YOUR Comments

The comments section is the hidden gem of the Investors411 blog. LINK Here for yesterday’s comments from stocks to politics and scroll down.

A sample -

• Scott H - Another point about the republican debates and I’m not really picking on Republicans because the Dems do the exact same thing. Each candidate was essentially auctioning themselves off to the most powerful sectors of corporate power whether it be big oil, Wall Street, or the defense industry. Each candidate was pandering themselves to certain major corporate sectors and assuring those sectors that they would be the best return of their investment.

• JS Back to NLY … Watching it the last few days, approaching it’s 52 week high, signs of a slowing recovery, bond, CD rates so low, investors searching for income, maybe 50 day moving average isn’t working for these high div stocks. On the other hand, ex div is coming soon, and div capture may also be adding to price rise. One thing to keep in mind, regardless of tech, is higher interest rate will effect the price of NLY. CPI rose much higher than expected today. On Motley fool, one poster said he kept a core position in NLY but took some profits when high and bought some more when low. Sounds good to me. I’ll be watching interest rates, and NLY’s price action, since it’s an outsized portion of my portfolio.

• Yankee Bob  Mitt is by far,the best the GOP has and he is pretty bad. Your Gordon Gecko linkage is  spot on. Will the Dems have the balls to use it? Will they feature an ad of Mitt/s business  success where he buys distressed companies,sells off their assets,lay every one off and sell the equipment to overseas operations? Is that what America wants?! His job creation and Gecko past is not proof of his ability,..Just the opposite. He’s a greedy fat cat  that made money as a vulture. He created ….nothing. That’s strike one.  Strike 2  is how…

To see how Yankee Bob ends his editorial or the 21 other comments scroll down from above link and be sure to check out today’s debates, stock information or sometimes knock down drag out fights.

Tomorrow – #37 – What does it mean?

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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

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Index	Percentage	Volume
Dow	-1.48%	Up
NASDQ	-1.76%	Up
S&P 500	-1.74%	Up
Russell 2000	-1.83%	-

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Technicals, Fundamentals & Analysis

• The McClellan Oscillator (MO) chart exploded lower to -53.89 ( below -30 = somewhat oversold, below -60 = oversold, below -90 OMG oversold) The lower the MO goes the more the chances for some sort of rebound. Obviously, we’re now close to -60 so pressure for rebound/rally is building

• $USD The Dollar rocked higher an most significant +1.83% (consider that Investors uses +/- 0.50 as a significant one day move) It broke out through resistance and formed a higher high on its chart. Today is the confirmation of yesterday’s massive move. Big tim bullish for dollar and for stocks = Bearish

• Reading The Tea Leaves - Short term (repeat) – Staying with the same dead cat bounce pattern of lower highs and lows till it breaks down. Pattern in place since early May  The dead cat rally bounced Tuesday and fell Wednesday = Bearish. Investors411 predicted an MO of -90 to 120 this summer. It may come sooner than expected.

Image from Yahoo Finance

• Reading The Tea Leaves - Longer Term (repeat) –  “See May 20th blog for forecast for this summer.”

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Paul’s Corner

Congratulations to the Boston Bruins! A great game 7 and a well fought series!

I trust  most of you folks are sitting on the sidelines during this market correction. It’s scary at the moment and in my humble opinion you should be in cash.  Ian Woodward and Ron Brown from HGSI publish an outstanding News Letter every month. You’ll never find a stock  recommendation in the News Letter but what you will find is excellent market analysis and some very good lessons designed to make you your own market guru.

Here is a short snippet Ian said  in the June News Letter which came out last evening:

“Yes, there is money to be made on both the short and long side of the market with the current Market Yo-Yo behavior, but frankly it is more prudent at this stage to be patient a little longer and wait until the true direction is established. This market can cut you to ribbons, especially if you are not able to watch it in real time.”

Ok since I’m quoting from the masters, Ron Brown’s Morning Report just came out and he points out the following:

“I noticed on the monthly chart of the NASDAQ below that more volume has already traded this month than in the entire month of May.  This is a sign of distribution.  Tomorrow is quadruple expiration day, so it could be extremely volatile. Be careful with your capital.”

If any of you folks are interested in adding to your trading skills I encourage you to take a look at the HGSI product!

Folks this isn’t the time to play in the market, please protect your capital. Let’s sit back and watch the fun.

Remember, you are responsible for your investment decisions, and I am not.  Please do your diligence, and please take ownership for your actions because I‘m sure not going to.

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Positions

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

NLY - Annaly Capital Mgt. Ultra high dividend stock.

TZA - ETF that is 3 times short small cap stocks Bought 1/2 TZA position at 39.75 Thursday.

