Kathy Hochul U.S House (NY-26)

A Tide Turns

Last night as the crowd chanted MEDICARE,MEDICARE, MEDICARE Democrat Kathy Hochul proclaimed victory in a heavily Republican district in her race for congress. THE issue was Republican Paul Ryan’s plan on Medicare. Investors411 has already reviewed Ryan’s unpopular voucher plan that the non partisan CBO says will cost you more and cover less.

Her 5+% decisive win in a district that has a 6+% majority of Republicans is covered by Politico and Huffington Post There was a third Tea Party (former Democrat) candidate in the race who got 9% of the vote, but polls showed as his support tumbled Hochul’s rose.

So Democrats have an issue for the 2012 election. Headline from NYT Democrat Wins G.O.P. Seat; Rebuke Seen to Medicare Plan

None of this is going to matter unless we first educate and find decent jobs for working Americans.

None of this will matter if politicians from both parties keep bowing before a corporate oligarchy that feeds off the public trough to the tune of trillions of dollars. Example – Fed has quietly purchased about $2.5 trillion in toxic assets using Maiden Lane program.


KISS & Stocks

(Keep It Simple Stupid)

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




Index Percentage Volume
Dow -0.20% Down
NASDQ -0.46% Up
S&P 500 -0.08% Up
Russell 2000 -0.46% -



Technicals, Fundamentals & Analysis

  • Stocks added to Monday’s big loss again in light volume. There is a lot of  popular IPO’s this week and this is one reason volume is lacking for regular stocks. Also perhaps the coming holiday. But it does break a pattern of heavy volume declines followed by light volume rallies.
  • You have to start to wonder if the Fed POMO liquidity is now starting to stand on the sidelines, because of the June 30th closing date for quantitative easing. The jury is out on this, but the trend seems troubling for bulls
  • The gold/silver trade is technically back. (see chart) This trade is predicated on fears for the future as well as a whole bunch of speculators and manipulators doing their thing. It’s very unusual a bullish pattern emerges so soon after a climax sell off, so be careful.
  • 1295 is the technical line in the sand for benchmark S&P 500. It is currently at 1313. All major indexes are trading below their 50 day moving averages. Do holding up the best.
  • UUP (the dollar ETF) still the index to watch.
  • Nine reasons to Own Dividend Stocks Investors411 believes diversity should be part of any portfolio. Dividend stocks, as a whole are out performers of the S&P 500. While these stocks can be held for longer periods of time, buying and holding forever is just not feasible because of economic conditions, corruption and the shadow, too big to fail financial system.
  • Reading Tea Leaves –  Getting a little more bearish each day. However still believe and oversold bounce is likely, especially if/as the MO falls below -60 and we reach the 1295 support level.  Right now it looks like any bounce will just be another lower high.


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 fell yesterday -0.34% after two straight days of significant gains. The moderate loss doesn’t make up for the two significant rally days or the week+ long major rally before that.  The dollar is fundamentally moving higher  because the Euro is weakening. 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 was basically flat. Closing price  -48.57 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.



The silver/gold trade is back – If you like high risk,  and can stand a quick 7 to 10% hit, this may be a good trade. Buy The Dip. The CME Group can kill any rally by raising margin rates, so there is added risk. Therefore short term trade.

  • I bought SLV from yesterday as part of Investors411 at 35.09 hypothetical portfolio. REMX other holding in portfolio.
  • Will start to consider ETF’s that short stocks, but waiting for rally/bounce off oversold (see MO) levels.
  • Again a warning for holders of YSL #4. These stocks have a higher beta and tend to do better in bull, but worse in bear markets. Exit positions in any rally.

Disclosure - I have a long term position in GLD for a senior center and member of my family. I also own some SLV from a covered call position bought over two months ago.

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.


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Longer Term Outlook



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