan) and Obama Administration predicting potential acceleration in numbers.

This report, even though the headline -9.7% job loss stayed the same, was too good for Wall Street. The longer interest rates stay low, the better it is for stocks. A better than expected number in the private sector translate to the Fed rising interest rates sooner than expected.

The big stat out of last week was China’s Manufacturing Index coming in better than expected. This shows global growth in emerging markets is still pulling the world’s economy.

Last Week’s Fearless Forecast – “Up week” –  All US markets near highs as rally chugs along. Like the RED SOX against the YANKEES last night. We won.

This Weeks Fearless Forecast – “Up week” – But really difficult call – The Dollar is King right now. Europe is weak (see past Investors411) and the US (jobs report) is strong. The start of the week should see a rally, but the Dollar is coming up against major support level. (see below) Best read of the tea leaves. Our bullish momentum should carry us higher at the start of the week, but I expect the dollar to hold its support. Earnings season is around the corner and the expectations of better earnings will be the deciding factor making it an up week.

Bottom Line – With the McCellan stuck near zero – no wisdom in buying or selling any large position at this time. Will continue to nibble on dips.

Significant Indexes

• McClellan Oscillator rose significantly to -1.46 yesterday.  [+60 or above = Overbought = sell. -60 or below = oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. – This (at least for a day) broke the downward trading pattern. Downside and Upside risk are about the same. We are neither overbought or oversold.
• US Dollar -fell  -0.44% yesterday. [Anything over +/- @0.50 is significant.] Dollar broke through a more minor support level Friday and ended the day at $80.71. The major support at it climbing 50 day moving average is $80.19. Would be very surprised to see this fall. Falling dollar = rising stocks

As stated before -What the dollar does over the next few weeks is critical to stocks and economics around the world. Falling dollar good for stocks & rising dollar bad in the short term

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) - These are positions I actually own

3D and related theater stocks weekend results good. Simply not enough 3D screens to fill the demand.

The big news is the manufacturing growth in China (see above) – Mistake to take profits in FXI (China), but adding EWZ (Brazil) looks to be a good counter balancing longer term move.

Strongly considering adding health care/Biotech ETFs on dips. Their fundamental story is compelling (baby boomers getting older & obamacare covering 30+ million more) Their charts are outperforming. Recently added stocks TEVA & ESRX are in this general area.

Its frustrating, but I’d rather wait till US equities are more oversold to buy larger long term positions.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING