• Warren Buffett – “Why should I have a lower tax rate than my secretary”

• Steve Jobs -  Fox News is - “An incredibly distructive Force”

Remember the giant corporations and the weathy have  an army of lobbyists and lawyers in Washington. This is what they pushed for

• 1998 – Tore apart banking regulations like allowing  banks to merge with insurance companies

• 2004 – SEC allows bank over leveraging to grow from 12 to 1 to 40 to 1

• 2008/09 – Financial meltdown. Housing crisis, Bush/Paulson  bailout of too big to fail banks. -9% GDP & stocks tank

Nothing we can do becuse its all legal They privatize gains. We taxpayers subsidize the losses

• Romney (uber wealthy) paid 13.9% rate on his 2010 taxes while most working American pay far more.

• Romney’s company Bain, like hedge funds and other investment firms, pay only 15% on their profits while small business pay a much higher tax rate.

• Romney, sets up $100 millon dollar tax funds for all his sons without paying taxes. We can’t.

• Gingrich, like all politicians, can exit politics and make millions lobbying for government agencies (Fannie & Freddie)

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ITS LEGAL, ITS LEGAL, ITS LEGAL

Because they own our government.

Elizabeth Warren -

In her passionate plea to fight for the working middle class -

“Washington now works for those who can hire an army of lobbyists and an army of lawyers … 30 largest companies pay more for lobbyists than they do taxes...Who really pays for that?…And the answer is America’s middle class. They’re the ones left to pick up the pieces, to pay the taxes, to keep the country running.”

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The Optimist

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Warren Buffett

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The Put Your Money Where Your Mouth is Challenge

Answered

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Buffett & Republican Senate Leader McConnell

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The Story

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The richest man in the USA wants to pay more taxes.

He makes most of his money through capital gains (not work) and feels he should pay more than 15% capital gains tax. He thinks it’s not fair to the rest of us who work and pay a higher tax rate.

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Buffet’s Secretary pays a higher rate of taxes than he does.

Most Americans pay a higher tax rate than Buffett.

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So, McConnell and Republicans in congress challenged Warren Buffett.

If you care so much about America why don’t you pay more taxes?

In Time magazine Buffett has put his money where his mouth is and told wealthy Republican members of congress  he would match ALL their contributions dollar for dollar.

Will Republicans Put Up or Shut UP?

_______

Guess who pays a higher tax rate?

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Uber wealthy Republicans or Brave 911 NYC Firefighter

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That’s right, uber wealthy Mitt Romney has taken a pledge NOT to raise taxes on the richest 1%, who like him are paying 15% tax rates on the capital gains – most of  their income.

Hell, Romney even wants to hide his tax returns/wealth, unlike all the Presidents from Ronald Reagan to Obama – who has published his last 10 tax returns.

Romney and the uber wealthy skim the profits off the top while you do the work.

Whose side are you on?

Romney or the Firefighter

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STOCKS

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Wall Street Bull and OWS Symbol

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• JPM  the before the bell earnings report Friday will set the tone. Big banks are leaders in the current rally and JPM is perhaps the most solvent of the group.

• Our #1 technical forecasting tool, the McCellan Oscillator (MO) fell slightly to +51.53 . 50DMA at +0,37 Getting close to overbought territory – about +60. Since early 2008 a reading near+90 has indicated a reversal is coming, (for more see  STRATEGY link at top of blog)= NEUTRAL/bearish

• Massive drop in Italian bonds this AM. -0.5% = Very Bullish

• Going to take profits on a  chunk of my EUO calls today. Still

• Warren Buffett takes a big position in BAC and the stock rallies 30+% – Why the call him the Oracle of Omaha.

It’s on its way

YOUR Stock List #5

• Four times, together, we’ve  roasted and toasted our benchmark S&P 500 LINK (scroll down for results)
• Four times YOU sent in entries for YOUR stock lists
• Four times  Paul & I have gone over them and picked potential winners (we added a few too)

Now its time for YOUR stock List #5 (YSL #5) and we think its the best yet.

Tomorrow in Paul’s Corner

YSL #5

_________________

• Warren Buffett on Charlie Rose LINK – If you can hold the US debt ceiling hostage, you can hold it hostage to anything from abortion to the latest war.

