Anyway, not to get into something bigger here, but the global economy will rise and fall on the back of China the next couple of decades.  The demographics are undeniable and overwhelming, I’m talking everything from food, to energy, to consumer goods and industrial goods.  It’s all there.  Europe is screwed for the foreseeable future as they have decided to go the route of austerity, whether they wanted to or not.  You can pretty much cross off your growth list any companies that do a large part of their business in Europe.  Save for a few pockets, like consumer electronics, clothing retailers, education, home improvement, semiconductors, and some industrial machinery, you can pretty much write off growth in the US as well.

Focus on companies doing business in China Brazil and India, the three centers of real growth.  I would even throw in Africa for the more risk inclined, but there really aren’t too many good pure plays there.  The Chinese know that the west is broke, and that the days of their economic ascension based upon us buying their goods is quickly waning.  They need to stoke domestic demand.  Brazil has been pretty successful at doing so, but they are a much different culture, the Chinese are frugal and love to save, the Brazilians, not so much.  Both countries need to ignite their domestic economies, and I believe they will both be successful.  Say what you want about their political leaders, their political systems, blah blah blah, the fact is that both have shown poise and great skill in managing their economies correctly.  You all know my line about the US, we are too big to succeed,  meaning that our political system has just grown too large with too many different agendas to point us in one direct, with one long term vision, with the ability to fix problems and make quick decisions.  Some day the Chinese will run into this problem as well, after they have given their people the political freedoms they will demand.  It will happen, it always happens, it is the natural course of globalization, first comes economic prosperity, then come the calls for political freedom to meet that prosperity.  I have no doubt this time will be any different.  They will choke on their own voices at some point as well, but not for the next 50 years, at least.

So what companies should you be focused on when looking for growth in China.  Think anything that catches the farmer up to the modern world.  They will eat more food, especially meat, they will travel more, buy more heavy goods like washers, dryers, and air conditioners, get a better education, build better houses, and put more money in the bank or invest it…

Think United States of America circa 1920.

Favorite consumer focused  names right now selling in China, Brazil, and India, but mostly China, taking into consideration fundamentals and relative strength:

CTRP, BIDU, CAAS, EDU, HMIN, BRFS, BAP, MELI, CPL, LFL, CBD, VIV, WHR, YUM, LVS, MCD, NKE, AAPL

First, let me reiterate a little bit of my thesis for being long the education names.  There is a secular trend going on here and the fundamentals of these companies look excellent.  The government is trying to send as many people as possible who were displaced by the collapse in manufacturing back to school for retraining.  On top of that, secondary educational institutions have supreme pricing power right now as there has been a surge in demand for education.  Just look at the average cost of a four year private school secondary education, it’s growth has far outpaced both inflation and average income.  Margins for this industry are expanding at a rapid pace and many names were not heavily held by institutions a few months back.

The guys over at Ycharts wrote a great piece on the sector about a month ago, you can find it here, I encourage you to read it.

Technically, both stocks set up extremely well at their entries.  Both were just about to make new all time highs, breaking those from back in late 2007.  These two stocks showed the best relative strength of the group, were liquid, and didn’t trade too wild.

Now, you might be asking, why did I sell out.  I won’t go through each transaction, here’s what I’ll say.  I believe I traded both these names just about as good as could have been traded over this period, minus two mistakes.  In $DV, I should have bought the pullback to the 50 day moving average in early February.  I had made the decision to set my stop under it, and had a lot of fundamental conviction, there was no reason not to go balls to the wall there.  As well, I should have added more the past few days to the position as it was basing above support, I even got loud on the stream about it, but didn’t pull the trigger.  In $CPLA, the pullback to the 200 day moving average should have been bough as I had decided to hold on and set my stop below that level.  Other than those, I can’t complain with my trading, my exits were all good.

The stocks and the group as a whole is getting extended on the intermediate term time frames.  Long term, this is a group that you want to have capital allocated to, it is a secular growth story.  Here are the two weekly charts.

As you can see, both charts are rather far from their major weekly moving averages, but have broken out in a big way.  I want to see a few weeks of consolidation now, time for those moving averages to catch up.  To be sure, the angle of ascent has increased, as it should, this is positive, but some sideways action is needed.  Devry has a history of going on crazy straight up runs without stop stop.  Capella has a smoother track record, pacing itself as it moves north.

