Financial Crimes Unit

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Eric Schneiderman- Head of new Financial Crimes Unit.

Obama in the SOTU address announced the creation of a

financial crimes unit.

When Obama took office he appointed Darth Vader/Larry Summers as his chief economic advisor. Summers was under Secretary of Treasury to Robert (former CEO of GS) Ruben who went along with the 1998 the Republican proposal to gut many financial reforms and allow Investment banks to merge with Insurance companies.

1998 was the start and the process continued throughout the Bush administration. Cutting regulations and regulators led to the finacial meltdown of 2008/2009.

Fed Chair, Alan Greenspan Mr “Free Market” himself

admitting deregulating banks was wrong

Summers, who left the Obama administration almost year ago,  had coddled the big banks.

This new unit, which is three years late, will be headed by New York Attorney General Eric Schneiderman

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Another Republican Debate

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Republicans will score this a clear win for Romney.

Another typical Republican food fight that was painfully short on solutions and filled with accusations and counter accusations.

Romney’s most effective line was about family values and it absolutely crushes Gingrich – “I stayed with my wife though MS and Cancer” (Newt has had 3 wives and scored big time when jumped on the media for making the topic the first question of the debate.)

More from USA Today

But it’s not over till the fat lady sings

and Newt has a new docudrama coming out at 5:00EST

Preview

If it hits with his billionaire PAC money it could do some damage.

However, Mitt is outspending Newt 3 to 1 in FLD.

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YOUR Comments

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A follow up to yesterday’s Yankee Bob editorial - Two outstanding posts (scroll down at link) yesterday on solutions from JS and Yankee Bob on a financial transaction tax. As always PAUL R keeps you up to date with the latest breaking insight in stocks and trading concepts in the comments section.

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STOCKS

• Long term – As long as interest rates stay low, and there is liquidity without inflation – investment money seeking higher returns will be forced into stocks and bonds. This dynamic has not changed under Bernanke/Obama even though other significant sectors of the world have taken some big hits (Europe & Japan) or are slowly pulling back – China.

The POSITIONS page does not yet reflect the

2012 Outlook.

• The MO can be read like any chart (see  above link) – Three times in January the MO has tried to break out above the 55 to 60 range and failed. Yet is has stayed in a very tight range between 30 and 60. If this range/trend breaks  on the top side bulls win and on the bottom bears win. The fact that the trend is from + 30 to + 60 instead of minus is BULLISH

• Mantra – Low volume rallies are a characteristic of Central Banks and friends manipulating stocks/bonds. They have become quite good at this and these rallies have tended to last.

• DAX (Germany)  was up over 1% yesterday and this failed to move US markets higher. The disconnect between Europe and the USA is growing. Italian bonds are now below 6%. Conclusion – Its way too early to call a long term trend, but it looks like there is some light at the end of a what will continue to be a long dark tunnel for Europe.

• NFLX –  Kudos to Jim J who made a 65% Profit on his combination Option Trade of NFLX. The Strike price for both the Put and Call was $95 and the expiration this Friday. NFLX ended the day up +22.06 after earnings.

• Two more considerations for Option combinations. BIDU (Monday earnings) A short term trade. MCP as a possible long option term combination trade.

• Homebuilders, will be a recommendation this year. 3 homebuilders have been added to YSL 2012 this week. ETF’s - Paul seems to prefer the ITB homebuilders ETF. I like the XHB because it is @5x more liquid and therefore a better for options. Both work as a long term investment.

PINK Ribbon Friday

At 4:15 AM EST I dropped my wife off at the starting point for the 3 day, 60 mile, in what will be 100+ degree temperature  Susan G Komen “Race for the Cure”  in a Boston suburb.

To all of you who have contributed to my wife’s or one of my daughter’s efforts (First Descents) to raise money and/or awareness of Cancer THANKS. For all YOU do to help others, no matter what the cause, (and lots of  YOU do far more than we do) another thanks.

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YOUR Comments

Often, like yesterday, the Comment Section (scroll down) comes alive with Stock Concepts (see Paul & The Critic) and political debates/information. The follow comment and reply have stirred some passions and thought provoking concepts.

From Popeye -

Paul –  So many misguided Americans fall into the trap created by the wealthy oligarchy that controls the media. 2008 is the example of them privatizing the gains and socializing the losses. (Barr’s phrase)

Shadow banks etc. stole or manipulate trillions to themselves and their friends. Instead of focusing anger on those who caused the 2008 meltdown and steal trillions, the right wing media has  many Americans blaming each other, hating each other, fear mongering each other and fighting to divide the SCRAPS left on the table.

Hate the teachers, hate the government workers, hate the unions, hate the seniors who get social security, hate the cops. They’re responsible for the 2008 meltdown and all the jobs going overseas. – WRONG

I back those who are willing to work, and if being a liberal means that millionaires and billionaires should pay more for the damage they have cause then I’m a Liberal.

What the oligarchy wants is to eviscerate government to nothing. Then without any check and balance they can squeeze what remains of the American middle class out of existence and replace us with the Chinese consumer.

Reply From JS

Popeye,
You don’t have to be a Liberal to hate the banksters, and how they got away with it all. I guess you think the NYTimes and the liberal media that I mentioned are controlled by the right wing oligarchs.

How did you, Barr, Paul and others get the info you refer to? You got it because you’re not lazy. So the big battle is who will control, influence the “great unwashed”?  Did they vote for Obama? I guess the right didn’t control the media or unwashed during that election. The right only controls the media  when the Reps win? The Dems can raise mucho dinero; look at all Obama has raised so far this cycle, even though the Wall street tycoons are cool to him this time. How about the 2008 election, who raised the most? The question, I believe, with all the money out there for the left, is why can’t they have a competitive cable outlet. What happened to Air America? This question has to be faced by the left. Are they that incompetent?

