Pop Quiz Time

Question - In Europe, which has a much greater Muslim population than the USA, what percentage of the acts of political terror were committed by Islamic fundamentalists between 2006 through 2008?

Can YOU come within 10% of the answer?

While your thinking… Here a fun video of the Obama Presidency put to music

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And the Answer is 99.6% are NOT Muslim terrorists.

A Europole Report says only 0.4% are Islamic terrorists. The vast majority of terrorist acts in Europe are committed by “separatists.” For a further analysis including FBI stats on the USA (can you guess the amount here?)and links to similar data see Loonwatch.com

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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 +0.35% down
NASDQ +0.09% up
S&P +0.18% down
Russell 2000 -0.57% -

Technicals, Fundamentals & Analysis

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

US Stock Markets -

See The Dollar War below for more.

The #1 tech stock AAPL fell slightly (-0.33%)still in middle of range.

Mortgage/Foreclosure crisis giant BAC got whacked again (-3.32%)

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar rose +0.32% yesterday. (More below in Tea Leaves Section) Dollar currently moving sideways  Trend for stocks = Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Fell a minor -0.33% yesterday. BDI now consolidating after bull run that began in June. Slight 5 day decline. Longer term Pattern= Bullish/Neutral
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Fell slightly to -7.75 yesterday. Lot of room to move both higher and lower. Location= NEUTRAL

Reading Tea Leaves.

The Dollar War

Volume on the tracking stock for the dollar (UUP) has been three to four times its average for the last three days (4 of the last 5 days) Here’s a chart of the UUP The vertical lines on the bottom are volume.

Some entity(s) have stepped in and proclaimed that they were going to buy dollars in a big way whenever it fell below $77.00. The dollar is know at 77.42.

As explained earlier our Fed is printing and dumping money into the economy and this surplus relative to other currencies drives the dollar lower and has an inverse relationship with stocks, especially those that export.

I do not know who or what is on the bulls and bears side in this dollar war. However the dramatically increased volume shows that a major fight is going on.  Remember currency markets are much bigger than stock markets.

This also impacts commodities which usually move lower as the dollar rises.

I posted the following in the comments section of the blog yesterday -”UUP at 22.47 as I write. Up +0.40%,after being down to 22.30 in the AM. Any move above 22.7 resistance is trouble for stocks. Any move below 22.18 support level is good for stocks” A breakout of either the support or resistance level will tell you who wins the dollar war.

Right now, it looks like the dollar bulls have the upper hand in this war and that’s bearish for stocks. The amount of volume is very impressive. This usually means whichever sides wins, they will control momentum for some time. However the dollar bulls have yet to win.

There’s also a good chance that the dollar war could simply simmer (flatten out in price swings or in its trading range) till the Fed meets or the elections.


UUP continues to be the dollar tracking ETF to watch

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

(I do manage 6 accounts that have other positions)

  • EWS (Singapore)
  • SSO (2x what S&P does)

The dollar war is certainly reason to exercise some caution. I have a stop on the more speculative SSO at what I bought it for.

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.”

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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