10/31/09

Just in case you had any doubt ....

Deflation is alive and well. Producer prices declined 0.6% last month, down 4.8% over the past 12 months.

What is most impressive is the prolonged decline in producer prices since last December (click on the chart to enlarge it).

In other words, producers have to cut prices to stay in business. How long will it last? Certainly this is bad news for profits.

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

Disclaimer. No material here constitutes "investment advice" nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

10/30/09

Friday --- Interesting day

A very interesting day indeed.

Prices of risk assets declined sharply. Commodities, stocks, low-grade bonds -- they all sagged.

Safety was in great demand -- Treasury bonds and bonds backed by the government and the Fed largess.

The shorts also enjoyed a great day. Have a nice week-end.

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

Disclaimer. No material here constitutes "investment advice" nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

10/29/09

National debt by country

National debt (click on the link to review the data) represents the transfer of wealth from us to the bond holders.

We ask and the politicians give us what we want. They sell bonds to give us the money. We like it. But it is like being on drugs.

Why? Because we have to pay the interest on the bonds the government is selling.

And gradually our purchasing power decreases. But we do not realize what is happening.

One way to find out what is happening is to follow closely the ultimate barometer of our economic health --- the trend of the dollar. If it rises, we are doing OK. If the dollar declines, we are in trouble.

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

Disclaimer. No material here constitutes "investment advice" nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Economic outlook

According to USA TODAY, the economy will strength until the end of the year. It will slowdown quite sharply in 2010 (click on the graph to enlarge it).

Some analysts are already saying the fourth quarter will be much slower than the 3.5% of the third quarter.

If these forecasts are true should we look for a top in commodities and bond yields?

Time will tell. Stay tuned.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

Disclaimer. No material here constitutes "investment advice" nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

10/28/09

What would I like to see?

When I follow my indicators I am always trying to understand what they are trying to tell me. Should I buy? Should I sell?

Another way to approach the decision is to ask myself the question: What would I like to see? Do I see the conditions to buy or to sell? If the high probability pattern is not there, then why not wait?

Take for instance the indicator shown in the chart (click on the chart to enlarge it). The high probability pattern telling you to start thinking about buying is when the oscillator falls to LEVEL B. So, why not wait. I tell myself to take a deep breath and wait, even if other indicators are saying the market is oversold.

Patience is an important element in winning in the investment game.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

Disclaimer. No material here constitutes "investment advice" nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

10/25/09

The markets always win

I am intrigued by this chart (click on the chart to enlarge it). The market cannot be on a sound footing without a strong bank index.

This index has been declining since August and is in the process of going below an important trendline. Is this a bad omen for the market? Time will tell, of course.

Something else is bothering me. The Fed is keeping interest rates low to help the banking system. But they are too low, and this action weakens the dollar, sending oil prices higher. High oil prices will lower our purchasing power, and it will weaken the economy. Profits cannot grow much under this scenario. What will the Fed do then?

My point. The markets always win.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

Disclaimer. No material here constitutes "investment advice" nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

10/23/09

Is the market overbought?

This chart shows two graphs -- the S&P 500 and the percent of stocks above their 50 day moving average (click on the chart to enlarge it).

This percentage has reached 90% twice in this rally, a level not seen in the past 3 years. Yes, the market is having a remarkable move. Should we say -- historic?

Is the market overbought? I let you decide.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

Disclaimer. No material here constitutes "investment advice" nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

10/22/09

Observations

It was the first time SNS expressed a cautious view on what is happening. People are confused, he said. It was odd to hear him say this. He is an optimist. But not this time.

This administration has too many projects on the high priority list. They are all important, I know. The country, however, is asking why we are not focusing on strengthening small business and the economy. Afterward concentrate on the social programs, nationalizations, and new wars the administration wants to pursue.

I was intrigued by a report by Wegelin & Co., founded in 1741 in Switzerland. In its letter to clients, the bank reviews US policies.