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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	+1.21%	Up
NASDQ	+0.72%	Up
S&P 500	+1.35%	Up
Russell 2000	+1.07%	-

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Technicals, Fundamentals & Analysis

Shorter Term Outlook.

day/days/week

• Repeat – Yesterday (2 days ago) was the confirmation day of Tuesday’s big rally. What we got is a weak confirmation – a slight decline but in weak volume. Technically this is a wee bit bullish. Yesterday the wee bit bull turned into a big time bull

• As mentioned two weeks ago - “If the US debt default starts to hurt stocks, politicians will fix the problem rapidly because their campaigns are all funded by an elite oligarchy of insiders.” However, it matters what investors worldwide think of our political/economic system. That confidence was shaken in 2008. Idiot politicians can further destroy this confidence with their inability to compromise.

• Two of our most successful technical forecasting tools listed below -

• The McClellan Oscillator (MO) chart rose to +20.35 (+30 somewhat overbought, +60 overbought, +90 OMG overbought). The more overbought we get the better the chance for a reversal to the downside) Still lots of room for MO to move higher or lower. Last high almost 3 weeks ago was +90. Current Level = Neutral

• $USD The Dollar fell a massive -1.04% yesterday (+/- 0.50 is a significant move and the dollar is usually a contrarian indicator) Not only was the fall massive, but the price chart shows we broke through a month+ long support level. Very bearish for dollar, but for stocks = Bullish

• Reading The Tea Leaves Solid earnings in tech stocks is bullish.

• NB - There is also reason to believe that major US based International Corporations will do well or won’t suffer badly even if the US defaults in the short term. Main Street and our financial credibility will suffer far more with inflation, especially in the long term. Major globalized companies (example APPL, CAT, etc.) will benefit from the devaluation of the dollar. Their goods will cost less with a falling dollar.

• Also, any default will cause chaos in the bond market and drive some of that cash into stocks. Clearly stocks should suffer, but the point is they may not take a big a hit as bonds, housing prices, and other asset groups more directly impacted by inflation/interest rates

Longer Term Outlook

weeks, month, months

• May 20th forecast still relevant. However Technically the strong volume confirms the rally (see above explanation) and has changed the long term outlook to CAUTIOUSLY BULLISH. Caution – Changes in long term outlook are subject to change because the trend is not yet firmly established.

• Repeat - It’s impossible to accurately predict how the politically manufactured Kabuki Dance over the debt will end. Therefore, hanging in their with a NEUTRAL Long Term Forecast. However, perception favors bulls.

• Caution – This market is still dominated by High Frequency Traders and Central Banks.

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Current Positions

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

This sections needs to catch up with changing events – See stock lists of Paul & The Critic in yesterday’s comment section of the blog (scroll down)

NLY - Annaly Capital Mgt. Ultra high dividend stock - Has dipped down into buyable position. Caution if we do have meltdown over debt crisis this stock will take a hit.  However through 2008 meltdown it still produced a double digit dividend.

All the blow concepts are at least, in part,  considered of the potential of a US default

GLD & SLV – Sorry again did NOT pull trigger on this trade. See yesterday’s comments section of blog.

UDN & UUP - Considering holding UDN – An ETF that shorts  the dollar. Another possibility in “Puts” on UUP – An ETF that is double long the dollar. Shoulda, Woulda Coulda – Both these trades and BZF moved in the right direction. Waiting or a dip.

BZF - ETF that tracks Brazil’s currency.

Disclaimer - Personally I own  a group of dividend stocks (also a couple other long term investments) including NLY. I have placed puts on one ETF of a major index and a couple of dividend stocks. I dropped one short position yesterday. I buy everything in the hypothetical Investors411 portfolio.

JS in the comment section has used the term “insurance” to describe the way “Puts” are used protect long term investments. – email me if you want to know more or post a question in the comments section.

I firmly believe you can make money with BOTH long term investments and short term trades.

See POSITIONS Section of blog for ideas

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

Don’t forget to send in your stock choices fro our new Stock List #5

Deadline Friday 4:00PM EST

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Longer Term Outlook

CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

Jeff Immelt/CEO of GE

Prius of Power

The giant American conglomerate GE plans to open a hybrid -solar, wind, and natural gas - energy plant that can supply energy for 600,000 homes by 2115. “Imagination at work!”

Jobs, cleaner energy, no nukes – Bravo GE -Just where is this American company putting this energy plant?

Wait for it. Wait for it. Wait for it - ……………………………………………………… Turkey. Remember the head of GE, Jeff Immelt,  is also the head of Obama’s commission on fixing unemployment in the USA. Thanks Jeff. Great choice Barack

YOUR Comments

Yesterday, in the comments section of the blog you (JS, EW Paul & Popeye) had a lively debate (scroll down) on Germany and Unions. Also lots more on stocks.

Media Matters

The HUGE preponderance of scientific evidence supports human causation as a major factor in climate change.

Yet in the period from Dec. 201o to April 2011 76% of the appearances of guest were against human’s as a cause for climate change. This of course was led by the FOX news outlets.  In a contest of Scientific vs. Media saturation who wins?

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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	-0.18%	Flat
NASDQ	-0.97%	Up
S&P 500	-0.42%	Flat
Russell 2000	-1.19%	-

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Technicals, Fundamentals & Analysis

• The McClellan Oscillator (MO) chart fell to -63.83.  US Stocks are oversold. A “snapback” oversold rally is possible.

• MO did reach -90 in March and - 130 last May after the end of QE #1.