Here is the list of tradeable education names, I will be keeping track of these in the weeks and months to come, looking for entries.

Of these, my favorites are $DV, $CPLA, $STRA, $EDU, $LOPE, and $LINC.

I do trade commodities, but I’m sure as hell not an expert when it comes to the fundamental aspects of certain commodities markets.  Take for instance, the grains.  Would someone please explain to me WTF is going on, and why we just saw a massive dump over the past two days.  The major components of $MOO, also known as the holy trinity of cow shit, $MOS $POT $AGU are getting slaughtered.  It only takes one look at this chart to realize why, it’s the $JJG, a basket of grains.

Now, the volume here means nothing in an absolute sense, this ETF means nothing when it comes to moving the grains markets, unlike say, the awful natural gas trading vehicle that is $UNG.  But on a relative basis, there’s obviously something going on here, this isn’t just any sell off in this basket of commodities, someone holding this ETF wanted out, and quickly.

If you don’t have the ability to see futures charts on your trading platform, I highly recommend you take a look at this cool new Finviz tool.  The whole agriculture space is getting whacked, and it still looks bearish.  I own a piece of $CGA, but honestly, I feel it’s more correlated to the rest of the high flying Chinese stocks than the underlying commodities.  As for $POT $MOS and $AGU, amongst others, I’ve decided to sit it out from here unless we see a rebound in grains prices.  There are too many other trending stocks to be getting whipped around in these.

On to the broader market.

I told ya’ll that Tuesday afternoon’s run up was a trap, and so it was.  Mr. Market punched those buyers in the balls this morning by returning to Tuesday’s lows, after which it proceeded to rip higher, closing close to yearly highs.  I didn’t like it, I didn’t like it one bit.

I wanted to see the market puke, I wanted to see some fear, I saw none.  When it became evident that we weren’t breaking Tuesday’s lows, I stepped in and did some buying, reloading on the profits I had taken in $TSL, adding to $V, $MHS, $DECK, and adding new positions in $ALGT and $INFA.  I didn’t want to step in and buy today, I wanted stuff lower, even if that meant taking more pain in the process.

I sold out of $GOOG today, near the highs, with a profit.  I see no need to be involved in this battleground stock right now, there are too many great others.  I will look to reenter at higher prices, and that doesn’t bother me, I want to see the trend stabilize.  I also sold out of $EDU at a small profit, it just wasn’t moving and I was too loaded in Chinese high flyers.  I also sold out of $JCG for a profit, the trend is bending there.

I’m seeing a lot of rotation once again into healthcare and financials, but woooo nelly was that a rip your face off rally in tech today.  The 20 day moving average continues to be the place where you need to buy stuff, just do it.

I’m a little lost here now with the market having filled the gap down from Monday to Tuesday.  I think we’re in no man’s land and waiting for the next signal.  I will sit on my 10% cash cushion and hope to buy things lower, knowing that if we do explode to the upside I will out perform.

I’ve stayed away from the steel sector as I don’t believe we are going to see continued strength from them beyond this push.  I focus the portfolio on stocks that I believe will trend positively for the intermediate term, not just a week or two.  The real money is made by sitting, not trading.  I have not had exposure to coal, and I’m dissapointed about that.  I had a good opportunity to take a position in $MEE at the end of last week but balked, which was obviously a mistake.

My entry on $ARUN this week was perfect, already in the green by almost 5%.  I took off some exposure to $GS as it has traded straight up for a week now.  It was a heavy position, it is now a bit lighter.  $VRX finally woke up this week, patience really paid off there, I continue to like it going forward.  $TSL and $CREE continue to just move up, there’s no other way to describe it, these two stocks are unstoppable.  I have greater than a 55% gain in $TSL and have been peeling off bits along the way, which I guess has been a mistake because I haven’t found a place to reload the boat.  My two retail positions $JCG and $DECK are performing well.  I’m stalking $URBN which is giving a decent entry right here right now.

I will ruminate on the tech exposure this weekend, it may simply be too high.

Below you will find a list of the international names that I believe are investable going into 2010.  There are plenty of tradeable stocks throughout the year, stocks that I couldn’t care less about the fundamentals.  But if you’re an investor looking for solid companies that show earnings growth, here is your list.  All of these companies also exhibit technical relative strength, that’s my style, I don’t do value.