• The US is over-reaching overseas with military and government/regulatory personnel.
• The enormous debt, the anti-entrepreneurial policy, and the disproportionate efforts to intensify the regulation of small businesses are discouraging investment.
• The Obama administration is making exactly the same mistake as Franklin D. Roosevelt by believing in the possibility of an upturn caused by appropriate state intervention. Roosevelt deprived businesses of any hope of being able to make money again through their own efforts. The war saved FDR’s faulty policies.
• The financial crisis has given momentum to anti-capitalist and thus anti-market forces in the USA (and elsewhere).
• We live in a time of shifting power and influence in the world. The US is losing its global influence because of the loss of economic vitality.

For these reasons, the bank took “a general farewell of America” and announced it will stop doing business in the United States. It is also advising its clients to get out of all US securities. It ends the letter with a sad and emotional: “But for now, it’s time to say goodbye.”

SNS is right. We are confused and our travail has been noticed around the world. The dollar is slumping because too many investors are thinking like the Wegelin bank. We need to listen to our friends.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

Disclaimer. No material here constitutes "investment advice" nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

10/21/09

The problems created by a weak dollar

The price of crude oil doubled since February (click on the graph to enlarge it).

The bad news is that the price of gasoline is up in US dollars. Oil in other currencies, however, is not rising as rapidly. This is the problem in having a weak currency. It emphasizes the loss of purchasing power between weak and strong currency countries.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

Disclaimer. No material here constitutes "investment advice" nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Perplexed

The market has a superb momentum. No doubt about it.

It looks like all sectors are participating, especially those benefiting from a steep yield curve.

What is strange, however, is that the bank index has peaked in early August and has declined since then (click on the chart to enlarge it). How can we have a strong market without the participation of this crucial sector?

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

Disclaimer. No material here constitutes "investment advice" nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

10/20/09

We have the smartest people and the best universities

News. Building economic models usually involves stripping the world down to its most essential features. But simple theories often struggle to explain the way things really work. Elinor Ostrom of Indiana University and Oliver Williamson of the University of California at Berkeley, the winners of this year’s Nobel prize for economics, have both been honoured for recognising this complexity. Their research provides insights into economic institutions that play crucial roles in the real world, but to which economists have not paid enough attention.

Yet, since 1920 we have managed to move from crisis to crisis reflected by multi-year periods of poor performance in the markets and the economy.

What are we missing?

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

Disclaimer. No material here constitutes "investment advice" nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

10/17/09

Government deficits, spending, the dollar, and inflation

Deficits. They represent the transfer of wealth from us to the bondholders. The outcome is that we get poorer and they get richer.

Spending and inflation. The main driver of inflation is government spending (click on the chart to enlarge it). By definition government spending is unproductive and strains our resources. It uses resources that could have been used more efficiently by the private sector.

The dollar. The dollar reflects the competitive differential between us and the rest of the world. If our country becomes unattractive because we become poorer, government regulations strangle the private initiative, the educational system is unsatisfactory, then investors sell dollars to buy the currencies needed to invest in friendlier countries. You earn a strong dollar. You do not "talk it up", as they say on the business channels.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

Disclaimer. No material here constitutes "investment advice" nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

10/15/09

One way to hedge the dollar

The dollar is sinking because of the loss of or competitiveness.

This chart seems to suggest an inverse relationship between gold and the dollar(click on the chart to enlarge it).

Please note that the two prices are "coincident". In other words, you cannot use one to forecast the other. You still have to make a prediction on the direction of the dollar or gold.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

Disclaimer. No material here constitutes "investment advice" nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

10/14/09

You cannot ignore the business cycle

The business cycle works. You cannot ignore the impact of the business cycle on asset classes.

As I discuss in detail in my The Peter Dag Portfolio, insurance, financial, private equity, and retail stocks are the strong performers when the economy is weak and the Fed is aggressively easing. This is exactly what is happening now.