• Reading The Tea Leaves -There is a high probability that we will reach -90 to -130 on the MO this summer. Still holding to May 20th forecast for this summer.

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Paul’s Corner

Oh The Pain and Agony!

This market keeps ticking off, and it’s extremely over sold, we should have a decent bounce any day now. Yup any day now! Any day now fer sure! Although volume was up yesterday we still haven’t had a high volume blow off of a day. OPEC didn’t help at all today and Bernanke’s comments Tuesday seem to have put a few nails in the coffin.

Market internals aren’t getting any better, the only  groups up bedside the VIX were the oils.  60% of the S&P 1500 stocks  are below their 200 DMA, that isn’t good. The MO summation index has turned decidedly down and the MO has more room to fall. SOXS the 3X bear Semi ETF was up 6.1% Wednesday.

The Finance Equity Reits were top  in the high demand search.

Fin-Equity Reit (12.00%, 12 securities)

• American Campus Communities (ACC)
• American Capital Agency Corp (AGNC
• Annaly Capital Management  I (NLY)
• AvalonBay Communities  Inc. (AVB)
• Camden Property Trust (CPT)
• Digital Realty Trust  Inc. (DLR)
• Dupont Fabros Technology  In (DFT)
• Equity Lifestyle Properties (ELS)
• Equity Residential (EQR)
• Public Storage (PSA)
• Simon Property Group  Inc. (SPG)
• Tanger Factory Outlet Center (SKT)

A lousy day and why not, a search for the best stocks under $10 as selected by HGSI:

• BDE
• BNA
• CERP
• IMOS
• CDTI
• CLFD
• FTLK
• GENE
• KKD
• MHLD
• MDF
• NR
• QPSA
• SQNM
• HCKT
• TWER
• WSTL

I have no idea if any of these woofers are worth buying, some have decent charts. You are on your own looking at these stocks.

So what’s the market going to do today, futures are up this morning, is this a new morning in America? Let’s load up Quote Tracker and find out………here we go folks another day of fun!

Remember, you are responsible for your investment decisions, and I am not.  Please do your diligence, and please take ownership for your actions.

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Positions

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

SLV/AGQ (very roughly 2x silver) Sold 1/2 for +3% profit. Have a sell order in on balance for 3% loss. Considering selling into rally.

REMX - (Rare Earth metals) Investors has a 1/2 position in this ETF. Sold at/near open for 25.31 = -2% loss. Total for REMX trade = -1%

NLY - Annaly Capital Mgt. Ultra high dividend stock. Caution - NLY and similar stocks are going elliptical  in heavy volume – usually a sign of a climax run – simply put – so many buyers jump in that the stock runs out of buyers in the short term and takes a hit. We saw the same in silver a month or two ago. Another day of heavy buying would be a bearish short term sign. For NLY the 1.04% gain yesterday is HUGE.

IMAX – Imax Corp. (3D)  Sold at/near open for 35.65. -2% loss

TZA – (3 tomes short small cap stocks)

Bought 1/2 position in TZA (3x short small cap stocks) at 38.65 on Tuesday   Added another 1/2 position to TZA at 39.75 at/near open yesterday

Will consider adding another full TZA positions on a moderate market rally. Otherwise will add a 1/2 position in TZA on minor rally.

The US stock markets have stapled a message in the head of Fed Chair Ben Bernanke. - We are not going to buy until you give us more liquidity/stimulus.

The question becomes how low can you go?

Repeat - Therefore Strategy is clear -

• 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 SLV, NLY, & TZA -

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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

The Nobel Prize

Many of you commented directly on this when it was posted yesterday in the comments section. The start of an editorial by Nobel Lauriate  Peter Diamond.

“LAST October, I won the Nobel Prize in economics for my work on unemployment and the labor market. But I am unqualified to serve on the board of the Federal Reserve — at least according to the Republican senators who have blocked my nomination.” –

THIS IS WHY YOU NEVER VOTE REPUBLICAN.

Read the full NYT editorial here - LINK

Popeye

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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	-0.50%	Up
NASDQ	-1.11%	Down
S&P 500	-1.08%	Up
Russell 2000	-1.59%	-

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Technicals, Fundamentals & Analysis

• The McClellan Oscillator chart is at -57.79 just 2 points shy of oversold – expect a rebound at least in the AM. However , before this is all over and the Fed caves in to more liquidity expect the MO to reach numbers like -100. The MO chart, just like major US indexes is a series of lower highs and lows.

• Last night CNBC’s  Jim Cramer went bearish on stocks. One reason he used was US politicians wrangling over debt crisis. (Thanks to Jim J for his comments on this.)

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How To Protect Your Money

In a Bear Market

• You can be in cash, but that will return almost nothing
• You can be in bonds – treasuries under 3% for 10 years
• Your home value are going down so real estate isn’t great
• You can be in stocks and watch them sink or perhaps grow. But that’s a guess.

Yuck – Not very palatable

A Hedge for Dividend Stocks

Let’s assume we do have a bear market.  Here’s the hedge I am using for dividend stocks. Over the past months I’ve listed a group of dividend stocks that have a second stream of income between 4% & 19%. Let’s say you’ll make an average of 7.5% on these high dividend stocks this year – Not bad if we remain in a bear market.

Here’s what to do in a bear market to preserve you capital when the prices of the dividend stocks decrease. Remember last year after QE #1 ended- we dropped over 15% on the S&P and we could do the same or worse as QE #2 ends. There are two (of many) hedges that Investors411 is recommending to cushion losses in price while you still get the dividend.

