Heroes

Part 1

Egyptians Protesting for Democracy

Time magazine Person of the year was the protestor. The world exploded in protest from the bloody cities of Syria to the pillars of Wall Street.

The protestors - From the Arab Spring protestors in bloody Syria to those that Occupy Wall Street have had the courage to fight for what they believe in.

The Time Magazine Story is  deserves your attention.

Investors411 will spend this week on the Individual Heros who have acted to make a difference.

To be continued

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Young Americans

Charlie Brown Cartoon

Statistic

America’s Future - Nearly 1/3 of  Young Americans have been arrested for a crime other than a traffic violation. LINK

So when young Americans protest that they are being shut out of what was the American Dream, our media focuses on their behavior instead of their message and tries to tear down their OWS movement.

Pressure’s building, you can continue to sit watch the tube or do something to to give these kids a chance at success.

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Mr. Dysfunctional

Government

Republican Speaker of House John Boehner

The Senate passed a continuation of the Payroll Tax cut with a the added provision including building of the Keystone Pipeline.

It passed Overwhelmingly 89 to 10

Nobody was happy, but finally Republicans and Democrats were working together.

Not so when it Came to the House of Representatives which has a strong never compromise, our fellow Americans are the enemy, ideologue right wing Republican contingent. The Republicans who , under Boehner, control the House refuse to bring up the bill for a vote.

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They’re Baaack

Neocons

The use of Brute Force & endless wars is the only solution

You might think Mitt Romney’s words in Presidential Debates are just rhetoric – Romney – “Taking China in front of the world court on day 1, Doubling the size of the US navy, and  adding 100,000 troops” is just vintage fear mongering for votes.

The USA already spends six times what China does on weapons.

Romney is sending a less than subtle message to every military contractor out there to flood my campaign with undisclosed cash (his PAC’s) and together we can fear monger America into a war with China (trade or military)

This is just what we did with Iraq.

As Yogi Berra says- Deja Vu all over again.

Remember what happened when Obama’s campaign got flooded with Wall Street/Shadow Banker’s $$$ – Reforms of too big to fail bank turned out to be almost non existent.

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STOCKS

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Every time Italian bond yields rocket there is a mysterious buyer that comes in and buys all the high yield bonds. Investors411 believes this is the Fed and allies(through proxies) who drive down the rates. This AM was yet another test…

Libertarians and Solutions

Ron Paul/Libertarian

There will be more tests on the 10 year Italian bond.

Libertarian blog Zero Hedge goes into its usual panic today about Fed injecting $$$ into Europe and deressing the Italian bond yield.

Libertarians (Ron Paul) have claimed the sky was falling more times than Chicken Little. This site does some good research, but should be taken with a block of salt.

If they were right the inflation rate would now be a multiplicative amount higher years ago. Their end goal is a gold standard that would send us spiraling into a depression. But they do understand the to big to fail shadow bank problem.

A far  superior solution to our crony capitalism is to enact laws (regulations) and police (regulators) to enforce a just system of capitalism that does not privatize gains for a few and socialize risk for many working individuals.

Who are the 99%

See more of the 99% at

http://wearethe99percent.tumblr.com/

Pass on this or your favorite photo

Tom Friedman’s editorial in the Sunday NYT has an excellent article on the crony, casino capitalism we are fighting against.

Some major points –

• An under reported Citigroup Fraud “that made GS “look like boy scouts” – No one gets arrested while thousand of Occupy Wall St. protestors do.

• A comparison to Taharir Square in Egypt’s quest for justice where the “game had been rigged by the Mubarak family and its crony capitalists.”

• “Capitalism and free markets are the best engines for generating growth and relieving poverty — provided they are balanced with meaningful transparency, regulation and oversight. We lost that balance in the last decade. If we don’t get it back — and there is now a tidal wave of money resisting that — we will have another crisis.”

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Euro Zone Doubts

Lots of news outlets over the weekend cast doubts over last weeks  Euro Bailout. Here’s one from NPR’s Jim Zarroli .

But the best (easiest to understand)  is this two minute animated explanation featured in the Guardian.

Click on animation photo for link to video

The impact of these editorials on stocks covered below.

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Raising Cain

Huffington Post headline this AM is about “flavor of the month” (leader through October) Herman Cain having accusations of “sexual harassment” If there is any validity to these charges Cain is toast.

