Wednesday, April 27, 2011

This proprietary risk indicator has turned bearish on stocks

From Pragmatic Capitalism:
Our proprietary risk metric is beginning to throw off a warning signal which comes just as the markets are about to enter their seasonally weakest six months of the year.

The risk ratio indicator is a weighted average of bullish to bearish sentiment, the volatility index, the rate of change for the S&P 500, and the new high/new low ratio of the NYSE. This weighted average is then smoothed with an eight week rolling average to eliminate a lot of the noise.

... While a lot of people look at these indicators individually, we combine weight and smooth them to provide a more global look at market psychology and sentiment. Currently, that outlook is very bullish... As a contrarian investment manager, I think this is a time to begin raising cash and hedging risk in portfolios.

The indicator is best used when...

Read full article...

Tuesday, April 26, 2011

Financial "D-Day" is coming in two months... Here's what to do

By David Galland, Casey Research:
In the last few weeks, I've become particularly "attentive" to the intentions of Fed policy makers following the scheduled June end date for QE2.
This is no small matter... An actual shift in Fed policy – as opposed to the smoke and mirrors sort – could temporarily play havoc on equities and commodities markets alike. How could it be otherwise, when under QE2 the Fed has been writing checks to the Treasury in amounts of upwards of $100 billion a month since last November?
As a point of reference, at the end of April 2007, the monetary base of the U.S. was $822 billion. At the end of April 2011, it will be $2.5 trillion, a three-fold increase. Call it what you want, "quantitative easing," "stimulus," "political payola," "madness," but monetary inflation is the correct term. And monetary inflation on this scale invariably leads to price inflation on a similar scale.
It is this "money," steadily ginned out of thin air, that provides the fuel to keep the spendthrifts in Washington spending and props up the wounded economy.
It is also this "money" that sends equities and commodities soaring as investors look for higher returns and things more tangible to hold ahead of the rising inflation.
Removing the stimulus, therefore, will almost certainly...
Read full article...
More from Casey Research:
Doug Casey: What to do with your money now
Casey Research: A major gov't policy is about to change
Doug Casey: This massive gov't lie is pushing us toward a second Great Depression
View the original article here

Monday, April 11, 2011

The only two charts that matter for the U.S. right now

From Zero Hedge:

Lately, there has been a lot of chatter by virtually everyone with some soapbox to stand on, about this and that. That's swell... if mostly irrelevant. By now, everyone should be aware that only two charts actually matter... both of which are painfully self-explanatory.

And for the purists, we'll add...

Read full article (with charts)...

More government stupidity:

Top Senator: U.S. now on the road to "financial suicide"

Porter Stansberry: The terrible reason stocks are soaring now

"Dr. Doom" Marc Faber shocks CNBC anchor with rant on poor people


View the original article here

Wednesday, April 6, 2011

One of the top tools for building wealth that practically no one uses

From Financial Mentor:
Isn't it amazing how the choices that determine the bulk of our results are so boringly simple nobody wants to hear about them?
For example, let's say you want to drive from Los Angeles to New York and you're given the choice between two cars: a basic Toyota Camry or a one-of-a-kind, custom race car using the latest, coolest, whiz-bang technology.
Logic says to choose the basic Camry every time. It is the proven, reliable path to achieving the goal. However, the sleek, beautiful race car just reeks of sex appeal and seduces us into the driver's seat for a more-better-different adventure.
Don't get me wrong. I love adventure as much as the next person – probably a lot more. But there is a time and place for everything.
The financial game is about getting results – not having an adventure.
If you want to produce reliable results then use proven technology… even if it is boring...
Read full article...
More on building wealth:
Five easy ways to become wealthier in 2011
Why most investors should ignore stocks with big dividends
Three inexpensive ways to compound your money with dividends
View the original article here

Monday, April 4, 2011

Jim Rogers: "Staggering problems" are coming to America

From an interview with The Daily Bell:

Daily Bell: What trends are you emphasizing in your public speaking these days?

Jim Rogers: I'm speaking but I am not sure people are listening. They haven't been listening to the rise of China or the problems with the U.S. dollar and more and more currency turmoil. People don't listen about how inflation and commodity prices are going to continue to skyrocket. The things I have been talking about for several years are right and they continue to be right. I talk about more and more social unrest and there is going to be more social unrest.

Look what is happening in Libya, Tunisia, and Egypt. I talk about these things, and they turn out to be right, but people do not want to accept them, so unfortunately you have opportunities from this but once everybody thinks the same way, there's no opportunities left. I still see what has been happening, will continue to happen. Eventually everybody will know how to spell commodities. Eventually everybody will know how to find China on a map or even the Pacific Ocean on a map, but in the meantime, that is still years away.

Daily Bell: What do you think of these color revolutions taking place? We think that there is considerable interference by the West and especially America. Comments?

Jim Rogers: Well, as I have said, there is going to be more social unrest and I have been saying this for several years now...

Read full article...

More from Jim Rogers:

Jim Rogers: Silver is one of the few safe refuges left

Jim Rogers: "We're at a moment of truth for the dollar"

Jim Rogers: How anyone can profit from the coming crisis


View the original article here

Saturday, April 2, 2011

THE U.S. DOLLAR IS FLIRTING WITH THE "ABYSS"

From Brian Hunts Market Notes

The idea behind this week's chart is the most important one you're probably not following right now. It's the U.S. dollar and its abyss...   Since registering a short-term peak of 81 in January, the U.S. dollar index, which measures the dollar's value against a basket of global paper currencies, has plunged 6%. While this doesn't sound like much to some folks, it's an enormous loss for a major currency in such a short time.   This decline has taken the dollar to a key "abyss" level... the low of 75.63 reached last November. On March 21, the dollar index closed below this level... only to step back from the edge and rally back near 76.   Dollar holders should keep an eye on this trading action. If the dollar fails to rally here, it's leaping into the abyss of sub-75... the low reached in 2009... And it's a strong indication the dollar is succumbing to the serious fiscal problems U.S. citizens and their elected representatives refuse to deal with.


The dollar flirts with the abyss

Unbelievable: Ben Bernanke secretly gave billions in loans to Gadhafi

From Washington's Blog:

Documents produced by the Federal Reserve in response to an order from the Supreme Court show that Bernanke loaned billions to foreign banks through its discount window. As Bloomberg - which brought the lawsuit which resulted in the document release - notes:
... "The American people are going to be outraged when they understand what has been going on," U.S. Representative Ron Paul, a Texas Republican who is chairman of the House subcommittee that oversees the Fed, said in a Bloomberg Television interview.
"What in the world are we doing thinking we can pass out tens of billions of dollars to banks that are overseas?" said Paul, who has advocated abolishing the Fed. "We have problems here at home with people not being able to pay their mortgages, and they’re losing their homes."
Indeed, billions of dollars worth of loans went to Libya...
Read full article...
More on bailouts:
A terrible decision is destroying America
END GAME: The Federal Reserve is now bailing out the world
OUTRAGE: The "for-profit arm" of the Obama administration pays NO taxes
View the original article here