1. TZA – This ETF is 3 times short the small cap index. The plus on TZA  is  it gives you the most volatility for the least price. Its not 1 or 2 times short small cap stocks, but 3 times short the most volatile major index – small cap stocks. The minus is it gives the most volatility for the least price. Example – yesterday the S&P was down 1.08%, but the TZA was up 4.79%
2. SDS - This ETF is two times short the S&P 500. The plus is it has more stability (less volatility). It is only 2 times short a more stabile S&P 500. The minus is your going to have to spend more dollars to compensate for losses Example yesterday S&P was down 1.08 and and SDS was up 2.15%

One was to calculate a more accurate hedge is to total the price losses of all your dividend stocks yesterday. Then choose some sort of balance ratio between that total and TZA or SDS

Example – Let’s say your total loss of all the shares of dividend producing stocks you own was 0.50% yesterday. Lets say the total  you have invested in dividend stocks was 100 k (I’m using round figures so its easy) Therefore you lost – 100k time o.5% = $ -500.

• TZA – Is at almost $40 right now and went up almost 5% (4.79%). 100 shares of TZA at $40 gaining @5% = @$+250. 200 shares of TZA or $8,000 = $+500 and that would protected @almostall of your 100 k of dividend stocks yesterday
• SDS - Is at @ $22 right now and it went up over 2% (2.15%) yesterday. 100 shares at $22 gaining @ 2% = +$44. 1100 shares of SDS or @ $22,000 = @+500 and that would protected almost all of your dividend stocks yesterday.

CAUTION – These two choices are going to move in the opposite direction of dividend stocks if we have a major move of another 10% down. But the ratios presented are NOT going to remain as balanced as they are above. They will fluctuate.

Perhaps the best way to go is to protect @ 1/2 your dividend stocks immediately and wait for a rally then protect more. Use both SDS & TZA or even another short ETF. There are many many possibilities.  When to sell tomorrow.

JS & The Critic

If you follow the comments section of the blog both JS & The Critic have used similar methods of having a hedge or buying insurance to protect their dividend stocks in a down market. They use a more conservative SDS (2 times the S&P) Both are simply protect the price of their original investment in what appears to be a bearish market ahead.  I do not know how much of their principle they are protecting- 100% on down. LINK here and scroll down for their comments at bottom

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Paul’s Corner

BOLLINGER BANDS

Today a brief look at the Bollinger Band and how it can be used to monitor your stock and provide entry and exit signals.  For your review, the Bollinger Band Basics PDF:

LINK

After a quick review of Bollinger Band Basics here are Your Stock List members with comments with respect to the Bollinger Band.

• ADTN basing after down trend

• ALTR basing

• ABC basing at bottom of band, 3 green candles looking  to turn up

• BIDI In downtrend, fell back from middle band, not buyable

• BEXP downtrend, failed rally, at bottom band, not buyable

• CPHD basing after uptrend, excellent chart

• IMAX uptrend, great tight chart

• JNPR broken stock after downtrend, NOT buyable!

• KSU in uptrend, loose chart

• LYB in downtrend after nice uptrend. Peaked the day it was introduced to YSL!

• POT rotten wide chart, in downtrend, sitting on middle band as support. Maybe a turn here.

• PCLN starting downtrend after a nice run.

• RNOW basing after good tight chart run, watch!

• RVBD nice short uptrend after basing, broke down through middle band Monday, not buyable at the moment.

• SAP What does this chart look like to you?

• SKWS Look out below!

• SPRD in downtrend, dropped below lower Bollinger band Monday, NOT buyable!

Ok a little different way to evaluate Your Stock List, your thoughts to using the Bollinger Bands?

So it’s Tuesday morning what’s the market going to do today? Let’s load up Quote Tracker………here we go folks another day of fun!

All of these observations made from the charts dated Monday June 6, when the market opens this morning at 9:30 EDT all bets are off! Remember, you are responsible for your investment decisions, and I am not.  Please do your diligence, and please take ownership for your actions.

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Positions

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

SLV/AGQ (very roughly 2x silver) Sold 1/2 for +3% profit. Have a sell order in on balance for 3% loss. (see Friday’s comments section of blog.)

REMX - (Rare Earth metals) Investors has a 1/2 position in this ETF

NLY - Annaly Capital Mgt. Ultra high dividend stock.

Plan to buy TZA in rally to protect above long term positions. 1/2 the usual amount. If markets continue to fall will add more high dividend stocks and TZA or SDS.

Disclosure - I own SLV, NLY, REMX, & IMAX (the later should have been in  Investors portfolio – May add it today.)

Thanks for all the praise on calling the market turning South. But its still premature until we hit at least a 10% correction.

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Longer Term Outlook

NEUTRAL/CAUTIOUSLY BEARISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Mark Haines

YOUR Comments

Once again YOUR Comments is perhaps the most interesting/informative part of the Investors blog. Everything from investment concepts to political editorials/trends is covered there.

Of special note is a tribute to a tribute to legendary financial reporter Mark Haines who died yesterday started by JS

Link Here (scroll down to read comments)

Today’s from comments has another editorial from Yankee Bob.

Never in my wildest dreams could I envision a Party that is as anti-American as the GOP is They have served themselves up for sacrifice IF AND ONLY IF THE DEMS CAN ACT AT LEAST A LITTLE LIKE THE PARTY OF FDR ….

1. Raising taxes. They won’t raise taxes on the rich or corporations but they WILL raise taxes on services they hate like Abortions Why can’t we have a minimim corporate tax that they can’t squirm out of or why can’t you tax corporate profits earned in the US. You want to declare yourself as owned offshore,..fine. But why can’t your US revenue be taxed here except  that the GOP will be against it.

2.  They are against gov regulation. Disaster in the Gulf. Disaster in Massey Mines. Disaster on Wall St. That’s what less regulation gets you.Their willfull desire for less regulation brings death from food pathogens

3. They are actually clamoring for lifting rerictions on child labor. It’s astonishing. What would that be for except to lower wages.

