Simply More Proof

Here is yet another piece of the puzzle, that clearly shows how weak the current state of the market is.

As you can see, price continues to move higher, but the participation of stocks continues to erode.

With the markets holding up as well as they have in the face of such divergences, it is very possible that we might experience a mini crash that will scare the hell out of people and get them
to all throw in the towel. From this point the real upside of the market will begin.

Sometimes a Chart Just Does Not Need Analysis

I wonder what the trend is for this stock?

AGL Test and Lesson Time

Take a look at this weekly chart of AGL and tell me if it would be prudent to purchase the stock now, or wait for it to settle back and test the lows.

The answer is in the past.

I will post the answer this week.

Also look below at the daily chart of AGL.

If you recall when we were looking at AGL as an educational tool that demonstrated a consolidation zone. The stock broke out of the zone in the opposite direction, but you can plainly see that it is a very useful tool and something you should always watch for.

Notice also, that once the stock broke below the bottom of the consolidation zone, it came back to test that level once more and failed. From there the true decline began.

The Only Inflation Gague is The Growth In The Monetary Base

If you follow this headline alone, it will put you ahead of 99% of the PH.D holding economists.

While they are busy making their complicated Econometric Models to predict inflation, we can do a very simple calculation and be done with it. On top of the simplicity is the accuracy.

So, simply take the Current Monetary Base, found in the St. Louis Fed Data and then this same data from a year ago. The percent change in the data is the inflation rate and best of all is a leading indicator.

There! Now you are armed with what amounts to a full semester of graduate classes, except this little diddy is actually useful.

Secular Highs Being Put In Place?

Monthly chart of the British Pound is starting to look very much like 99% of this strong
move is over.

Sentiment about the U.S. Dollar would confirm this thought.

Ask yourself what it is that I see on the chart that would indicate this secular move is over.

Keep The Stop Close

Corn is at the crossroads here.

The second leg down has not equaled the first leg down in price, so there is room for a bear market rally here. However, the lows were taken out and this would call for lower prices yet still.

The best plan of action is a tight trailing stop that will lock in our profits on corn should the market begin to rally.

One thing remains clear and that is the fact that the ultimate bear market low for corn has a long way to go before it gets here.

After The Correction Look To Corus

They say a picture is worth a thousand words.
In the case of Corus (cors) it will be many multitudes of a thousand.

Keep an eye on this one as it will offer a chance of a lifetime in the very near future.

If You Talk About It Long Enough You Are Bound To Be Right : )

For those of you who have rode this great bull market in oil and oil related stocks I say
great job on massive profits!

What I also say however is that all good things come to an end and with the vast majority of investors extreme bullishness on oil stocks it is starting to look like 1980-1981 all over again.
In case you are to young, take a look back at the late 70's and early 80's and you will see a very eerie resemblance to now.

Nanotech

While Nanotechnology is an excellent long term investment, the sector currently looks rather weak on an intermediate term basis.

Use any weakness to add to existing positions.

How Many Chances Do You Want

If you have yet to begin your purchase of White Mountain, then now is an excellent time.

The stock has pulled back and looks to push higher, perhaps sharply so!

Remember this is an Ultra Long Term position and the Next Berkshire Hathaway, You simply have no excuse on this one.

Simply Way Over Done

While it may prove to be just a bit early to purchase AHM, I simply cannot resist the bargain prices it has reached.

I plan on purchasing my line over time just in case all the downside has yet to terminate.

This would be considered very Aggressive

Long Term Perspective On Interest Rates

The Secular Monthly chart of the 10 year note is clearly stating that the next major move in the price of the notes will be up.

This thus translates into lower interest rates.

Unleaded Looks Very Weak

The Continued Demise of Crude Oil

I realize that we continue to get battered with all the $100 oil opinions, but I continue to stick
with my assessment that the petro complex is in the process of a long term top and the next major move will be DOWN!!

Take a look at the C.O.T. Data:

Big Money is Selling, Selling, Selling
Fund Money are Huge Buyers
Small Traders are Huge Buyers

This all adds up to lower crude oil prices.

TNH - Thank You!

It was an incredible ride, much higher than I thought it could go in such a short time.

The party however is temporarily over and now I look for a pull back into the low 70's before
I get back in.

The great part is that once this pullback has completed, the rally that will ensue will be even more powerful then what just occurred, so keep a close eye on this one.

Get Ready For the Unexpected!! - American Cars Back In Vogue

The Auto Sector is the next to bloom.

The purchases by private equity of Chrysler and Tower Automotive could not have been better timed. They were purchased at fire sale prices and if I could have gotten in on any of them I would have!!

Ford offers some great potential!!

Pfizer - MRK all over again!!

While Pfizer may appear to most to be in a world of trouble, it is not how it should be viewed.

PFE offers exceptional value at these prices and as I have said before, it is in much the same
position that MRK was before it promptly doubled!!

Not to mention the stock offers a 41/2 % dividend yield.

If PFE decides to dip back into the $22-$23 area, please feel free to buy everything you can get your hands on. Your Children will thank you.

MRK - A Lesson To Apply To PFE NOW!!

I have spoken about MRK in the past and especially the bargain prices we were given in the upper 20's.

The stock has more to go on the upside, perhaps the $70-$80 range, however it needs a pullback here of 10% or so so don't be alarmed when it comes.

IndyMac - Accept the GIFT

If you have not been purchasing IndyMac over the last 4 months, then you have been given yet another gift!!

You will look back 18 months from now and be very sorry you did not pick up this powerhouse
company that has NO SUB-PRIME Mortgages!!!

Did I Happen To Mention That IMB Has 54% of Its Stock Sold Short!!!
What will happen when all these short positions have to buy back in??

Can you say EXPLOSION!!!

Equities Continue to Deteriorate

Just a very quick note on the Equity Markets as a Whole.

Friday was yet another day of distribution by the smart money, so please do not get fooled by
the price action of some indexes.

It is important to note however that the bulk of the distribution by the big money has been
in a hedge type fashion. Which really helps to confirm our outlook for a sharp correction of 8%-15% followed by a hell of a rally.

I am not a bear by any means. I just recognize a market that is very tired and needs some
fear put into the players before it can continue the secular bull market!!