Candidate Rick Perry, last quarter in financially out raised Cain 6 to 1 and even beat Romney.  Money buys elections and flavors last a month. Perry, last week picked up endorsement of Mr Flat Tax -Steve Forbes. If Perry can stop putting his foot in his mouth he would be a very strong candidate.

Mitt Romney took a spank from mega conservative columnist George Will on Romney’s flip flops

Perhaps, Obama’s biggest weakness was how would he answer the 3AM phone call?  He did with Somali Pirate’s, Bin Laden, His #3, and Ka Daffy. Do we want an indecisive flip flopper answering that 3AM call?

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STOCKS

“Deja Vu, All Over Again”???

Yankee Star Yogi Berra

On July 21 st markets rallied on the news of a Euro Bailout Plan – Greek bond holders took a 21% cut , etc. The chart of the benchmark S&P 500 shows a significant rally in above average volume on the 21st. We held onto or confirmed those gains the next day just like last week and the second major Euro bailout plan.

After a weekend investors started to doubt the rescue plan and by Aug. 8th the S&P 500 was down almost 20%.   The question is – are the current doubts strong enough to have the same impact on the investment herd? (see above links and link below)

Click on photo for link

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Reading The Tea Leaves

• Our #1 technical forecasting tool, the McCellan Oscillator, is at +77.29 . 50DMA at 22.45. Overbought = Bearish.

• Our secondary indicator, the Put Call Ratio is at 1.00. Well below its 50DMA which is at 1.15 = Bullish/Neutral

• For more on MO & PCR see POSITION Section of blog (scroll down)

• China’s growth numbers has its critics, but again its GDP was over 9% again.

• Consumer sentiment is down, but consumers are spending more in USA.  Due to top 10% (income) on buying spree and the bottom 90% very worried.

Bottom Line – Too hard to make a definitive call on this situation because the manipulators (Central Banks) & shadow banks are hidden in opaque accounting.

However , if you use some inter market technical analysis, the kind John Murphy creates, you’ll see some clear hesitation across currency, bond and commodity markets. (What all this means in tomorrows Investors411)

Same long term outlook till/if we break down below 1225 on SPX.

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Long Term Outlook

3 to 6+ months

Investors411 upgraded its Outlook last Monday to CAUTIOUSLY BULLISH. Reasoning

• Technically, we broke out of this summers trading pattern. The resistance and now support level for benchmark S&P 500 is @ 1225.
• Fundamentally, the perception that European banks will survive (see Banksta at War) another over leveraged crisis
• A 2.5% GDP Growth in the third quarter is NOT a recession number.

CAUTIOUSLY BULLISH

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

Everything written in BROWN is a repeat from a previous day(s)

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMER ERRORS.

Stocks

Friday, Saw a major short covering rally in US equities. The move off the summer lows has been led by financials (ETF = XLF) Up almost 20%.

The major issue in the short term is who is going to finance sovereign debt of Greece and other European countries.

The German banks are the largest holders of European debt. The Greek situation is crisis #1. Today

• At 8:00AM EST  German stocks up +3.55%
• Earlier this AM Greek stocks down -4.6%

This data trumps others and says the rally will continue even though our McCellan Ossillator is at overbought levels 69.87

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The Long Term Outlook has been upgraded to CAUTIOUSLY BULLISH because of a technical breakout in the trading pattern and what is perceived to be a victory for bankstas in Europe. (more explanation tomorrow)

Investors411 has a position bought Friday – SPY (S&P 500 tracking ETF) at 123.5 (see comments section of blog)

Traders – Shadow banks and financials look like they will continue to rally, but are very risky

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Long Term Outlook

3 to 6+ months

CAUTIOUSLY BULLISH*

*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(s)

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMER ERRORS.

From yesterday – “Not making any specific move until dollar breaks out of its range. I would look at a breakout higher for the dollar, and a corresponding fall in stocks and the MO to oversold as a buying opportunity for long term investors.”

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.”

China

CHINA RULES (or at least is beginning to) – The Shanghai stock exchange has dropped over - 20% from its summer high (You have to be Chinese to invest) Monday it dropped -6.7% and had slight gains overnight. This plunged commodity prices lower (example oil down -3.82% Monday) China imports lots of oil.