4. they are against ending the Wars.The Wars that waste trillions of dollars with absolutely NOTHING to show for it. Iraq is still a mess,and Afghanistan is still little changed. If those trillions had been spent on Domestic Infrastructure, then we would  have low  unemployment and a booming economy and good roads,bridges, dams,schools,parks mass transit . The money was spent on GOP wars. We have nothing to show for it but a bloated deficit and a bad economy.

It doesn’t have to be that way but,the GOP demands it. The same money spent on domestic infrastructure,education,transportation  alternative energy projects, and healthcare would have transformed the us into a vibrant dynamo. Couple that with increased tax on the wealthy and making corporations actually pay their share, reducing the defense budget would balance the budget.

Do you realize that the Defense spending has doubled since the fall of the Soviet Union? What a waste! Do you feel safer. Any nut with a pack of matches can burn most of the West but we spend billions on anti-terrorism. On What. Air cargo is still not inspected. Incoming cargo in our ports is scarcely looked at. If the terrorists are so plentiful and represent such a grave threat,…then they certainly haven’t done much.  My dog shows more ambition and determination then they have.

Yankee Bob

Systemic Risk That

Threatens Global Economy

Japan- The amount of radiation spewing from the broken nuclear reactors will soon top Chernobyl. Yesterday had the highest readings yet recorded from reactor #1

Europe’s weak economies – The financial stability of these countries keeps growing - Story LINK

The problem here is the trend. News keeps getting worse and the solutions used to fix the wounds don’t always work.

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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	+0.31%	Down
NASDQ	+0.55%	Up
S&P 500	+0.32%	Up
Russell 2000	+1.30%	-

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Technicals, Fundamentals & Analysis

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Shorter Term Forecasting Indexes

There are hundreds of forecasting tools, – These two tools have worked

When they stop working Investors411 will use other Indexes

• The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar was flat yesterday -0.01%.  Since late April we have been in a bullish trend and established two higher highs and now a higher low. The dollar is the key index to watch and has a strong inverse correlation with socks. Trend for stocks = Bearish/Neutral (More Bearish than neutral)
• McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] MO was basically flat. Closing price  -28.43 Yesterday Investors411 mentioned that stocks in April bounced off a low of just above -50. The same bounce seems to have started now.  Short term trend = Bullish/Neutral

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Paul’s Corner

As expected we had a bounce Wednesday. Silver up another 3.2%, US Oil up 1.7% and the Russell 2000 Small Cap Index up 1.3%  The S&P 500 up 0.3%. The small caps, aka “risk trade” lead they way. The oil stocks are moving up once again. Most indexes where up all afternoon and volume a bit higher than normal which is good. Is this the end of the correction or just a bounce?

The following group indexes all were up today with a decent move up through their Bollinger bands.

• Trvl&Leisr-Gaming Index (INDEX)
• Health-Products Index (INDEX)
• Office Supplies&Equip Index (INDEX)
• Comp-Educ/Enter Index (INDEX)
• Health-Instruments Index (INDEX)
• Retail-Jewelry Index (INDEX)
• Chem-Speciality Index (INDEX)
• BusSvc-Cml Printing Index (INDEX)
• Comp-Financial Index (INDEX)
• Health-Dent/Med Sup&Svc Index (INDEX)
• Health-Bio/Genetic Index (INDEX)
• Constr-Mobile/RV Index (INDEX)
• Retail-Mail Order Index (INDEX)
• Comp-Networks Index (INDEX)
• Container Prod Index (INDEX)
• Hsld-Furn/Office Index (INDEX)
• Enrg-O&G Equip Index (INDEX)
• Chem-Fertilizer Index (INDEX)

Here is how Your Stock List looked at the close yesterday.

• SPRD jumped 8.6% closed on the 50 DMA
• LYB up 4.63% with the oils, closed above the 50, buyable
• BEXP up 4.44% with the oils, below the 50 above the 17 buyable
• CPHD up 3.75% closed above the 17 in buying range
• KSU up 3.3% mostly white candles the past 8 days, all green indicators
• POT up 2.68% Below the 50 chart does NOT say buy at the moment
• RVBD up 2.57% above the 17
• PCLN up 1.61% chart still breaking down, most indicators red
• ABC up 1.49% sitting just below the 17, basing
• ALTR up 1.46% below the 17, above the 50 basing
• RNOW up 1.32% below the 17  and the 50
• ADTN up 1.27% appears to have settled down into a basing period, at the 50
• SKWS up 0.32%, not buyable, on the 200
• SAP up 0.35% broken down below the 50
• JNPR up 0.14% Woof!
• BIDU up 0.28% the mighty BIDU appears to be breaking down, NOT buyable
• IMAX down 0.04% sell off with a hammer candle stick, usually a bounce after a hammer.

So what’s the market going to do today? Let’s load up Quote Tracker………here we go folks another day of fun!

Chart review is for education and NOT a stock recommendation.  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

SLV and AGQ had another excellent day. Often, technically,  when stocks/ETF’s gap higher for the third time in a row it means exhaustion or they have temporarily run out of buyers. So if silver again gaps higher at open you could see a reversal. Very tempted to take 1/2  the profits into rally and let the rest ride.

Disclosure – I have a long term position in GLD for a senior center account I manage  and member of my family. I also own some SLV from a covered call position bought over two months ago. I own every position in the hypothetical Investors portfolio which now consists of SLV & REMX

Caution - AGQ (2X leveraged silver ETF) does not exactly tracks silver. There are opening and closing distortions. Contact me if you want to know more. Same for ZSL(double short silver) DGP is double long gold – for those that like great risk

Last warning on YSL.