In the last 61 days, energy and material stocks have underperformed (click on the chart to enlarge it). This is not a coincidence. These sectors will outperform all other sectors when the economy is red hot and business grows above potential.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

Observations

This administration has too many projects on the high priority list. They are all important, I know. The country, however, is asking why we are not focusing on strengthening small business and the economy. Afterward concentrate on the social programs, nationalizations, and new wars the administration wants to pursue.

I was intrigued by a report by Wegelin & Co., founded in 1741 in Switzerland. In its letter to clients, the bank reviews US policies.

• The US is over-reaching overseas with military and government/regulatory personnel.
• The enormous debt, the anti-entrepreneurial policy, and the disproportionate efforts to intensify the regulation of small businesses are discouraging investment.
• The Obama administration is making exactly the same mistake as Franklin D. Roosevelt by believing in the possibility of an upturn caused by appropriate state intervention. Roosevelt deprived businesses of any hope of being able to make money again through their own efforts. The war saved FDR’s faulty policies.
• The financial crisis has given momentum to anti-capitalist and thus anti-market forces in the USA (and elsewhere).
• We live in a time of shifting power and influence in the world. The US is losing its global influence because of the loss of economic vitality.

For these reasons, the bank took “a general farewell of America” and announced it will stop doing business in the United States. It is also advising its clients to get out of all US securities. It ends the letter with a sad and emotional: “But for now, it’s time to say goodbye.”

We are confused and our travail has been noticed around the world. The dollar is slumping because too many investors are thinking like the Wegelin bank. We need to listen to our friends.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

10/12/09

An interesting relationship

This is an interesting chart (click on the chart to enlarge it).

The chart shows the graphs of the S&P 500 and the price of corporate bonds. They moved together from 2008.

Bond prices, however, have corrected sharply in the past several days. Is this a warning signal for stocks?

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

This is one of the reasons

News. Oct. 12 (Bloomberg) -- Central banks flush with record reserves are increasingly snubbing dollars in favor of euros and yen, further pressuring the greenback after its biggest two- quarter rout in almost two decades.

My view. The other reason, which is probably as important, is that investors are finding the USA unfriendly to investments.

My point is, and will always be, that a weak dollar is bad news for our country.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

10/9/09

Have a nice week-end ....


...and enjoy this great and exciting music.

One more thought....do not fight the trend.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

10/7/09

Be careful

I just finished to listen to a famous guru saying commodities are strong and will be strong.

Be careful. Commodities are strong when the economy strengthens. Commodities are weak or go nowhere when the economy is weak.

Right now commodities have been going nowhere since June because the economy is not as strong as most observers believe (click on the graph to enlarge it). Can gold -- all by itself -- be the exception?

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

10/6/09

Oh well, I hope to be excused if ....

Timer Digest has followed my forecasts since 1987. Quite often I was ranked among the best timers.

In the last issue (10/05//09) I am ranked in the Top 10 for the most recent 52 weeks and most recent 6 months and 3 months.

Thank you Timer Digest!

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked No. 1 market timer by Timer Digest

Bullish news

News. Oct. 6 (Bloomberg) -- President Barack Obama is considering a mix of spending programs and tax cuts to respond to widening job losses that would amount to an additional economic stimulus without carrying that label.

Is the soaring market reacting to the new plans of the administration?

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked No. 1 market timer by Timer Digest

10/4/09

The best and the worst

The top 10 states with the most "business-friendly" tax system, from 1st to 10th, are South Dakota, Wyoming, Alaska, Nevada, Florida, Montana, New Hampshire, Delaware, Washington and Utah.

The bottom 10 states, from 41st to 50th, are Vermont, Wisconsin, Minnesota, Rhode Island, Maryland, Iowa, Ohio, California, New York and New Jersey (Source:www.taxfoundation.org).