Here’s CNBC’s Jim Cramer on why China rules LINK Here’s another analyst CNBC LINK – “I don’t think China is driving the rest of the world, I think that’s a little bit of an over exaggeration,”

Bottom line – China’s economic power is growing and becoming more crucial to the world each day.  To put it bluntly their managed capitalism is kicking the butt of our “free market” system relative to growth and has been doing it for almost a decade. These short three paragraphs are an oversimplification, but the China is kicking our butt part is very real.

Stop Escalating in Afghanistan

Conservative columnist George Will is calling for a serious draw down in Afghanistan. Obama – Afghanistan is a “necessary war.” It may have been one back when it started, but there is a lot of logic in what Will proposes.

To start, The elections in Iraq were less than honest, but it sure looks like the elections in Afghanistan were an outright fraud.  Times of London LINK

Here’s Will’s editorial in the WaPo LINK

His conclusion (the military industrial complex dominates the Obama administration will never allow this) below

“So, instead, forces should be substantially reduced to serve a comprehensively revised policy: America should do only what can be done from offshore, using intelligence, drones, cruise missiles, airstrikes and small, potent Special Forces units, concentrating on the porous 1,500-mile border with Pakistan, a nation that actually matters. ”

Iraq/Iran

The Green Revolution has been pretty much crushed, but still smolders in Iran. An emerging power struggle between the Supreme Leader and Ahmadinejad seems to be taking place. NYT & others have run front page stories on this recently.

Perhaps the first three entities to recognize Ahmadinejad as the “legitimate ” president in Iran were Iraq, Hamas, and Hezbollah. Iraq is looking more and more like Iran’s best friend rather than what it used to be – its worst enemy.

History repeating itself – Remember Russia depleting itself economically and militarily trying to Nation Build in Afghanistan. As my favorite philosopher Yogi Berra would say, “Déjà vu all over again.” – The USA is spending trillions trying to nation build in the mid east and quietly but very successfully China is rising. Teach your kids Mandarin .

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	-0.50%	down
NASDQ	-0.97%	down
S&P500	-0.81%	down
Russell2000	-1.34%	-

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

Volume decreased as stocks fell.  The lack of volume is a sign that the predicted correction (see yesterday’s update) might not be upon us yet .

The 5 deeply trouble bailed out institutions (AIG etc) had major corrections yesterday. AIG chart link . Volume decreased significantly. These shadow institutions obviously have some more volatile days in front of them. But for now falling in lighter volume is what bulls want to see.  Even though the Obama administration & Fed are not going to allow these institutions to fail & they do not have to use mark to market accounting (no transparency) the fundamentals simply do not justify the run up in price.

If you prefer gambling to investing, I’d wait another day or until prices get closer to 200& 50 day moving average before putting bullish chips on the table.

Therefore , FEARLESS FORECAST – is for a down week .

The  jobs report for August comes out Friday most important fundamental of the week. ISM (manufacturing ) report out today.  What’s key here is  we get a good number (above 50 would mean manufacturing growth) If market does not move higher on good number, it is a strong indication that market correction underway.

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S 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 Retreats – What are its drivers ? From Seeking Alpha LINK

“Remember almost every country has based their recovery on exporting their way out of this mess” The infotainment financial channels and analysts used the BDI when things were going well and are now ignoring it. The #1 factor behind the BDI’s retreat is China seems to have stopped or seriously slowed down buying commodities.

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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 was rose -0.19 % yesterday. Dollar closed at $78.15. Its  major support level is @$77.5 & it has 2 major resistance levels – a falling 50 day moving ave. at @$79.20 and the August highs of @ $79.5 .  If it breaks down through support stocks should rise, if it breaks up through resistance stocks should fall.

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

This is the index to watch because its impact is immediate.

Positions

The whole Positions Section has been revised (Click on “Positions” at top of blog). Check it out

The BDI and Shanghai Stock Index’s fall are cause for concern in our Brazil  & China positions. China has turned off the stimulus spigot and its impossible to tell just how much further these ETF’s positions will fall.  We have made some huge profits that are getting eaten into.

Investors411 has slowly tuned more toward US equities because of this (XLF & SPX) and cut some foreign positions.

In the long term China Rules, but shorter term expect further losses . Considering taking some more profits.

Your Comments

Both privately and in the comment section of the blog you are asking for individual stock recommendations. OK I have a few. Stay tuned.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors 411 Record - Beating the S&P 500 for 4 1/2 years

Your Comments

Yogi Berra – Old Yankee catcher

Both Mama Jama and Bob Sadinsky have come up with some valuable info on health care in the comments section of the blog.  Check out following Physician’s website – here

Yogi Berra said it best – Deja Vu All over again

Just like in the Iraq war when anyone questioned the war was shouted down with in your face screams that you were “unpatriotic,” “un American,” and” hated the troops.”