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Check out the advice, recommendations, analysis by bloggers on stocks,politics and trends in the comments section of the blog Many of the best concepts regarding YOUR Financial Future are discussed their. Watch for Paul’s Corner every Tuesday and Thursday

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Longer Term Outlook

NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Reagonomics/Democracy

Paul Craig Roberts is one of the founders of Reaganomics and on Max Keiser’s show (video) had the following to say about the global financial crisis.

The Money Quotes -

“The west prides itself that it is the standard for the world, that it is a democracy. But nowhere do you see democratic outcomes: not in Greece, not in Ireland, not in the UK, not here, the outcomes are always to punish the innocent and reward the guilty…

There is no democracy, there are oligarchies, some of these smaller European countries are not even run by their own governments, they are run by Wall Street…

Revolution is the only answer…

We are confronted with a curious situation. Throughout the west we think we have democracy, we hold ourselves up high, we demonize China, we talk about the mafia state of Russia, we talk about the Arabs and so on, but where is the democracy here?”

Just how far to the radical right this nation has turned when the founder of Reaganomics tells us China has more democracy than the USA and calls for revolution.

Your Comments

• Too Big To Fail lived up to its promise on HBO last night with  A little too much spinning of bankers and Paulson who caused the crisis as heroes. But the postscript was most alarming. Now interconnected shadow banks are even  bigger – only 10 banks have 77% of the capital in the USA. Of course there are no serious pieces of legislation to prevent what happened from happening again – the last minute intervention to prevent the meltdown of the world’s financial system

• Yankee Bob has another editorial (Link and scroll down) The money quote – “What Bush and his gangsters did is too important to ignore. And to ignore it is to allow the precedent to stand for future use.”

• Jim J has a link to a 60 Minutes Interview of Tom Drake (use above link to read other comments on this) Popeye money quote – One big reason 911 happened and Bush never got bin Laden is because of the corruption and mismanagement of the NSA. They had a $3 million dollar program that the whistleblowers [Drake} wanted, but decided to go with a $1.2 billion program sub contracted to private industry that didn't work and had to be cancelled in 2006.

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	-1.05%	Up
NASDQ	-1.58%	Flat
S&P 500	-1.19%	Down
Russell 2000	-1.81%	-

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Technicals, Fundamentals & Analysis

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Shorter Term Forecasting Indexes

There are hundreds of forecasting tools, – These two tools have worked

When they stop working Investors411 will use other Indexes

• The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar rose SIGNIFICANTLY  AGAIN on Monday +0.68%. The Dollar bulls  are back, and momentum could carry the dollar higher and stocks lower = Bearish
• McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] MO fell to -49.17 This is almost exactly April’s low although March’s low reached -90 US stocks moderately oversold = Bullish/Neutral (trying to show a lot more bullish and just a tad neutral.

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Paul’s Corner

Paul’s Corner

Buy and Hold, Dividends, Better Stocks?

As we all know these past few months have been tough to make money trading stocks, I don’t care who you are, it’s been tough. With the stomach wrenching moves of the market of late folks have been asking for “longer term better stocks” and “dividend stocks” thinking that is what is needed so your lunch doesn’t turn into a bad meal at Taco Bell.

Last fall when Your Stock List 3 was introduced, the stocks sat still for a few weeks and then at the start of September the market took off on a wonderful bull run and YSL 3 enjoyed the ride with a very good gain. As they say “a good time was had by all“.

Several of the stocks didn’t make the ride so a few were dropped and a few new member requested stocks were added and the new list was introduced about the same time the market peaked and immediately took a 7%  correction.

Since then due to market rotation, the run and decline of the oils, the collapse of silver etc, the market and YSL 4 has essentially been flat. So is YSL dead? Is the market dead? Of course not, most of the YSL 4 charts actually looked quite good until yesterday’s sell off and the market does what it always does, it baffles one and all and will continue to do so for years to come.

So what has changed in “Your Fathers Stock Market” so we can no longer buy and hold? Be an investor rather than a trader? Well as much as I like to joke about Jim Cramer and his lousy recommendations (Say silver a few weeks back) he had a very good video last week about what  the market is now and what has changed since your dad selected his latest pick with a pencil circling a stock symbol in his favorite news paper.

LINK

So do we complain the good old days of buy and hold or over, or do we get with the program and realize paying attention, has replace complacency?

YSL 4 chart reviews will be made as necessary and added to the comments section as the week goes on so check over there from time to time.

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Check out the advice, recommendations, analysis by bloggers on stocks,politics and trends in the comments section of the blog Many of the best concepts regarding YOUR Financial Future are discussed their. Watch for Paul’s Corner every Tuesday and Thursday

_________________

Longer Term Outlook

NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Photo Democratic Congresswomen

Gabrielle Giffords

“A Jewish Democrat congress women who had voted for Obamacare, against the controversial [Arizona] immigration reform, and had her offices vandalized was shot in the head along with 9 others by a 22 year old white male who listed Hitler’s Mien Kampf as one of his favorite books. She was holding a political rally.”