Gold/Silver - Repeat - No trends except gold is out performing stocks and silver. A major editorial on this in near future

Repeat –  More likely to add TZA than subtract. Would buy more TZA in small rally

Repeat – Investors411 recommends using TZA or SDS as a hedge/insurance against losses in high dividend stock NLY and especially if you own other dividend stocks (see past month+ blogs on dividend stocks.)  This way you protect prices of dividend stocks against falling prices and still collect the dividend.

Repeat Strategy remains

• Short any rally - Investors411 will use TZA (3X short small cap stocks) and SDS (2x short S&P 500 more conservative) .
• Sell long positions into any rally -

Disclosure - I own NLY, & TZA - I buy all stocks mentioned in the hypothetical Investors411 portfolio.

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Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative comments section every day.

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The Fed has moved from an expanding money supply to a neutral – No QE #3. Congress is threatening to contract the money supply. “We [the USA] need to grow at this point more than anything else.” Investors411 outlook will remain negative on the USA unless the Fed and/or congress return to more pro growth policies.

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Longer Term Outlook

Neutral/CAUTIOUSLY BEARISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

Popeye & Mama Jama (AKA Olive Oil)

Your Comments

Mama Jama – Are 25 hedge fund managers are worth 658,000 teachers? The 25 moguls/oligarchs who run the giant hedge funds and only get taxed at 15% are earning $25 billion a year vs and average teacher whose salary is 38k per year (plus benefits) and being taxed at 28% – Only in America.

Want to learn more about the Ten biggest Lies or Distortion Wall Street is feeding Main Street from Les Leopold

Popeye - This comment caught both Paul and my attention yesterday It summarizes globalization & US political impact on Main Street – Big business no longer needs the American consumer to grow. To them the Chinese consumer is replacing them. (You could replace China with the word emerging market consumer)

So not only are jobs being outsource, but so are consumers.

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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

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Index	Percentage	Volume
Dow	+0.09%	down
NASDQ	+0.15%	down
S&P 500	+0.10%	down
Russell 2000	+0.10%	-

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Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

• Markets were flat & volume abysmal AGAIN
• Yesterday rare earth metals exploded higher. The new ETF for the sector REMX was up over 7% on a climax run.
• Can’t emphasize this point enough - The Fed has now accumulated over a trillion dollars worth of T bonds  from its 21 Prime Dealers (Big financial institutions) These institutions all have trading desks that invest a lot of that money in stocks. It also helps to keep a lid on Treasury yields and the new currency helps drive down the dollar. Without quantitative easing and low interest rates stocks would not have made the gains they have over the last 18+ months.
• China has almost cornered the market on rare earth materials.

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Reading The Tea Leaves

We had some odd moves on the significant forecasting tools (see above) and No real reaction from stocks.

However, if the dollar and T bill yields continue to fall like yesterday  - It sure looks like the Fed’s manipulations through quantitative easing and low interest rates are having a significant impact.   This would be good for US stocks. Two points investors are looking at suggest quantitative easing may continue/ morph into QE3#

• The deep economic trouble of state budgets (see Meg Whitman’s comments in last weeks blog)
• Continued high unemployment.

AAPL the world’s #! tech stock is the canary in the coal mine. If the General rolls over watch out.

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Positions

• #1 UWM - (2x small cap stocks ETF) – Sold 1/2  for +9% profit
• #2 UWM
• EUO - (double short the EURO currency)
• UCO – (double long oil) Bought Tuesday at  12.39 (this is a trade of short duration)
• SLV – (Silver ETF) Bought Wednesday at (see comments section of blog.)

Selling 1/2 of UCO at open and putting a 2% stop loss on the rest. This ETF is currently at the price it was bought for. See yesterday for explanation)

Buying GDX – (The double gold ETF) –  A lot of the rise in price in gold has to do with the Fed’s print and dump of money. It says instability and gold says stability. GDC has dipped recently.

SLV has reacted technically even better than gold. It also has industrial uses

EUO have a stop placed at what it was bought for. It’s about 2% above that right now.

Your Stock List – Paul informs me that YSL#3 is currently under performing the benchmark S&P 500 +5.05% to +3.78%. Disappointing results However, there have been 13 gainers vs. 3 Losers. – It’s been two of those losers that have dragged down the entire list. Both are Chinese internet relate stocks that have big losses – BIDU & especially SOHU (More later)

UWM – The Critic informs me that the UWM (our major ETF position) that was bought on the same date as YSL#3 was published (11/22) for 35.76 is up +22% over same period. Since Investors411 has both bought and purchased double and triple positions in this market basket ETF, she is compiling a more complete record.

I’ve tried a lot of other ETF’s that have been less successful over the same period. Example EEM, which was held on the same day UWM was purchased was sold earlier for a +4% profit.