Now in the  health care debate. Bob points out that the same thing is happening. Town hall meetings to explain heath care reforms are being  shouting down and  disrupted.   This coordinated organized angry protesters are funded by the drug, insurance and right wing fringe groups. Some examples

• In Massachusetts  one anti public health care advocate “likening Rep. McGovern to Nazi war criminal Josef Mengele, notorious for performing macabre experiments on concentration camp inmates.” link
• In Connecticut “an angry mob” heckled Senator Dodd who has prostate cancer  to “treat” his cancer with a “handful of pain killers” & “whiskey” link

The Democrats are fighting back with the following add about the same old Mob . You can see it at the same above link (you may have to scroll down) Unfortunately this political in your face yelling works because it takes the attention off the debate/facts and onto yelling demonstrators.

Who pays for the almost 50 million uninsured people when they use the hospital? – First the hospital, then you pickup the eventual huge increased cost? If we institute a public system the cost would most likely be picked up by a 5% tax on those earning over 1 million dollars a year.

You pay or those who get big Wall Street bonuses, sport figures, Rock stars, CEO’s, old money mansioned  millionaires pay.

Yes, some smaller business owners will loose $50 k out of $1,000,000+ they make each year.  Some might cut a job instead of buying a new boat. But with health care covered the uninsured and those who loose everything because the insurance company finds a way to deny them coverage in a medical disaster will be protected. These folks will now be better able to spend money once they know they are covered.  Small business will benefit in the long run by their spending.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	+0.36%	down
NASDQ	+0.13 %	flat
S&P500	+0.30%	up
Russell2000	+0.88%	-

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

Big news is jobless figures for July come out on Friday. Don’t expect major moves in US equities till that number is announced.

US markets shot up in the last 20 minutes of trading – A short term Bullish sign.

Significant forecasting tools/Indexes for stock markets

BDI - The Baltic Dry Index measures the flow of goods (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . 2975 is the major support level and the BDI closed at 3159 – down last four days in a row. As long as we hang in above 2975 stocks should do well.  This chart (click on BDI at beginning of paragraph) moves rather smoothly,

In a nut shell the BDI is

• short term – Bearish trend starting
  
• mid term -  Bearish pattern
• long term - Bullish pattern

Warning – The BDI falling through its support level at 2975 would be very bearish. BDI fell -9 2 points yesterday. At this rate we will reach critical support by the weekend.

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$USD - We broke that major support on Friday and dollar took another big hit Monday Tuesday the dollar inched forward +0.19% Here’s a multi year chart of the US dollar that show the line in the sand support level or its all time low below $71.00 in April to June of 2008 .

What this means for stocks – The dollar has a long way to fall before it hits major support. Therefore, stocks (and oil prices that are tied to the dollar) have a long way to rise before this support level is reached .

Support levels have been broken and that break conformed by Monday’s further meltdown. Dollar closed at $77.74. Lots of downside momentum established over sharp fall of last 3 trading days.  So yesterday looks like just a technical pause. Bullish for stocks

Positions

The whole Positions Section has been revised (Click on “Positions” at top of blog). Check it out

The problem here is investors are buying the smallest of dips. We’ll keep adding until the dollar and the BDI fall to their major support levels. The Dollar dropping is key to this rally and it has a long way to go before reaching major support levels. The BDI is close to breaking support and this will impact all exporting economies.

Therefore, by weeks end it may be time to take some profits on foreign investments like the Singapore and South Korea ETF’s. Both the falling dollar and BDI cold hurt these stocks if trend continues. China can hold its own even though overbought right now. Brazil is strongly influenced by oil prices and it should hold up even  better. – Nobody ever went broke taking profits.

Buying EWZ (Brazil) & QLD (2X NASDQ 100) on dips.

Apologies to those of you who are long term buy and hold traders. You could hold onto EWY (S.Korea) and EWS (Singapore). Investors411 has only held these positions for one and three weeks. Plan to reinvest in them again later. Right now they are over extended and vulnerable to falling BDI. So I’s using a tight stop/loss order after opening (I know I’ve lost some of you with this technical explanation)

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!