Congresswomen Giffords is holding on, but 6 others are dead, including a Federal Judge. Thanks to EWanapat for the heads up on this story (see comments section of blog)

The Huffington Post is running live updates on her conditions (shot in the head) and the story. NYT has the Arizona massacre  as its lead story – In Attack’s Wake, Political Repercussions

Sheriff Clarence Dupnik: Arizona ‘Mecca For Prejudice & Bigotry’ There are some obvious political overtones emerging. Several of you have suggested in the comments section that Violence, bigotry and fear is a significant problem that America needs to address.(more tomorrow)

Barr

Simon Johnson

The Christmas Can Can

Great Fun Video, Unfortunately when there is usually a 20 second add when over a million people see a You Tube video. (Thanks to MW for the video)

Chest Thumping – Koreas

North Korea says its ready for a nuclear “Holy War.” and South Korea vows “merciless counterattack” if attacked again. South Korea launched a “major land and sea exercise” today. Reuters Story

Obama and 2011

In the comments section of the blog both JS (who predicted START would pass) & EW have been supporting Obama as a realist and pointing to his accomplishments in the lame duck congress. Here’s part of EW’s comment yesterday -

“Let’s look at Obama’s results beyond the Tax Compromise.

1) After 17 years DADT legislation passed
2) 19 judges just put on bench (some held up for over 6 months)
3) Republicans withered and First Responders Act passed
4) START just passed 71 to 26

Now tell me you’re not happy voting for Obama instead of McCain/Palin.”

Its hard to argue with their logic, but a different, not  opposing, point of view from Simon Johnson in Bloomberg – “Tax Cutters Set Up Tomorrow’s Fiscal Crisis.” Johnson argues

“At this point, we will have only two choices: Raise taxes or cut spending…. But there’s a problem. The U.S. government doesn’t take in much tax revenue — at least 10 percentage points of GDP less than comparable developed economies –and it also doesn’t spend much except on the military, Social Security and Medicare. Other parts of government spending can be frozen or even slashed, but it just won’t make that much difference.”

So, since we’ve announced no tax cuts for the next 2 years -

To avoid the impending fiscal crisis we cut grandma and/or the military.

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	+0.23%	down
NASDQ	+0.15%	down
S&P 500	+0.34%	down
Russell 2000	+0.01%	-

Technicals, Fundamentals & Analysis

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

• Typical melt up in light/abysmal volume. Nothing out of ordinary, especially in holiday week
• Everyone’s bullish. You can’t help but come across article saying the sky is falling because there are too many bulls out there.
• As Investors411 has repeatedly stated a whole lot of money has come out of Treasury Bonds recently (10 year T bill), but the abysmal shows its NOT going into stocks.
• There are some, (I think a bit better case) who think the strong bullish sentiment is nothing to worry about.
• And the bulls that think the NASDQ will run to 3000 next year
• All major indexes again at new highs for the year.

Reading The Tea Leaves -

Dark Clouds

Admittedly there is a good chance that we will go on marching ahead with the slow melt up. Investors411 has repeatedly descried the conditions that have set this in motion. They still exist. Old Wall Street Phrase – “Markets can remain irrational” longer than you can stay solvent”

But no one went broke taking profits and there are some short and perhaps long term dark clouds on horizon

• BDI is falling too rapidly
• MO is at a 6 week high (short term drop possible)
• Rising yields on the T Bill or Treasury bonds (not critical yet, but going in wrong direction)
• Rising oil prices. (not critical yet, but going in wrong direction)
• Koreas (see above)
• Too many bulls out there (see above)

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Positions

• EEM - (Emerging Markets ETF) -1/2 positions sold
• #1 UWM - (2x small cap stocks ETF) -
• #2 UWM
• EUO – (double short the EURO currency) Bought Friday at 20.76

Selling the rest of EEM this AM (about a 3+% gain) and 1/2 of the first UWM position. (about a 9+% gain) No one went broke taking profits. UWM is just too over extended, so taking some off the table and EEM is under performing US markets & the BDI sinking too fast. Investors411 did hold onto this position for over a month, sorry about it not being longer.

TYH - (3x techs) is a position that is not as over bought as UWM right now. Would consider it on a larger dip.

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)-

Tom Friedman Pulitzer Prize winning NYT Editorialist

The Strike Out

The Date – June 29th 2005

The Editorial - The End of the Rainbow – Ireland

Ireland adopted an unbelievably lowest corporate tax rate of 12.5%, America’s shadow banking and casino capitalism (AKA free markets). Tom does an Irish jig for joy over what he sees as a bright  future. Tiny Ireland now needs a gigantic EU bailout and austerity to just survive

The Home Run

The Date – December 1st 2010

The Editorial – From WickiChina – China

What the Chinese officials on their way to world economic domination would be saying about our self destructive government and media if WikiLeaks. At first I laughed then it was just sad. A sample  -

There is a willful self-destructiveness in the air here as if America has all the time and money in the world for petty politics. They fight over things like — we are not making this up — how and where an airport security officer can touch them. They are fighting — we are happy to report — over the latest nuclear arms reduction treaty with Russia. It seems as if the Republicans are so interested in weakening President Obama that they are going to scuttle a treaty that would have fostered closer U.S.-Russian cooperation on issues like Iran. And since anything that brings Russia and America closer could end up isolating us, we are grateful…

Well worth reading and passing on to your friends,

START

Strategic Arms Reduction Treaty (Part 2)

YOUR Comments – Yankee Bob is back and you can read his full comments by linking to yesterday’s blog. Here’s how he starts

There was nothing heroic about Ronald Reagan. He declared war on the government and did much to land us in this deregulated un-unionized social welfare state for the rich and corporations. Beyond the petty politics he was a murderer. He gave funding ,training, aid and comfort and the green light to Death Squads all over Latin America. He condoned torture and murder without due process to further his political agenda…

Jim J concludes

I understand that the joint Chief of Staffs all support the new START treaty. What happened to Republican patriotism?

Paul R on START

I don’t recall who recently said it, but when asked about rep support for START his comments were “sure, but we need to modernize the military first”. “Military” Republican stimulus plan

START – Part 3 (tomorrow)

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	+2.27%	up
NASDQ	+2.05%	down
S&P	+2.16%	down
Russell 2000	+2.22%	-

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Technicals, Fundamentals & Analysis

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

World Stocks - December has historically been the best or outstanding month for stocks.