• Warren Buffett in NYT “Stop Coddling The Super Rich” LINK

One early poll means almost nothing but Rasmussen Poll: Rick Perry 29%, Mitt Romney 18%, Michelle Bachmann 18% and Ron Paul 9% But it does raise an eyebrow.

Perry is a larger than life “gun toting, flag waving, bible thumping, Bernanke bashing, Tea Party loving, patriot.”

If I were Mitt Romney I’d be really concerned that if Bachmann of Paul drops out their vote will go to Perry and not him.

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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

Index	Percentage	Volume
Dow	-0.67%	low
NASDQ	-1.24%	low
S&P 500	-0.97%	low
Russell 2000	-0.93%	-

_______________

Technicals, Fundamentals & Analysis

Shorter Term Outlook.

day/days/week

• A weak volume rally followed by a weak volume decline – Just the kind of situation HFT’s in the past have used to extend a weak volume rally. News out of Europe did cause a drop, but interday we rallied off the lows.

The 3 Legs – Europe, USA & Emerging Markets

• Never forget our mantra - High Frequency Traders Rule US & European Equities- These entities make their decision in microseconds and are not based on long term trends. They account for low volume rallies and other atypical technical market behavior.

• The McClellan Oscillator (MO) fell to +9.99 (-30 somewhat oversold, -60 oversold, -90 OMG oversold)( +30 somewhat overbought, +60 overbought and +90 OMG oversold) Chart shows we are almost dead center in the middle of oversold and overbought territory. There’s wiggle room for stocks to move either way and mojo is with the bulls. = Neutral

• Reading The Tea Leaves – Short term momentum still with the bulls. Fed’s low interest rates till mid 2013 and relatively low levels of the dollar mean profits for globalized American companies should hold steady. Momentum still with the bulls till we reach oversold territory in the MO

Longer Term Outlook

weeks, month, months

• Repeat - May 20th forecast still stands. The May 20th summer forecast has come to pass and now we wait to see the Fed’s next move.

• The Fed’s promise of low interest rates through 2013, has brought the Long Term Outlook for US Stocks close to NEUTRAL. Any announcement of a type of QE #3 would push the outlook even higher.

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Current Positions

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

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

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

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

GLD – (Long Gold ETF) Obviously a MAJOR mistake to sell and take meager +3% profits. Like a millions of other people who see worldwide economic problems ahead – waiting to buy another dip. Mea culpa – The small two day dip was a decent  entry point and I missed it. Why Gold

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

________________

The Fed’s promise of low interest rates through 2013, has brought the Long Term Outlook for US Stocks close to NEUTRAL

________________

Long Term Outlook (for US Economy)

BEARISH

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Long Term Outlook (for US stocks)

CAUTIOUSLY BEARISH*

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

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

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

Warren Buffett – “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” NYT 11-26-06.

Warren Buffett

Obama Caves Into Wealthy

Several of you mentioned yesterday Obama’s tax cut “compromise that extend tax cuts for the wealthiest Americans – The compromise part was unemployment benefits were extended as part of this. (see comments section of blog.)

The Good –

• Extending tax cuts for working class Americans making less than 200k is stimulative. These folks spend the $ rapidly and the economy flows
• Extending unemployment benefits is even a bigger stimulus because this money is injected even faster into the economy
• Both these factors create jobs and we desperately need jobs base to grow.

The Bad –

• It does nothing to address to address the systemic problem of good jobs leaving the USA by globalized companies hiring everything from engineers to software developers in emerging markets.
• Its a major victory for the growing wealthy oligarchy that is perpetuating class warfare on working Americans.

The Ugly – Who gets to compound their wealth for two more years.

• 4 million taxpayers who earn mid to upper 6 figure salaries
• The less than 1% who earn over a million dollars a year.
• Estates over $5 million dollars
• Hedge fund managers and other black box traders who pay 15% in taxes yet earn millions/billions

There are an obvious loosely tied together wealthy oligarchy of greed based individuals and major institutions in the USA who are seeking greater power and wealth at the expense of their fellow Americans. Most stay in the shadows and dominate politicians who need their money to get elected. They won a massive victory yesterday.

