Jan. 25: President Obama addresses Congress during his State of the Union Address as Vice President Joe Biden and House Speaker John Boehner listen.

The Trap

Lead story in NYT on Obama’s state of the Union contains one very important word - JOBS

The Trap

Astute political assesment of Obama’s speech from the New Republic’s Ed Kilgore

And that’s the beauty of Obama’s address. He basically put together every modest, centrist, reasonable-sounding idea for public investment aimed at job creation and economic growth that anyone has ever uttered; and he did so at the exact moment that the GOP has abandoned the very concept of public investment altogether. He’s thrown into relief the fact that Republicans no longer seem interested in any government efforts to boost the economy, except where they offer an excuse to reduce the size and power of government.

Obama can close this trap by focusing on Jobs, jobs, jobs. Two significant reasons this works

  • American’s by over 4 to 1 see Jobs and the Economy as the #1 priority
  • Without tax income from jobs, we lack the revenue to to fix the deficit or any other problems.

A political victory that may lead to a “Sputnik” moment of  economic transformation.

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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 -0.03% up
NASDQ +0.06% up
S&P 500 +0.03% up
Russell 2000 +0.09% -

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Technicals, Fundamentals & Analysis

Investors411 record - 6 years of beating benchmark S&P 500

  • We had a the bulls take charge into the close and an overall flat market in heavier volume
  • Rachel Granby on Obama State of Union and today’s market (Seeking Alpha)
  • Obviously, still endorsing the concept that the Fed [POMO [scheduleis and will be the key factor in keeping a long term rally going. (see Investors411 for past months).

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Significant Shorter Term Forecasting Indexes

  • The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar after going much higher  ended up falling a small -0.07%.  The two week dramatic fall of the dollar continues. For stocks this is = Bullish
  • McClellan Index – (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.]  MO fell slightly to -5.15. What may be a bearish sigh (a series of lower highs and lows) has started to develop on chart. = Neutral

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Reading The Tea Leaves

Wall Street publicly is catching up to what Investors411 has been telling you for many months. The Fed is manipulating stocks higher. The #1 factor behind the low volume rallies. It has been this way ever since quantitative easing  fist started a year and a half ago. There is 5 months more of QE 2 scheduled.

  • Mega Investor Jeremy Grantham calls it – Pavlov’s Dog Reading his quarterly newsletter is a must for any serious investor. Pavlov’s Dog is that newsletter.
  • Wall Street Journal’s Market Watch calls it Addicted to Crack

More from Grantham’s Quarterly newsleter – Investor411 has a very similar  assessment of the future See Positions section of blog -“Investors411 looks for a much better first 1/2 of 2011 than a second half especially in US stocks.”

From his Quarterly Outlook

  • the outperformance of everything risky”  on top of his looking forward list.(they have been underperforming for a while)
  • “But be aware that you are living on borrowed time as a bull; on our data, the market is worth about 910 on the S&P 500, substantially less than current levels, and most risky components are even more overpriced”
  • “The speed with which you should pull back from the market as it advances into dangerously overpriced territory this year is more of an art than a science, but by October 1 you should probably be thinking much more conservatively.”

What to watch for today

UUP -The dollar tracking ETF. Two+ week bearish trend continues as rally falls apart. Dollar down = stocks up.

Dow IndexDow stocks historically do about 1/2 what Small caps and techs do in a rally.  They have done better for for a month+.

AAPL –  Up a massive +3.28 two days ago. Confirmed rally with +1.17% rally yesterday. Very interesting that most of the smaller cap stocks in tech did NOT also have big gains. = Big cap stocks rule.


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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).

Current ETF Positions. (oldest held positions listed first)(see comments section where all trades are first announced)

  • DDM - (2x Dow stocks)
  • REMX - (rare earth metals)(1/2 position)

Under consideration - Looking to add more on dip. (see comments section of blog for inter day timing)

DDM - (2x DOW) The trend to big cap stocks is apparent.

UWM (2X small cap stocks) Will buy ASAP, hopefully on dip.

UCO -(2x oil prices) All commodities, are under pressure from inflation worries in emerging markets. UCO broke support level in big way. Waiting for it to settle.

REMX (Rare Earth ETF) –  Rare commodity used in everything from some TV’s to hybrid cars.

FAS (3x financials) & UYG (ETF that does 2x financials) XLF is the financial ETF. - Shadow banks have numerous advantages. – Opaque, special help from Fed and your still on the bottom line to bailout too big to fail institutions.  This sector is being manipulated higher by Fed. Those that can overcome ethic problems with shadow banks could consider buying. Yes, this is another bubble building.

DGP – (ETF is 2X gold)

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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#3)

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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