USA – Today is confirmation day for yesterday’s rally. If stocks can come close to holding onto their gains or improve on them the rally gets confirmed. This more often than not means our newly born bull will continue to grow. The big news is still Friday’s jobs report. Built in are expectations of improvement.

Europe - Early in the day there was hyped news that the US Treasury was going to help Europe with its problems – later it was denied.

Emerging markets – EEM the ETF for emerging markets was up +2.87% yesterday. Good news especially for long term investors is that emerging markets outperformed the major US indexes. USO – (oil ETF) another rally leader +3.22% UCO (leveraged ETF 2x oil +6.20%) When energy prices move up it often not only reflects economic expansion in USA, but increasingly emerging markets.

Reading The Tea Leaves -

The “Good News” from yesterday was - Trend exhaustion  -49 on the MO shows we are technically reaching a point where there are fewer and fewer sellers out there.

Congratulations to several of you who recognized how over sold markets were getting and took the risk by buying the dip on Tuesday.

Ideally you’d like the MO over -60 but The Critic (see comments section of yesterday’s blog) is right – generally – the lower the MO goes the better your chances are for catching an oversold bounce and a more successful longer term trade. Her statement from comments section -

“So I buy when the MO is at -50. There’s much more room from -50 to +100 than -50 to -100. The odds may not be perfect, but they are in my favor.”

Also -The McClellan Oscillator (MO) and other forecasting tools are far more related to broader Indexes or ETF’s than individual stocks. Example - Paul R points out how over extended both DECK & IMAX are right now in the comments section.

How you play the MO and other  forecasting tools depends on your level of risk. The Critic uses leveraged ETF’s (EWM, SSO, UCO & TYH) as part of her portfolio and although she has NOT announced it in the comments section she has done quite well. TYH was up +6.53% yesterday. If she bought near the previous day’s low the total gain was +10% She also has a diversified portfolio of long term assets and uses YOUR Stock List.

Direxion and ProShares are the two companies that offer leveraged ETF’s. See POSITIONS section for blog for links. Obviously something that’s leveraged 2x is less risky than most 3x leveraged funds.

Bottom Line – As I stated in the comments section – This big a move off a retest of a major support level. It usually indicates that the rally will continue. (This Retest = Price moves down to support level,  remains above the support level for a period of days (9 days), then falls back down and retests strength of the support level. It held. Then, in one day stocks moved higher than the higher of the previous 9 days – A breakout. = Bullish

Positions

• EEM - (Emerging Markets ETF)
• UWM - (2x small cap stocks ETF) This is now up over +7% since it was bought @ 10 days ago. Once a leveraged ETF goes up 5+ % I usually sell 1/2 or put a tight trailing stop on that 1/2 of @2% on it each day. I’ll do this today.

From Yesterday – This means at least a short term oversold bounce. And what a bounce it was.

Long Term Investors - Mea Culpa – I like the odds to be more in our favor before making major long term investment. So I did NOT put out a clear BUY signal. However realize if you can tolerate the risk -60 on the MO is NOT a line in the sand and like The Critic you don’t have to wait.

THE PURPOSE OF INVESTORS411 IS TO EDUCATE YOU ON HOW TO USE SOME BASIC FORECASTING TOOL AND ACT ACCORDINGLY. Stock Markets are moving faster than ever before and by the time I get the information out it sometimes has gone stale. Also I’m NOT watching stocks move all day and sometimes ignore markets entirely. THEREFORE, USE INVESTORS411 AS AN EDUCATIONAL TOOL - If you have a problem I will answer your email ASAP.

Investors – A -15 on the MO still gives us some wiggle room. Considering UCO and more UWM on a dip today. This is a higher risk trade/investment.

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.” -

Lets do some math. To jump star the USA economy. (Compare with a country like China that’s trying to slow down their economy) the US has $700 TARP (almost all paid back with interest), $787 Obama Stimulus, $1.7 trillion of QE #1, other billions/trillions the unaudited Fed loaned out at almost zero% interest and now QE2. (guesstimate $500,000 billion & more later.

Most of this funding has gone to the shadow banks and to help consumers impacted by the 2008 meltdown.

The most remarkable part of all this is the huge amount of money that’s had to be used to just stabilize the US economy at a 9.6% unemployment rate and a 2% GDP. GDP would easily be below zero without it. Yet there are those on the far right who would allow shadow financials and all Americans to become over leveraged again.

Jon Stewart Rally

Politico said there were 250,000 (impressive) at the Rally to Restore Sanity in DC this weekend. Here’s one voice on the rally His closing speech at the above link. Well worth the read.

Mantra - “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. “Looks like next Wednesday Fed meeting is the big event.”

Managing Risk - Lots of YOUR questions in the comments section are on Managing risk (When to invest)

• Ideally we’d like the Long Term Outlook to be Bullish, the market over sold (MO at or below -60) and the dollar’s long term trend – bearish & the BDI to be bullish.
• It seems highly unlikely we are going to get all three at the same time. If we do I’d jump.
• What you do depends on YOUR level of risk
• Right now the dollar rules and which way it breaks will probably have a lot to do with the future of stocks.
• The Long term Trend is – CAUTIOUSLY BULLISH.
• The MO is below zero.

So its not a perfect set up, but it is slightly favorable . The dollar is the key factor & it has NOT broken out of its range. I’d say the Tea Leaves right now are slightly bullish. If you can handle the risk invest. A dollar dropping below its support level and an/or an MO nearing oversold (-60) would be better.

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.”