My ideal compromise – Would have been to tax everyone over the first $200 or $400k of earned income and give 1/2 that money as an additional tax break to American workers and 1/2 toward reducing the deficit.

There are many rich folks who realize that they too can profit if the American working class prospers because we BUY the goods that wealthy people take part in producing. I’m not calling for a radical change just movement toward a more balanced playing field.

Thanks to JIM J for his chart showing 16 different metrics showing wealth/income over decades moving DRAMATICALLY from middle class to very wealthy in the USA.

STOCKS

Investors411 tries to keep it basic.

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	-0.03%	up
NASDQ	+0.14%	up
S&P	+0.05%	huge up
Russell 2000	+0.47%	-

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Technicals, Fundamentals & Analysis

Big volume and rally fizzled. Much of the volume involved rebalancing involving Citigroup that traded about 3.3 billion share and was up 3.82%. Reference  - the NTSE trade about $7.5 billion shares yesterday.  A lot of yesterday’s gains were due to this single stock.

Reading The Tea Leaves -

Mea Culpa – I’ve made a rookie mistake – One of  Investors 411 mantra over years has been if a stock or index gets too over extended from its 50 day moving average its time to sell.

Three of the ETF I’ve recently purchased are/were over extended.(see charts) This is easily demonstrated by just looking at the charts. A recent example of this in the comments section was covered by when IMAX & DECK got over extended. So even though UWM was up yesterday I cut back on holdings. The same for UCO & today will do the same for DGP I announced these sells in the comments section of the blog.

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The rise in the T bills has taken a bite out of the lower interest rate/weaker dollar trade that has fueled this market.  Best read of the tea leaves is that this is a temorary move. Today is the confirmation day of yesterday’s 10 year T bill explosion higher.

This shows investors moving into T bonds. Usually this means they move out of stocks to go into bonds.

Positions

Plan to sell 1/2 of DGP near open. and put a 3% trailing loss on the rest. Both will end up in the red.  Will put a 3% trailing stop on #3 UMW position today.

Plan to buy back in after consolidation of perhaps a few days. Also the 10 year T bill settles has to down.

YSL is in for some lumps of T bill rally continues.

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.

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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

Index	Percentage	Volume
Dow	-0.72%	down
NASDQ	-1.11%	down
S&P	-0.80%	down
Russell 2000	-1.45%	-

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!

Dow 10,000

Yesterday the Dow closed over 10,000.  Some major facts that cheerleading American corporate media has ignored about Dow 10,000

• The Dow was at 10,000 ten years ago. Buy and holding stocks over the last 10 years has really LOST money. A whole lot more than you think
  
• If you adjust for inflation the Dow is really at 7,537 – you lost 25% of your purchasing power. Thanks to one of you who sent in this LINK
• If you compare the Dow to Gold (in some ways this is like showing how far the dollar has fallen in value relative to other countries) “It cost about 30 ounces to buy the 10,000 Dow last time. Now it costs less than 10.” The  loss in purchasing power becomes even bigger.

Therefore, relative to the rest of the world and inflation major US companies/the Dow has taken a huge fall over the last 10 years.

Relative to this years Dow low 6470, Dow 10,000 sounds mighty good .  Financials have lead this Dow/Stock Market recovery from 6470 to 10,000.

• JPM * (see below) just announced multi billions of dollars in better than expected profits. So will other shadow banks
• These financials are giving big rewards to top executives who still look for ways to make bets on money (Credit Default Swaps etc) and are building up hoards of cash in order to have collateral on these hidden bets.
• Obama and his Wall Street administration have even made it less transparency for shadow institutions – mantra, we now have NO mark to market accounting.
• The banks are not making loans to small businesses like they’re supposed to and the gov’t instead is making those loans/gifts – cash for clunkers, tax cuts, $8,000 first time homeowner gift etc.
• These big shadow institutions are here to stay. LINK according to Obama’s administration “the genie is out of the bottle.” Looks like these huge unregulated institutions are here to stay.