Comparing the two is like comparing apples and oranges. Especially since many of the ETF’s turned out to be short term trades.

Diversity is the key here. I strongly feel that having both ETF and stock selection has merit and is a way of diversification. YSL numbers 1 &2 outperformed the benchmark S&P by over 2 to 1.

Let’s give it all more time before the final results are in. Then learn from what was done.

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

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

Perhaps the World’s Best Known Economist

Joe Stiglitz – Photo John Thys/AFP/Getty Images

Joe Stiglitz “is cited by more economists than any one else in the world” Stiglitz is an “economic prophet” and Nobel laureate who predicted the current economic meltdown. Investors411 has for years been quoting Stiglitz starting with the true trillion dollar cost of the Iraq war.

So why is the Obama administration ignoring this Nobel Prize winner? This is one of the major stories in this week’s Newsweek and can be found here .

Paul Krugman , another  Economic Nobel Prize winner goes even further here

Instead of surrounding himself with some progressive economists who warned of upcoming economic meltdowns, Obama has surrounded himself with a Goldman Sach’s crew featuring Larry Summers who participated in building the economic mess.Remember,  Goldman Sach’s, who was a prime mover in creating the economic mess and  took both bailout & Fed money, had a huge positive earnings surprise this quarter.

Health Care

Photo – WaPo

Jim DeMint the Republican Senator from S. Carolina who considers the Obama government “national socialist” (a nazi – like Hitler’s Germany ) says the right wing will use the health care debate to “Break Obama.” Story here

He’s right about the break Obama part.  If health care reform does not get off the ground this summer (some form passes both House and Senate) it will die because unemployment will rise before it falls. This will put Obama in a far weaker position.

It’s time for Obama to stop worrying about consensus building in congress and to start playing hardball.  WaPo on Obama’s next move Hardball?

Your Comments

Popeye adds some more information about the secret  fundamentalist group behind US politicians (see Thursday’s post & comments to the left) – The Family . You can find out a whole lot more here As you might have already guessed this group has strong links to Sarah Palin .

But it not the obviously hypocritical ties to the three adulterous  Republican politicians that is most ominous. It is the past ties and philosophy of this secret group and their allies that is even more significant. (more later)

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index	Percentage %	Volume
Dow	+0.37%	down
NASDQ	+0.08 %	down
S&P500	-0.04%	down
Russell2000	-0.54%	-

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

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

Technicals and Fundamentals

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

We did have the best week in many moons for stocks . We did take out a resistance level on the benchmark S&P 500. We did have one day of strong volume confirming the price move.

However, after big gains like last week, technically, overbought markets need some rest. That plus the SPX is at 940 and this year’s high/major support level is 956.  We may appraoch this level, but the bulls need a rest. Hard to see other companies come in with the earnings results of Shadow Banks like Goldman Sachs and Morgan Stanley Bearish momentum.

The NASDQ did close at a new high for the year and this certainly creates a Bullish pattern. Biggest fundamental of the week is Microsoft’ s earnings report and Apple also could give overbought index some bullish momentum.

Significant forecasting tools/Indexes for stock markets

BDI - The Baltic Dry Index measures the flow of goods (world trade) The big gains at the beginning of the weakened Thursday and more on Friday. It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern. Remember, this index usually moths a lot smoother and turns more slowly than other indexes. It hasn’t turned yet but Bears seem to be gaining momentum

In a nut shell the BDI is

• short term - Bullish
  
• mid term -  Bearish pattern
• long term - Bullish pattern
  

$USD - The Dollar is on the verge of falling down through in its in its 5+ week long consolidation pattern between $79+ and 81+. It did briefly break its support level but rallied Friday. Dollar closed up 0.32 at $79.51.-

Fearless Forecast For the Week

Last Week’s Fearless Forecast – So expect a rise with some financial stocks reporting early in the week and that rally to get tempered later in the week This happened, but Investors411 failed to predict the magnitude of the rally till after Intel’s earnings.

This Weeks Fearless Forecast – Technically overbought markets need a rest . 30 to 40% of Dow & S&P report this week and it would be surprising to see as many positive earnings reports as last week.  Therefore, most likely a down week. But because the NASDQ broke out and created a higher high, we could see another shot at moving higher later this summer. It looks like bearish pattern developing on BDI. If so, this is trouble.

Positions

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

QLD – which was bought independently of “the Hedge” at 38.2 last week will get sold today . QLD closed at 40.47 Friday – why be greedy. We added a lot of positions last week. (QLD, IFN, EWZ, EWS ) Time to take profits on one.  Will buy back in on another dip.

The Hedge – The SDS part is down -3.44% and the QLD part up +5.51% The net gain is +2.07% We are hoping that the QLD outpreforms the SDS.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!