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Illustration by Victor Juhasz

Note – No Updates for rest of week

Health Care

Democrats are touting unanimity on a health care proposal that will cover more people. LINK

A step in the right direction. However, this is a huge disappointment for those of us who see every other industrialized democracy have some sort of public health care option. The voters of these (a couple dozen)  countries have voted to KEEP this option because like public education it works .

Something is better than nothing, but this is a clear victory for capitalist greed (the kind that creates economic bubbles – in this case rising health care costs and not covering 50 million of our fellow American men women and children over what’s best for the common good.  Another win for Greed is good unregulated capitalism

Education – Yikes

"A report by the American Association of State Colleges and Universities indicates that the US is one of only two nations on Earth in which people aged 25 to 34 have lower educational attainment than their parents. " LINK Again, over decades we have cut funding for education relative to things like executive or CEO pay. Another win for Greed is good unregulated capitalism.

The Ugly Economic News

(continued from Good, Bad & …)

It simple – We have failed to fix the problem that created a meltdown or build further bubbles .

In underfunded education, not fixing Health Care, & and failure to fix our financial system – unregulated capitalist greed growing.  The overextended, nation building empire’s decline is accelerating.  Other countries have growing middle classes and ours is shrinking into a society of haves and have nots.

Tom Friedman & other more responsible capitalists have joined those of us who have been beating the drums of our crumbling structure and ways to fix it. But right now we are Married to the Mob of capitalist who simply put GREED first.

The Great American Bubble Machine – by perhaps the best economics reporter out there Matt Taibbi LINK

Bottom Line in Investments The reason Investors411 has a five year winning record in investments is in choosing countries and sectors that  are building their middle classes and by paying careful attention to the destructive (bubble building) aspect of US  unregulated capitalism/greed.


KISS & STOCKS

Keep It Simple Stupid

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -1.00% up
NASDQ -0.76% up
S&P500 -1.03% up
Russell2000- - 0.97% -

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

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

Technicals, Fundamentals & Analysis

The dollar rose a significantly Tuesday and stocks fell (see $USD below). Tuesday -  The fact that the dollar went no where and stocks went nowhere means the dollar’s inverse relationship to US stocks is back on. The dollar is still the #1 forecasting tool.

Volume Our former #1 forecasting toll was up and at or above average. Rising, above average volume is a bad sign for bulls when the price move is above 1.00% . Yesterday was boarder line – but short term volume indicates momentum is probably with the Bears

The McClellan Index - is also a very significant tool in when to (more) safely buy and sell. Right now there is no clear signal either way, (see below)

If you don’t understand a term look in up at Investopedia.com dictionary LINK

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Significant forecasting tools/Indexes for stock markets

(Besides #1 Volume & #2 Reaction to News)

BDI The Baltic Dry Index measures the flow of goods by price (world trade) .

The BDI a fell a significant  -134 points yesterday and closed at 3902. Technically  the BDI broke out through its major resistance level 4291 (this year’s high) over a week ago.  The BDI has rallied about 1700 points since late September.  Multi day moves in one direction are common. We are within 100 points of a support level. Breaking that level would be a short term bearish signal

What it means – Long term we created a higher high on the chart = Bullish. The BDI is far more useful as a long term indicator of not only world trade, but specifically China and growing emerging markets.

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The Dollar is currently the #1 forecasting tool .

$USD - Check out the 6 month chart (to the left) or a multi year chart of the US dollar of the US dollar. Mantra Dollar up = US stocks down & Dollar down = US stocks up US dollar was rose yesterday +0.58% . Anything close to or over +/- 0.50 is significant  The dollar closed at $76.22 . We have broken up through the 50 day moving average resistance level and the Oct/Nov high around $76,82 is the next important resistance level.

The whole dynamic  here seems to have changed – We now, at least for the short term, have a rising dollar

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$NYMO The NY Stock Exchange McClellan (EOD) Index measures how much the NYSE is oversold or overbought .

The index closed at -2.01 This is a Neutral Position . This chart is showing we seemed to have reached a plateau. It’s spilled over a little bit, but the McClellan index has moved between +25 & -25 .  There has been no clear buy or sell signal for over a month.  Oversold conditions (@ -60) = buy, Overbought positions (@+60) = sell

The closer we get to +/- 60 the better our chances of making money with a shorter term buy/sell signal

Bottom Line There is no clear buy or sell signal. So its best to just stay put for a while.

Positions

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

(again a little behind on latest moves)

We’ve had, and volume has confirmed, a quantum shift in markets. This may be temporary and it may be long term, but it necessitates major changes in positions. – looking for dollar to hold or add to gains . – This happened or was confirmed yesterday . Will wait to buy some ETF’s and stocks when McClellan Index says we are approaching overbought (@+60)


Recommended ETF’s and Trades

SELLING & BUYING

Waiting for a clear signal from MCellan Index to commit additional capital or sell existing positions. Have FXI (20% of portfolio), EWZ, (16%) MOO (10%) and for traders a very small position in BAC (1 to 2%)

Start small & Build your position – Buy the dip.

Long Term Outlook = CAUTIOUSLY BULLISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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