Therefore shadow banks, the creators of “financial weapons of mass destruction” (Warren Buffett quote) rule. Obviously those who robbed you and brought the world to its financial knees are being rewarded. Investors411 has screamed about the injustice and future doom of continuing the  hidden financial system, but it has contributed significantly to the Dow reaching 10,000.  Like greedy little pigs we are again building a financial system on illusion.

Investors411 recommends the following  (see overview for more)

• Traders – Play the financial stocks (shadow banks). They rule. Ride the wave. Dow 10,000 means lots of wealth has been again created for upper middle to ultra wealthy. Some of this will get spent and help the American economy and the blackmail shadow banks have is if they go under so does the stock market . Never forget we are only building another hidden asset bubble
• Long Term Investors – Do what everyone else is realizing buy Gold GLD (see past Investors411)
• Long Term Investors – Buy countries that create wealth by manufacturing real goods or producing real commodities – China & Brazil

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	+1.47%	up
NASDQ	+1.51%	up
S&P500	+1.75%	up
Russell2000	+2.00%	-

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 and Fundamentals

“Expect other indexes to follow Gold & Brazil. ” (Both GLD and EWZ have broken out to new highs.)

Put on your Rally caps and watch volume – Today should be the day that we know if the money on the sidelines is willing to start to get back into stocks.

Volume showed a wee bit of new money did come into the market, but let’s see if it gets sustained. CNBC and everyone who has money invested in Wall Street is cheerleading for that money to return (see above editorial)

So we’ve had at least a one day rally, but more importantly we’ve fundamentally had top line (sales) growth from Intel and some minor companies.

* JPM , Perhaps the #2 shadow financial institution also hit an earnings home run. Remember, instead of TARP money going toward the elimination of bad debt (credit default swaps) all the Bush and Obama administration have done is shovel money at them and allow them less transparent accounting. Most likely shadow banks/financials are hoarding funds because their real debt from the financial crisis is still huge.

Google & IBM are the next major tech to report after markets close today.

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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 is @ 40% (I haven’t done the math) off its high (early June) Before that it gained almost over 630% from its all time low of 663 in Dec. of 2008 (April 2009 high of 4291 )

The BDI nine day rally flattened out two days ago and has fallen 99 points. It fell a -49 points yesterday and closed at 2579 . Even though a reversal seems eminent, we have technically achieved a higher high even though the BDI is falling.  Another 100+ point drop well start to get a little concerned and the line in the sand support level is 2163 =  Bullish for stocks & world trade right now

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$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

Stocks went up so guess what happened to the dollar – The dollar reached a new yearly low fell a significant -0.46 % The dollar closed at $75.47. We have developed a support level just below $76 . The dollar closed below its support level. = Bullish for stocks

NB –

• Earnings will probably trump the dollar as the #1 influencing factor for the nest two weeks. But the falling dollar is the main driver of stocks right now and we have a long way to go till we hit last year’s $71 low.
• A slow decline in the dollar = good a rapid decline = bad .
  

Last year’s low was around $71, so there is a long way to go before the next major and very crucial support level.

Positions

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

See comments section of blog for a complete update on positions.

EWZ – Brazil up +4.05 % yesterday is starting to go parabolic.  It’s going up way too fast as investors are chasing the stock.

GLD – Remains a solid buy the dip opportunity (even small dips)

XLF, UYG & FAS (big financials/shadow banks) are also buy the dip opportunities . UYG is riskier and FAS is most risky. Traders could see a buy the dip opportunity today.

Sold FAS yesterday for +8% profit

Your (Monitor’s) Questions – See comment section of blog

INTC did fizzle yesterday – up only +1.66% vs our positions in China (up +3.55% ) and Brazil (4.05%) Technically, Intel had gone up almost 40% last quarter and a whole lot right before earnings – so the higher price was already built into the stock. China & Brazil have not had the same huge run up, although Brazil is reaching the same overbought position that INTC.

For US and other countries to move forward we’ll have to see other companies show top line sales growth.

Outlook is still CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

The Crash, Bailouts and Future of Wall Street

James B. Stewart has an excellent and frightening  editorial in the New Yorker (you have to subscribe) that starts by describing just how close the world came to total financial collapse. Bernanke, Paulson, & Geithner are heroes for preventing the fall over the abyss. Of course, they’re villains for helping to create this mess too.