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked No. 1 market timer by Timer Digest

Are bond and stock prices correlated?

There is much talk right now about the relationship between the stock market and bond prices.

Why? Because 10-year Treasury bonds (ETF: TLT) have soared since July (click on the chart to enlarge it).

This is how I read the two graphs. TLT moved higher beginning in June 2007. The market started heading lower in October 2007.

TLT peaked in December 2008. The market bottomed in March 2009.

TLT moved decidedly higher in July 2009. Is the market going to peak?

It looks like the two markets are not coincident. TLT seems to lead the market. If it does -- and TLT remains strong -- the S&P 500 should be at a top. Time will tell if this relationship remains valid.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked No. 1 market timer by Timer Digest

Who is going to be right?

Steve Leuthold, the 71 year old money manager who is not afraid of going short, is very bullish right now.

Leuthold expects the S&P 500 to end the year at 1200 and even higher at 1350 next year. In keeping with that bullish view, he has 72 percent of his fund invested in equities.

Meanwhile, Doug Kass and David Rosenberg as well as Bob Janjuah of RBS remain decidedly bearish and unmoved.

Other luminaries. Pimco is cautious. Bearish? Byron Wien is unquestionably bullish.

My view? Follow the trend.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked No. 1 market timer by Timer Digest

10/3/09

Technical considerations

The Dow is very close to an important support level (click on the chart to enlarge it).

Unfortunately, the 25-day moving average, which has withstood the test many times in the past, has been broken on the downside.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked No. 1 market timer by Timer Digest

Some ideas

Do you have that sinking feeling about your investments?
Do you have a plan?
Do you agree that in times like the current one you have to be focused and not diversified?
Do you recognize that diversification leads to disaster when markets collapse?
Do you know the relationship between asset classes and business cycle/growth?
Do you know the meaning of hedging? Do you know how it works?

These are tough questions. I know. No one has a clear answer and there is disagreement on what is the correct interpretation. Yet, you have to try to find one. The answer has to be tested with history. You cannot hide. You have to have a strategy.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked No. 1 market timer by Timer Digest

Interest rates: the fever chart of any economy

Global short-term interest rates are sinking close to 0%. The USA has the lowest short-term interest rates of the industrialized countries at 0.28% (Libor).

Government bond yields are also collapsing. US Treasury yields (10 years) are 3.22%. Will they fall to the levels existing in Japan (1.26%)?

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked No. 1 market timer by Timer Digest

10/2/09

Seasonality effect will be improving ... soon

"Sell in May and Go Away." That seasonal weakness will go away at the end of October. This is good news because all but 0.4 percentage point of the market's annualized return since 1896 has been produced in the winter months. In other words, almost all the returns of the Dow took place from November to May.

Although October is the most volatile month for the stock market of the entire calendar, its average gain has been 0.9% since 1950. The month known for the 1929 crash, Black Monday in 1987 and other mid-autumn market crises is actually very tame, most of the time.

This year October started with a negative bias. The good news is that at the end of October we can look forward to the end of the year rally.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked No. 1 market timer by Timer Digest

10/1/09

The change in momentum continues

The transportation average broke on the downside a trendline spanning 7 months (click on the graph to enlarge it).

This could be an important change in trend given the length of the trendline. A sign of developing weakness in the economy?

The decline in long-term bond yields, in the Baltic Shipping Index, in commodities, the weakness in employment, and renewed weakness in consumer confidence suggest the economy and the outlook for profits is uncertain.

Investors should factor these trends in their investment strategy.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked No. 1 market timer by Timer Digest

Momentum

Momentum has been waning since the mid May.

The percent of stocks above the 50-day moving average was above 90% in May. This number declined to 55% at the end of July. It rebounded and it seems to have peaked in mid September at around 70%.

It looks like the market has been losing momentum in the past 3 months. Is momentum setting up the stage for a rough October?

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked No. 1 market timer by Timer Digest