Economic Bottom Line

Imagine if every top narcotics official had a $2,000,000 a year job waiting for them with the drug cartels after they retired. What would happen?

(paraphrasing Matt Taibbi on shadow finance and politics in USA)

That’s essentially what we have in the USA. Not in narcotics, but in finance/business. Not only is the money that oligarchs provide financing political campaigns dominated by business, it also dominates the retirement and appointments of top  ranking elected and appointed officials who are supposed to regulate Wall Street.

Over the weekend NYT’s Joe Nocera published yet another list of Wall Street crooks who are too in bed with our political leaders and the regulatory agencies to even be made to say they are sorry for what happened. (thanks to Popeye for referencing this in comments section of blog)

Charles Ferguson, whose film Inside Job last night won the Oscar for best documentary again stated the obvious – the economic crisis is a multi trillion dollar colossal crime perpetrated on the working-class masses by a greedy few – yet no one goes to jail.

It may infect more Republicans than Democrats, but the far more important point is that self serving corruption dominates BOTH political parties.

In 2008 a great financial and economic problem became apparent. Trillion of dollars has been lost and additional trillions thrown at this problem, yet  unlike other financial meltdowns, no one has been held accountable. Virtually nothing has been done to structurally change or investigate the root cause.

Our politicians can not get at the root cause because they would have to admit corruption and put the powerful status quo at risk of loosing their power. The very power that insures the politician’s election and future wealth.

Jeffry Sachs, of Columbia University, realizes that long term sustainable development is no longer possible in the USA. Both parties are financed by the  big money of the wealthy elite whose lies are shouted at us so thick and fast that we can only hear the drumbeat of propaganda and slogans.

So the malaise of a temporary recovery in the selected sectors of the casino capitalism that befit the wealthy elite continues as different economic bubbles continue to build.

If your one of the financial masters of the universe whose income tops $2 million a year, the rest of us in a globalized world are little more than cows that eat grain, providing milk and eventually get slaughtered. Chinese cows, Indian cows, American cows – what’s the difference? Sometimes the young cows wake up – like in Egypt . They may not win, but at least they had the guts to try.

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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 +0.51% down
NASDQ +1.58% down
S&P 500 +1.06% down
Russell 2000 +2.21% -

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Technicals, Fundamentals & Analysis

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

BUBBLE-ICIOUS - Investors411 term for the stock market – We are all riding on the outside of an ever expanding &  Central Bank manipulated stock bubble.

  • Once again stocks rallied in below average volume. – Same old Fed manipulated stock bubble building reasserting itself as the dominant trading pattern.
  • Libya did manage to disrupt last week. Until the oil fields start burning its impact on stocks should diminish.

Below is a repeat from past Investors411. It will be placed in the strategy section of blog until it is not longer relevant.

  • Mantra #1 - till it no longer works - still endorsing the concept that the Fed POMO [scheduleis and will be the key factor in keeping a long term rally going. Another term for this is quantitative easing or QE #2.
  • Mantra #2 - 50% to 70% of the volume on US stock exchange is soaked up by High Frequency Trades chasing imbalances in trades. This means 30% to 50% of volume is made up or real or valuation investors.
  • You can NOT compare, use many technical tools, or historic data to evaluate this market because it is being manipulated higher by our Fed or central bank and the majority of volume is soaked up by HFT’s chancing imbalances.
  • Two significant reasons allow the Fed to keep the liquidity tsunami flowing - Housing prices are hurting & Unemployment figures are high.

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Shorter Term Forecasting Indexes

  • The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar rose  Friday +0.29%.  Dollar has bounced off a short term support level around $77.  Let’s see if it holds today.  If it falls bulls get the momentum back, but until then= Neutral
  • McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] Rose to to +3.17. Over the last three months the new parameters seems to be +/- 30 as an overbought/oversold level. Note: the +30 barrier has become a very strong resistance point. Stocks outlook = Neutral

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Buy the Dip – Same plate that was served over a week ago is still there.

Reading The Tea Leaves

The same Old Song - But we obviously have a new fundamental factor – revolutions in oil rich dictatorships - This could alter everything. Some truly bizarre statistics that have me very concerned.

  • In times of crisis everyone usually piles into the dollar – They haven’t
  • The Saudi’s promised to make up for the lack of Libya’s supply problem. But you can’t replace “sweet” crude with gunky oil. Strange this is not impacting markets more.

Paul did a great job over last week and called the dip perfectly. As stated many times +/-30 has become the new short term support/resistance level for the MO (see above.)

What to watch today

USO - oil prices

UUP - (Tracking ETF for dollar)

Remember - The dollar is a contrarian indicator. Bad dollar = good stocks

AAPL – Bounced off its 50 DMA support level. As long as it hangs in above that everything OK

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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)

  • UWM (1/2 position, took 5+% profits already)  Stopped out (had a 5% trailing stop on this) at 45.74 for 6+% profit . Total gain @6%
  • REMX (1/2 position, took 5+% profits already)
  • RJA 1/2 position, took 5+% profits already)

Not settled in enough after vacation to make a call on anything except buying oil ETF on dips. Too much global volatility.

UCO -(2x oil prices)  Buy the dip. Why not its a hedge against higher gas prices.

REMX (Rare Earth ETF) – Really believe this a good long term holding.  Hopefully longer term holding. Stop set about 2% below rising 50 day moving average.

DGP – (ETF is 2X gold) .

DBC – (Commodities ETF) For a more complete list of commodity ETF’s see POSITIONS listed at top of blog  DBC is tilted to energy. Perhaps preferable or a good alternative would be *DJP that is more agriculture and metals or RJA (all agriculture)

RJA (Agriculture commodities Index)An  ETN, not an ETF. Hopefully longer term holding. Stop set at @ 2 % below rising 50 DMA.

UWM (2x small cap stocks) TNA (3X small cap stocks)

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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 (at top of page) for lists of potential stocks & ETF’s including ”YOUR Stock List.” (YSL#4 is under construction.)

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!


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