Energy: Petroleo Brasileiro $PBR (Brazil), A-Power Energy $APWR (China), Trina Solar $TSL (China),

Materials: Gerdau S.A. $GGB (Brazil), China Green Agriculture $CGA (China), Yanzhou Coal Mining $YZC (China), Compania de Minas Buenaventura SA $BVN (Peru), AngloGold Ashanti $AU (South Africa), Gold Fields $GFI (South Africa),

Technology: VanceInfo Technologies $VIT (China), Ctrip.com $CRP (China), Baidu $BIDU (China), Sina Corp. $SINA (China), AsiaInfo Holdings $ASIA (China), Longtop Financial Technologies $LFT (China), Wipro $WIT (India), Infosys Technologies $INFY (India), Check Point Software Technologies $CHKP (Israel), Taiwan Semiconductor Manufacturing $TSM (Taiwan),

Consumer: Ambev $ABV (Brazil), Cosan $CZZ (Brazil), China Automotive Systems $CAAS (China), New Oriental Education $EDU (China), Tata Motors $TTM (India),

Industrials: Gafisa S.A. $GFA (Brazil), RINO International Corporation $RINO (China), SmartHeat $HEAT (China),

Telecom: Vivo Participacoes S.A. $VIV (Brazil), PT Telekomunikasi Indonesia $TLK (Indonesia), Turkcell Iletisim Hizmetleri $TKC (Turkey), Millicom International $MICC (Africa)

Financial: Itaú Unibanco $ITUB (Brazil), Banco Santander-Chile $SAN (Chile), Cninsure Inc. $CISG (China), ICICI Bank $IBN (India),

Services: GOL Linhas Aéreas Inteligentes S.A. $GOL (Brazil), Home Inns & Hotels Management $HMIN (China), Grupo Aeroportuario $PAC (Mexico),

Utilities: Companhia Energetica de Minas Gerais $CIG (Brazil), Companhia Paranaense de Energia $ELP (Brazil), CPFL Energia S.A. $CPL (Brazil), Enersis S.A. $ENI (Chile)

Healthcare: Dr. Reddy’s Laboratories $RDY (India), Teva Pharmaceuticals $TEVA (Israel),

I can’t recommend any individual companies in Russia, there is just too much political risk in owning any individual name.  You can own the index $RSX for sure, but Russia is the wild wild west of capitalism, if you can even call it that, it’s more like a thuggary system.

Some highlights in the list above.  Trina Solar $TSL looks to be the winner in Chinese solar stocks.  The solar industry is in its infancy and picking winners from losers now is a monumental task.  You must rely on the technicals to guide you, and right now they say $TSL is the winner.  I don’t love investing in foreign oil companies, there are enough in the developed world to pick from, my favorite being $BP.  Petroleo Brasileiro $PBR, better known as Petrobas, is the one emerging markets energy company I would be invested in.  Look overseas for materials plays, Gerdau $GGB is an excellent Brazilian company and will lead Brazil into the new decade.  The South African gold miners are great plays as well, I highly recommend having a generous exposure to the gold miners.  Although I believe far better technology plays are found right here in the US, there are a few out there worth investing in.  $CTRP is killing it, Chinese people are traveling all over the world and using the service.  Not only are the Chinese traveling, but they are learning English at a break neck pace.  New Oriental Education $EDU is the leader in this space.  Indians are buying cars, it’s that simple, ride that train with Tata Motors $TTM.  RINO International $RINO treats waste water in China, water treatment is going to be a huge theme the world over for the next decade.  As the Chinese become more wealthy they will demand better services from their government.  Clean drinking water and no sewage in the streets is step one.  I love the African telecom play Millicom International $MICC.  Africa has no infrastructure, so instead of building telephone lines everything will be cellular.  In my mind, this company may be the most important to the growth and development of Africa.  The Brazilian banks are excellent and avoided the mess that the United States caused in the financial sector.  Instead of wasting your money owning a dead company like Citibank $C, buy a few emerging market banks.  People are flying into little airports in Mexico on vacation, Grupo Aeroportuario $PAC owns them, enough said.  Why would you even invest in a domestic utility when there is little growth and a lot of regulation here in the US.  Take your pick from these emerging market utilities, a few have excellent dividends to boot.  I don’t love emerging market healthcare, but if you must, $TEVA is a safe play.