Pulitzer Prize winner, Stewart goes well beyond this (If any of you can find a link to this editorial please share it) Here’s a valuable Q&A on his piece from the New Yorker LINK

Willing to bet – Less than 5% of American’s  have some understanding of what happened (the crash, the bailouts, and solutions) Everyone, running around like chickens with their head chopped off,  screaming, or just plain angry.  Instead of listing to the dogmatic screamers – get educated – take some time and learn what happened.

Your Comments

Dr. Gold has written a  guest editorial for Investors411 and has  just posted some valuable insight on the health care debate. Check out the comments section of the blog for her wisdom and all the other comments.

They’re Back

Financial Weapons of Mass Destruction (Warren Buffett’s term) Credit Default Swaps are becoming popular again just one year after the major economic meltdown that almost created financial Armageddon throughout the world. Bloomberg , a major financial radio, TV, web, and print outlet headlines the following “Credit Swaps Lose Crisis Stigma as Confidence Returns.” LINK

Obama Scraps Missile Shield

Front Page NYT. LINK

Finally. Remember the missile shield that was supposed to be built in eastern Europe (Poland) to protect them from a country over 1000 miles away – Iran.  Made no sense then and none now. In the event of war with Iran what you want to do is to keep them from destroying the Saudi oil fields. Perhaps this will bring about some detente with Russia.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	+1.12%	up
NASDQ	+1.45%	up
S&P500	+1.53%	up
Russell2000	+2.07%	-

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 and Fundamentals

Technically, A significant big volume rally = Bullish sign Some money is coming on off the sidelines.

CAUTION – This market is up 8 of the last 9 days. It’s overbought.  Look at any huge rally in big volume as  climax selling – and sell (take some positions off the table) into that rally. Sometimes a climax can be two days of intense buying.  It would be great for bulls to have a flat  or down day in decreased volume.  Don’t think this will happen because there are so many waiting to buy the dip.

This rally is based on a falling Dollar (down 8 days in a row) The dollar is oversold and reaching a support level (not a really strong support level).  This combination of oversold and an upcoming support level should hold for at least a day or two.

A dollar that slowly declines helps stocks – up to a point. At some point (perhaps close to last year’s low or huge declines above 0.50% for a few days) a cascading dollar becomes a problem because it shows a lack of confidence in the USA - our debt is too huge.

This is another free market stock bubble building – the questions become will it grow too large? & when will it burst? As long as there are

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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) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . The BDI has leveled off and started to rise over the last few weeks. BDI fell a minor -16 yesterday. They are small losses, but the index has fallen 5 days in a row. BDI trading at 2415 and has recently formed a resistance level at 2388. Would not trust any stock rally, especially in foreign exporting countries if the BDI breaks down significantly below this number.

2388 is number to watch We are getting mighty close to support levels . Another down day is reason for caution.

The BDI is 41% off its high (early June) Before that it gained almost +170% from early April to Jun e

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$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar.

The dollar has fallen 8 days in a row.  It dropped  -0.37% yesterday. Dollar trading at $76.18 . The last two days have seen rallies in the dollar crushed. There is a support level around $76 (lows from Sept & Aug. of last year)

Mantra – Dollar up = US stocks down & Dollar down = US stocks up

Last year’s low was around $71, so there is a long way to go before the next major support level.

Positions

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

Current positions listed as % of portfolio

• EWZ (Brazil) 12%
• FX I (China) 18%
• XLF (financials) 10%
• GLD (gold) 10%
• EWZ (S. Korea) 5%
• SPX (S&P 500) 20%

Other positions discussed – But  Investors411 does NOT recommend individual stocks. I personally own- bought a week a two ago.

• NVS (Novartis)
• AAPL (Apple)
• FAS – (3X financials) – I’m in and out of this ETF

Other positions mentioned, but not bought – AIG, C, GS

Would be more focused in taking a little profit from investments especially the closer you are to being 100% invested. Remember this is NOT you’re old buy and hold market. – There are still financial WMD’s out there and rallies/collapses that used to take years now happen in days/weeks.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!